By on September 12, 2013

gm_canada_250op

The national Canadian and provincial Ontario governments have agreed to sell 30 million shares in General Motors that they received in exchange for their contributions to the 2009 bailout of the automaker. According to Bloombergthe shares are worth about $1.1 US billion, and were purchased by the Bank of America and the Royal Bank of Canada as a block.

 

 

The transaction will be completed early next week. The sale reduces the Canadian governments’ stake in GM by 21%, down to 110 million shares. Canada and Ontario had been, since the bailout, the third largest stockholder in General Motors, behind the UAW and the U.S. Treasury, and after the sale will own about 8% of the company’s shares.

“As we said from the start, our investment in GM was always meant to be temporary as we worked to maximize the return to Canadian taxpayers,” Finance Minister Jim Flaherty said in a statement. “The government of Canada is committed to exiting from ownership of GM as quickly as feasible, while maximizing the return for Canadian taxpayers, as we demonstrated today.”

The banks purchased the shares at a discount from Tuesday’s closing price, $37 a share, up 28% from the start of 2013.

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31 Comments on “Canada, Ontario Sell Off $1.1 billion in GM Shares, Reduce Stake By 20%...”


  • avatar
    HerrKaLeun

    so how much did Canada “contribute” for their orginal 140 mio shares? I hope not more than $5.5 billion…

    • 0 avatar
      AoLetsGo

      Based on a quick search it looks like Canada and Ontario contributed $10.8-billion to the near $60-billion bailout of GM. Two-thirds of the Canadian contribution came from Ottawa with the remainder coming from the Ontario government.

  • avatar
    mikey

    A little background here. GM Canada was a fully owned subsidiary of the “old” GM. I’ve heard romours, to the effect ,that some of the US taxpayers,were not all that enthused with the whole bail out thing. Bailing out a foreign country’s auto industry,didn’t sit so well either.

    So where does that leave Canada and Ontario? Fairly simple answer. If you want to have a seat at the table, and you need GM to stay in Canada. Better throw some money in the pot. Lots of money!

    Love or hate it, we Canadians have created a very generous,and expensive social safety net. Like many “social” programs their based on a giant “Ponzi” scheme. We all know the consequences of a “pyramid” turned upside down.

    Way back in 1990 the government,in their infinite wisdom, gave GM a pass on their pension contributions. After all GM was “too big to fail”

    If we had simply told GM, and Chrysler, take you ball,and bat ang go home. The government run pension guarantee fund would have been broke in about 6 months. Estimates run at 100,000 plus on welfare. The ripple effect would have been devastating.

    Our “social safety net” would have the “mother of all holes” in it and nobody there to fix it.

  • avatar

    Ahh mikey, I don’t always aggree with you but you know the facts on your Pension Money more than I do, anyway no wonder the Ontario Government is “Broke” too, I expect both Governments like the Money that GM Canada brings in in the way of Taxes etc etc., after all GM Canada has been here a very long time too.

  • avatar
    Lou_BC

    There were thinly veiled threats made by both GMC and Chrysler that if Canada didn’t contribute to a bailout package that they would pull out of Canada. Since most of the auto industry is in vote rich Ontario which often determines whether or not a Liberal or Conservative government gets into power in Ottawa, cowardly politicians chose to pay to play. The bailout was a percentage of what the USA paid based on the relative size of the Canadian auto industry. We got screwed just like the USA tax payer got screwed.
    Would there actually been 100,000 plus new people on social assistance/welfare? That is debateable.
    We pay more for vehicles partially because NAFTA protects the USA auto industry in Canada and even though tariffs on non-NAFTA zone vehicles were deemed illegal by the world courts, the USA auto industry and vote hungry politicians lobbied to have those tariffs kept in place.

    “Too big to fail” means that corporate executives don’t go to jail when they rob 100′s of billions of dollars from the populace.
    I would end up in court or jail if I’m negligent in my job, CEO’s get golden handshakes and bailouts for their negligence.

    @Mikey – the money borrowed to bailout the USA auto industry would of filled all of those holes. you must be from Ontario.

    • 0 avatar
      DenverMike

      The only OEMs keeping US tariffs alive are offshore (based). US Big 3 OEMs have everything to gain from free world trade. While VW, Toyota, Nissan, Honda, Mazda, Subaru and Mitsu have everything to lose from free world trade. They’re already, in every meaningful markets and the last thing they want is to compete with Big 3 OEMs all over the world. And competing with all the Tatas of the world here in the US. So who do you really think is doing all the lobbying in DC? Use your head…

      • 0 avatar
        doctor olds

        US carmakers have global share only exceeded by Japan. They build and sell everywhere. They would love to have the ability to freely sell into any market, as we allow in America. Protectionism is not in their interest. The UAW is another story.

    • 0 avatar
      danio3834

      CEO’s? The ones for the two companies you mentioned lost their jobs. It’s the politicians who really made off with your money.

  • avatar
    mikey

    @Lou_BC….Yes,I would be from Ontario. That would be the same Ontario that carried the rest of the country for so many years. So I guess your from B.C.

  • avatar
    Lou_BC

    @mikey – and is Ontario carrying everyone now? Politicians are doing a wonderful job don’t you think?

    @DeadMan – you sure love to downplay tariffs. Why? some say you are on a UAW payroll. Your spin doctoring is on par with any front line lobbyist. Were does a tow truck driver learn to do that sort of thing?
    Night school has really stepped up their offerings.

    • 0 avatar
      DenverMike

      I’m not down playing US tariffs except they’re a token amount. You’re overstating their overall impact. And which offshore OEMs quietly benefit from them (domestically) the most while you and your partner BAFO squawk about US Big 3 promoting “protectionism”.

      Remember US, Big 3 OEMs have the most to lose from worldwide tariffs and regulations and they least to gain from so called protectionism at home.

      I only became interested the topic when BAFO and RR showed up with outlandish claims with a stink of complete BS. I have nothing to hide, but we still don’t know what you do for a living…

      But it’s always those residing outside the US that have this unfounded and mistaken belief that US Big 3 OEMs couldn’t exist without protectionism.

  • avatar
    Lou_BC

    @DenverMike – now you are playing the nationality card, that is a weak move even for you.

  • avatar
    Lou_BC

    @DenverMike – your response is typical. One often does not see certain aspects of one’s own culture because that is what you have grown up with. Law, rules, regulations, shared beliefs, cultural norms etc. are mostly invisible to a person because it is always there. It is like the air that we breath, we take it for granted.
    For those same reasons, when others from other cultures that different views and experiences comment upon what another takes for granted, that is seen as an attack or it is so shocking to one’s own value system that one reels in horror and says “That isn’t true, it can’t be true.”

    Like it or not, believe it or not; barriers whether they be tariffs or technical i.e. safety rules, emissions, mpg rules, they have shaped the USA auto industry and the USA.

  • avatar
    Lou_BC

    @DenverMike – your view on protectionism and the fact that you state that you got interested in it because myself, Big Al and Robert Ryan all talk about protectionism is typical. Robert and Al are Australian and myself, a Canadian are as you imply “outsiders”.
    We are able to see these inequalities more easily because we are NOT Americans.
    Let me explain,
    Most aspects of one’s own culture are invisible to that person. That is simply because we do not notice cultural and societal norms, rules, laws, general beliefs etc. that shape who we are and the group or nation that we are in.
    It tends to make us look at other cultures, races, beliefs etc. through those collective beliefs. One’s eyes see the same thing as most of the other eyes in that group because of the common upbringing.
    When an outsider or “expert” challenges those beliefs or what is unseen to an “insider” a predictable behavioral pattern emerges. That is one of defensiveness where one feels that they must defend their side regardless of whether or not they are wrong or right. Another response is disbelief. OMG, it isn’t true, it can’t be true.

    In closing whether or not you chose to accept the fact that it IS true, barriers: technical i.e. emissions, safety rules, mpg rules or tariffs have shaped the USA auto industry and the USA market place.
    An outsider can see it because we didn’t grow up in that reality.

    Accepting something that challenges one’s beliefs is never easy or comfortable but that is how growth occurs.

    • 0 avatar
      Pch101

      The EU has a vehicle import tariff of 10%.

      Canada has a vehicle import tariff of 6.1%.

      Australia currently has a vehicle import tariff of 5%, which once exceeded 50%.

      Australia also adds to this a luxury tax that punishes foreign producers. Based upon the tax rate, the largest seller of luxury cars in Australia is Toyota.

      The US has an import tariff of 2.5%. Notice how that figure is lower than those of the others listed above.

      The chicken tax doesn’t matter because nobody pays it. It can be avoided, and in any case, Americans have long tended to prefer larger vehicles that has resulted in vehicles being produced especially tailored to American tastes. And that means building them locally, close to where the customers are.

      If anything, it is foreign markets that have been most substantially influenced by high tax rates that discourage the production of larger vehicles and with larger engines, partcularly above 2.0 liters. With low fuel taxes and no displacement taxes, Americans have grown accustomed to larger vehicles in ways that Europeans could never afford.

      And unlike Australians, Americans can buy a minivan from Toyota without being hit with a 33% luxury tax. Perhaps Al can devote some of energies to reducing that trade barrier for his own people.

      • 0 avatar
        doctor olds

        @PCH101- Great summary! Thanks for data, rather than emotion.

      • 0 avatar
        Big Al from Oz

        @Pch101
        The US has what is termed technical barriers. This doesn’t include the chicken tax of 25% and the import tariff of 2.5%

        These technical barriers equate to imposing a 26% tax on imported vehicles. That’s a figure not be be laughed at.

        The US has the most protected motor vehicle market in the free world.

        I suppose in your case on the US goes like this, “don’t do what we do, but do as we say”. This adage worked when the US represented a much larger portion of global trade and GDP.

        Now, the US is shrinking as that percentage. The situation in the global motor vehicle industry is simple. Adopt what the majority is doing. That’s how the US operates, isn’t it? The majority seems like a democratic idea.

        • 0 avatar
          Pch101

          “These technical barriers equate to imposing a 26% tax on imported vehicles. That’s a figure not be be laughed at.”

          I will laugh at it. That figure came from a trade association that is lobbying for its interests. The number isn’t supported by anything except hot air and wishful thinking.

          In any case, you continually misrepresent their claims. The ACEA was claiming that differences in standards raise prices for car buyers in both the US and Europe, not just the US.

          If you compare US car prices to prices of comparable vehicles elsewhere, you’ll find that the US prices are lower. Americans even pay less for German cars than Germans do.

          It’s funny that a Sprinter Van that is that is built in Germany, then partially disassembled and then reassembled in the US to avoid the chicken tax, is substantially cheaper than the same vehicle sold in Germany. (And that doesn’t include the high VAT that Germans have to pay.) Try explaining that with your laughable 26% figure.

      • 0 avatar
        Big Al from Oz

        @PCH101- Great summary!………………except……
        The data you presented is not incorrect, just incomplete. Pch101. it appears you do this often to support your arguments.

        This isn’t lying is it? What would you call it? Being a giver of untruths? You seem to do this to support your paradigms, sort of like a religious zealot or an blinded car fan.

        Lets start from the top. You have failed to give an accurate depiction of how the US uses a system of technical barrier and tariffs to protect it’s auto industry. Actually one of the harshest amongst it’s OECD peers.

        You forgot to mention the Chicken Tax, if you are not aware it’s a 25% tax levied primarily to protect the Big 3 pickup manufacturers. Lynden Johnson (Dem) was approached by the then UAW boss to implement the tax (the truth).

        To illustrate how effective this tax is, explain to me why pickups are the most profitable part of the Big 3 operations. Would that indicate to you that maybe the consumer is being ripped off. And somehow this will create inefficiencies.

        Hey Pch101, what about a thing called technical barriers? You say what are those. Just google it. Techical trade barriers on vehicles to be imported into the US amount to an equivalent tax of 26%. Not chicken feed is it :-)

        Pch101, for the US manufacturers to gain they must export. I think it’s about time for the US vehicle manufacturers to restructure and become part of the world,ie, the US adopt UNECE regs. The US is losing it’s influence to dictate and it will lose considerable income by adopting an isolationist stance.

        UNECE regs actually are designed to facilitate trade, yes, contrary to your theory that something or someone is out to get the US. Before you again denounce these regs and state how superior your US regs are, why is it the US has one of the highest fatality rates amongst advanced economies, nearly double most others? You drive more miles? What about the Canadians who have a much lower fatality rate, or even in Australia, they do drive as much as your average US person.

        I do understand you have an issue regarding your American Exceptionalism attitude. I do think the US is the greatest nation historically, but it might not be the best at everything.

        Remember, I’m an American too. So you can target with a tit for tat comment on Australia, I will probably support your view.

        Open your mind and remember there are 6.7 billion people outside of the US. That’s alot of great people and ideas all vying to have what the US/Canada/Australia has.

  • avatar
    Lou_BC

    Sorry for the double post, I thought that the first hadn’t made it for some reason.

    • 0 avatar
      DenverMike

      @Lou_BC – Now you’re off on a philosophical tangent.

      It’s a common meme around the world… “US pickup trucks are protected by exclusionary ‘trade barriers’ and only sell in tremendous numbers because of them…” It’s not founded on a anything real and you have to go out of your way to ignore simple facts and well known history. Bertel was another one known for this fallacy. Now you join the club…

  • avatar
    mikey

    @DenverMike…I too am Canadian. I really have no idea where this guy is coming from.

    For all intents, and purposes, we are the fifty first state. Be it culture, economoics, language,or geography, we are very close to being American.

    Its undisputable fact of life. We in Canada depend on the might of the U.S Military to defend us. On the other hand we have some very nice natural resources. Once again, we need a little help from the U.S with both money and technology,to harvest our resources.

    Unfortunatly due to the perception of our different cultures,we have created the “Loony left” Worst case sceneario the Loony left account for less than 20 percent of the electorate.

    For the most part, Canadians ignore them, like you would a yappy dog.

    Denver Mike….Lou does not speak for this Canadian.

    Have a nice day EH!
    .

  • avatar
    Lou_BC

    @Mikey – you have gone on record as being a supporter of trade unions. That group tends to deny the effects of trade barriers.
    Loony left??? – that is also a domain staked out by the socialists and unionists. Those very groups support the NDP.

    I’m centre right.

    I was explaining the psychological and sociological rationale for DenverMike’s dislike of “non-Americans” pointing out how things are in the USA.

    Denver and I have been engaged in a very long debate on another site over tariffs. He just dances and prances and uses obfuscation to conceal the fact that he actually has no ground to stand upon.

    Since you talk about the Canadian auto industry, why don’t you research protectionism in Canada and how it benefits USA companies to the detriment of the Canadian populace?

    You obviously have no idea as to what defines culture if you think that Canada is just the 51st state.

    The only part that I agree with you on is your last line “Lou does not speak for this Canadian.”.
    I would hope not, only a brain injury would cause me to become that illogical and unpatriotic towards my own country.

    • 0 avatar
      Big Al from Oz

      @Lou_BC
      It odd that DlM thinks less of individuals he considers outsiders, when in fact he’s from Espange himself. Spain.

      He has claimed to been over to Spain 36 times in his life and he thinks there is a full size pickup market there.

      I have been to Spain and many towns and villages can’t support such vehicles. Is their another Spain. A DenverMike dreamtime Spain? How will they afford such vehicles as well considering the GDP per capita in Spain is half per person as Australia?

      DlM has shown on many occassions he is untrustworthy with his comments as he tends to lie. I do realise you’ll find this hard to believe:)

  • avatar
    Big Al from Oz

    @Pch101
    You can try and gloss over the truth. You seem quite intelligent at times, that’s why it is sometimes hard to comprehend the ridiculous comments you drop every now and then.

    The US has one of the most protected vehicle market in the free world.

    Those figures you gave seems to miss out on some significant barriers the US uses regarding global trade.

    Oh, and you missed a significant 25% tax, you guessed it, it’s called the chicken tax. Linden Johnson brought this into effect when the chicken tax bill was put through congress at the behest of the then UAW boss.

    What about a thing called technical barriers? They are equivalent to a 26% import tax. Hey Pch101, what are they? Why doesn’t the rest of the world do as we do. They use to sunshine, but now the US represents less than 20% of global vehicle trade. Everyone else is inferior and using inferior systems and regualtions, isn’t that right? You seems to speak about the superior US design regs that has the US with one of the highest fatality rates in the OECD.

    Who is causing these accidents? Not us, we have the best.

    Maybe the US should adopt what everyone else is doing, instead of becoming insular and isolated. Yup, you guessed it, UNECE regs. The most common system for vehicle regulations in the world. It actually supports and facilitates global trade. Great instrument, if you want to export that is.

    Hey Pch101, don’t let fact get in the way of your paradigms.

    Your problem is you have what is termed an Americian Exceptionalism issue. But I can live with that. I’ll have to continually correct you with the many errors you make:)

    The US is the greatest country, maybe not the best at everything. I’m from there and so is my family. But to some of the brainwashed guys, leave the US and look around the world, it’s an amazing place.

  • avatar
    Big Al from Oz

    @PCH101- Great summary!………………except……
    The data you presented is not incorrect, just incomplete. Pch101. it appears you do this often to support your arguments.

    This isn’t lying is it? What would you call it? Being a giver of untruths? You seem to do this to support your paradigms, sort of like a religious zealot or an blinded car fan.

    Lets start from the top. You have failed to give an accurate depiction of how the US uses a system of technical barrier and tariffs to protect it’s auto industry. Actually one of the harshest amongst it’s OECD peers.

    You forgot to mention the Chicken Tax, if you are not aware it’s a 25% tax levied primarily to protect the Big 3 pickup manufacturers. Lynden Johnson (Dem) was approached by the then UAW boss to implement the tax (the truth).

    To illustrate how effective this tax is, explain to me why pickups are the most profitable part of the Big 3 operations. Would that indicate to you that maybe the consumer is being ripped off. And somehow this will create inefficiencies.

    Hey Pch101, what about a thing called technical barriers? You say what are those. Just google it. Techical trade barriers on vehicles to be imported into the US amount to an equivalent tax of 26%. Not chicken feed is it :-)

    Pch101, for the US manufacturers to gain they must export. I think it’s about time for the US vehicle manufacturers to restructure and become part of the world,ie, the US adopt UNECE regs. The US is losing it’s influence to dictate and it will lose considerable income by adopting an isolationist stance.

    UNECE regs actually are designed to facilitate trade, yes, contrary to your theory that something or someone is out to get the US. Before you again denounce these regs and state how superior your US regs are, why is it the US has one of the highest fatality rates amongst advanced economies, nearly double most others? You drive more miles? What about the Canadians who have a much lower fatality rate, or even in Australia, they do drive as much as your average US person.

    I do understand you have an issue regarding your American Exceptionalism attitude. I do think the US is the greatest nation historically, but it might not be the best at everything.

    Remember, I’m an American too. So you can target with a tit for tat comment on Australia, I will probably support your view.

    Open your mind and remember there are 6.7 billion people outside of the US. That’s alot of great people and ideas all vying to have what the US/Canada/Australia has.

    • 0 avatar
      Lou_BC

      @Big Al – at least on this site, everyone seems more polite. Must be the fact that they are owned by Canadians. LOL

      • 0 avatar
        Big Al from Oz

        @Lou_BC
        If you haven’t already worked it out, its easy to pick the ‘sponsored’ bloggers.

        They will pathetically, distort, lie, deflect, etc until the cows come home.

        Here’s a list.
        DocOlds—A self professed engineer. Look at how he quizzed Hummer over the cylinder deactivation issue, retired from GM? Pig’s A$$.

        Also, he will defend any move or decision by GM. He doesn’t exude the fanboism I would expect from a GM diehard. Paid?

        DenverMike/mikey—-Works in a cell similar to a call centre for the UAW. Paid, don’t know. Incredible, idea’s, philosophies, etc. Great deflectors of arguments when it doesn’t favour the UAW. Will then state they have proven you wrong, but with no evidence, only their wisdom is good enough. True spinners and devout socialists.

        Pch101- My favourite.
        Has tickets on himself, like DocOlds a self professed motor industry SME.

        Emotional, which leads to errors. Nationalistic, leads to errors and distorted judgements. These flaws leads to poor assessments of and situational awareness. Wouldn’t employ him.

        Could do much better is he left the Ozarks, from his attitude he thinks Little Rock is a massive conurbanation in Arkansas.

        UAW all the way. ‘Can’t see the forest through the trees’ type.

        It’s a great pity as he does have potential to lead. Maybe he should join some cult. That’s how he acts. He’s also intelligent.

        • 0 avatar
          DenverMike

          What’s with the personal attacks, BAF0? We done talking about cars? You spout all this nonsense and offer zero proof. The ball’s in your court, silly… IF I claim a conspiracy, I follow it with proof. You’ve got opinions and you’re welcome to them, but don’t confuse them with facts.

  • avatar
    doctor olds

    @BAFO- I write the truth because I love the business. I am loyal to GM, as you point out the obvious. They gave me a very good life and a great retirement. If you would get you head out of la la land, you might learn something from these posts. Your notions about people on some payroll and multiple screen names are nonsensical, paranoid.

    Your comments are becoming a laughingstock. Just ridiculous.


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