Ontario writes off $445M in old Chrysler debt from bailout
The Canadian PressGeneral Automotive
Provincial write off follows $2.6 billion in uncollectible debt Canadian government wrote off last year.
TORONTO – Ontario has written off $445 million as uncollectable debt from Chrysler, following the 2009 automaker bailout. The federal and provincial governments loaned billions to Chrysler to rescue the company and save thousands of jobs during the recession.
Ottawa wrote off $2.6 billion last year that it wouldn’t collect from Chrysler. A spokeswoman for Ontario Finance Minister Rod Phillips says once that happened, the province had no legal recourse to recover outstanding money.
Ontario loaned the company nearly $1 billion but it has since restructured. The new company, FCA Canada (Fiat Chrysler), says it repaid all of its loan, with interest, six years ahead of schedule. However, the other part of the former company, Old Carco, has been in bankruptcy since then and its debt is unrecoverable.
The $445 million Ontario write-off forms the bulk of the government’s annual write-off of $607 million for last year.