While the United States Treasury is willing to take a hefty loss on its bailout of General Motors, the government of Canada has made it clear that it won't be selling its stake in the Michigan automaker.
"We've always been clear about two things: One, that we will not have a fire sale - we will not sell the shares without getting the best value we can for Canadian taxpayers - and, secondly, that we are a Conservative government. We are not interested in the long term in being shareholders in private corporations," Canadian Finance Minister Jim Flaherty told media gathered in Burlington, Ontario.
Combined, Canada and the province of Ontario own about 9 percent of GM after they invested nearly $11 billion into the bailout that kept GM alive. The federal and provincial governments have about 140 million common shares and an additional 16.1 million preferred shares, which are worth around $3.5 billion Canadian (about $3.54 billion U.S.).
Flaherty further confirmed that Canada won't hang onto its GM shares forever: "Over time, we do intend to divest. On the timing, I'll have to get back to you."
The Minister told media that he and GM CEO Dan Akerson discussed a share sale yesterday morning, although no details were provided.
Yesterday, the U.S Treasury announced that GM will buy back 200 million shares at an 8 percent premium, a figure well shy of breaking even. The Treasury defended its actions, saying that it is willing to take a loss since the bailout saved hundreds of thousands of jobs.
GM, like domestic and Japanese rivals, builds a substantial number of vehicles in Ontario (including the Chevrolet Equinox, pictured). In unrelated news, GM confirmed yesterday that the next-generation Chevrolet Camaro will be built in Michigan instead of Ontario, although the Chevrolet Impala will take its place in Canada. The decision is not believed to have anything to do with the U.S. government's exit plan since it instead consolidates GM's rear-wheel-drive car production.