Taxpayers Federation Says GM Owes Taxpayers $195 Million for 2005 Government Loan

The General Motors assembly plant in Oshawa, Ontario, Canada on Nov. 26, 2018. (Carlos Osorio/Reuters)

General Motors (GM) still owes the Canadian government $195 million for a 2005 subsidy made in the Oshawa Car Assembly plant, according to the Canadian Taxpayers Federation.

In a news release issued by the federal government on March 2, 2005, it was made plain that the money supplied to GM at the time was considered a repayable contribution by the government.

However, the Canadian Taxpayers Federation (CTF) said records they received through access-to-information requests indicated only 2 percent, or $4.6 million, has since been repaid.

“When a normal Canadian forgets to carry the two on their tax return, the feds send the hounds after us, but they can’t be bothered to collect $195 million outstanding on a loan to a huge corporation,” said Franco Terrazzano, CTF’s federal director.

“The government needs to get taxpayers’ money back.”

Beacon Project

What GM was proposing was a university-based automotive innovation network, according to the 2005 government release. The plan, dubbed the Beacon Project, was “to work with a number of university partners on automotive research and development, and to help address the ‘commercialization gap’ in Canada,” the release said.

State-of-the-art manufacturing capabilities were expected to be a component of the project. It was also going to include the development and integration of environmental technologies.

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“GM is currently the only automaker designing and engineering vehicles that are manufactured in Canada, and this project will serve to enhance its current leadership position in this area,” the release said.

No Jobs

Although the federal government promised more jobs would be created as a result of the investment, the CTF said no new jobs were recorded.

“How can the government claim its corporate welfare is a success when it doesn’t even know if it created jobs?” said Mr. Terrazzano.

CTF also said the documents they received show that, despite claiming the project would boost jobs, the government did not require GM to report back about job creation.

“The estimated jobs fields are not mandatory data fields in the corporate database,” a federal bureaucrat wrote in response to an access-to-information request. “Recipients were not required to report on the number of jobs.”

In the news release, the government described the kinds of new jobs that would be created as a result of the project.

“The new investment will also add new jobs, including high-skill engineering positions, and invest in skills upgrading and training programs,” the government said.

“Why promise jobs if you’re not monitoring the numbers, and why include jobs estimates on the forms if they don’t need to be filled out?” Mr. Terrazzano said.

“Every field is mandatory when we pay our taxes, but bureaucrats seem a lot less diligent when they’re giving away our money.”

More Money

GM continues to get more subsidies, according to the Taxpayer Federation, despite not having made any repayments.

In 2009, GM benefited from a US$10.8 billion bailout from the federal government, according to the Fraser Institute.

GM also secured $518 million from the federal government and the province of Ontario in 2022 as a combined investment for the construction of two new factories in Ontario, one of which would make electric vehicles.

The auto company received even more money in May 2023 for a battery materials facility planned for Quebec.

“Why are the feds giving GM more money when government records show only a fraction of an older loan has been repaid?” Mr. Terrazzano said.