CANADA - Interim loans advanced to General Motors by the governments of Canada and Ontario cannot be used to shore up underfunded pension liabilities.
But it said the loans could not be used for pension scheme funding or to pay off debts to parent companies or taxes.
Canada minister of finance Jim Flaherty said: "Together with the Government of Ontario, we are working in conjunction with the US Government to create a viable industry and to maintain Canada's share of Canada-US production going forward.
"The interim loans to General Motors and Chrysler reflect our priorities to both protect our economy and exercise firm oversight over taxpayer dollars."
Canada minister of industry Tony Clement said: "While the restructuring plans represent progress, they do not go far enough to ensure the long-term viability of these companies.
"Therefore, we are not certifying their proposals. Together with our US counterparts we believe that further fundamental changes are needed."
In conjunction with the US Government, the governments of Canada and Ontario are requesting that both companies undertake additional work to ensure their future competitiveness and that all stakeholders contribute appropriately to improving the overall cost structures in their plans.
This week's edition of Professional Pensions is out now.
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