Nearly 600,000 Canadian jobs would be lost with collapse of Big Three: report

TORONTO - Canada would lose nearly 600,000 jobs within five years if the Big Three automakers completely shut down, according to a report prepared by the Ontario government.

The 11-page report projects a bleak economic picture for the province and the rest of the country if the automakers went out of business.

Effects on employment would be felt right away, the report states, with Canada losing 323,000 jobs if production ceased immediately, 281,800 in Ontario alone, the report forecasts. Those figures would climb in five years to 582,000 jobs nationally in 2014, 517,000 of those in Ontario.

A cut in production by 50 per cent would eliminate 157,400 jobs nationally immediately, 141,000 in Ontario. By 2014, 296,000 jobs would be lost, 269,000 in Ontario.

The depreciation of the dollar, lower interest rates and lower production costs eventually help the economy to partially recover but the loss of the Detroit Three leaves a permanent dent in Canada's economy in terms of jobs and output, the document says.

The collapse of the Big Three would have far reaching effects, including a reduction in production by the Canadian automotive parts industry of 80 per cent, the report predicts.

The Canadian subsidiaries of the Detroit Big Three automakers had asked Ottawa and Ontario for financial aid that could total as much as $6 billion.

Last Friday, the federal government and Ontario reached a deal to offer $3.3 Billion Cdn to Canada's auto industry, contingent on the approval of a proposed $14-billion US aid package in Washington.

The U.S. bailout package collapsed in the Senate on Thursday night. But the White House has said it is considering using money from the $700-billion US Wall Street rescue fund to support the domestic automakers.