Canada’s federal government has written off a $2.6-billion auto-sector loan that was given to car manufacturer Chrysler LLC during the 2008 economic crisis.
The write-off is among the largest ever for a taxpayer bailout in Canada, and it is mentioned in the 2018 Public Accounts of Canada, which was tabled in Parliament late last Friday.
The loan was made to Chrysler on March 30, 2009 by Ottawa at a time when the car maker was threatening to shutdown operations in Canada. The loan became "non-performing" and grew with interest over the following nine years.
"After exhausting all potential avenues for recovery, a US$1.13 billion principle plus accrued interest write-off in respect of 'Old Chrysler' occurred in March (2018)," reads the Public Accounts report.
At the time of the auto-sector bailouts in Canada and the United States, Chrysler was split in two: an "Old Chrysler" that went into bankruptcy and a "New Chrysler" that has since become profitable and remains in operation today. Now called Fiat Chrysler (NYSE: FCAU), the international firm reported net profits of $4.3 billion U.S. for 2017.
Another separate 2009 loan made to the restructured Chrysler Corp. was repaid in 2011, when the automaker paid $1.7 billion in principal and interest to the governments of Canada and Ontario.
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