The federal government will signal new support for Canadian auto makers in Tuesday's budget in a bid to keep car plants and the jobs they support in Canada.
Currently, Chrysler is deep in negotiations with Ottawa and the Ontario government to kick in up to $450 million of a proposed $2-billion upgrade to its minivan plant in Windsor, Ont.
Although the budget will not specifically mention Chrysler, media reports have indicated that it will signal broad support for auto makers as a key driver of the Canadian economy.
The Conservative government has already earmarked $250 million under the Automotive Innovation Fund. The budget will signal additional investments in the future.
But media reports also indicate that these signals of additional support may also be an effort to placate the auto sector and its unions, who are strong opponents of a Canada-South Korea free trade deal. The auto industry fears the deal would lead to an influx of imports from the Asian country.
Their opposition is the most significant obstacle to securing a deal that would remove tariffs on goods ranging from agricultural products to manufactured goods.
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