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Ontario sells remaining GM shares acquired from bailout

Ontario's Finance Minister Charles Sousa fields a question from a journalist after delivering his Fall Economic Statement in Queen's Park Legislature, Toronto on Monday November 17 2014. Photo: Chris Young for The Globe and Mail

Chris Young/Chris Young for The Globe and Ma

The Ontario government has unloaded the last of its shares in General Motors as it looks for cash to build public transit and highways.

The sale, announced hours after the markets closed Wednesday, is expected to reap $1.1-billion. Finance Minister Charles Sousa's office said all of that money will be placed in the Trillium Trust, a fund dedicated to paying for the $29-billion worth of transportation infrastructure the province plans to build in the next decade.

Mr. Sousa's office did not provide any further information on the transaction Wednesday, such as the number of shares sold or the sale price. A report from the fall of 2013 said the province had ownership at that time of a little fewer than 37 million shares of GM common stock and 5.4 million shares of GM series A preferred stock.

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The government received the stock as part of a bailout deal with GM in 2009, at the height of the recession. The province contributed $3.62-billion to the deal, along with $7.23-billion from the federal government, in exchange for stock worth about 12 per cent of the auto maker's shares.

Ontario has previously sold some stock, and received repayments from GM.

But the sale is likely to raise some hackles. Unifor, the union that represents workers at GM factories in Oshawa, Ingersoll and St. Catharines, Ont., has urged the federal and Ontario governments to hang on to their stake. Unifor president Jerry Dias believes the governments should use their ownership position as a lever to encourage GM to invest in its Oshawa operations. There are no new or redesigned vehicles allocated to the two Oshawa assembly plants, which means they are in danger of closing later this decade.

GM Canada president Stephen Carlisle said last week that a decision on new vehicles would be made late next year. GM's move will depend heavily on the results of negotiations with Unifor on a new contract, he said.

Last fall, the federal Auditor-General pointed out that, if the governments sold their stake at current prices, they would likely never recover about $4-billion of the bailout dollars.

Advocates of the bailout, however, point to the economic benefit of having high-productivity auto jobs stay in the province as well as the tax revenue the corporations have paid the government.

The federal government still has 73.4 million shares of company stock. Based on GM's closing share price of $35.83 (U.S.) on the New York Stock Exchange on Wednesday, Ottawa's remaining shares are worth $2.63-billion.

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About the Authors
Washington correspondent

Adrian Morrow covers U.S. politics from Washington, D.C. Previously he was The Globe's Ontario politics reporter. He's covered news, crime and sports for The Globe since 2010. He won the National Newspaper Award for politics reporting in 2016. More

Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More

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