TORONTO - Ontario's pension plan safety net isn't large enough to cover auto workers if GM goes bankrupt, Premier Dalton McGuinty warned Wednesday.

"The money available in that is very, very modest," McGuinty said, noting the Pension Benefits Guarantee Fund totals about $100 million - not nearly enough to cover the billions of dollars involved in the automakers' pensions.

"That comes nowhere near meeting any liabilities - for example, for the auto sector alone, to say nothing of all the other sectors."

On Tuesday, federal Industry Minister Tony Clement said Canadians need to be prepared for possible bankruptcy filings in the auto sector.

McGuinty wouldn't say whether he agreed with Ottawa's assertions, but maintained he's committed to helping the sector, whether it faces court-ordered bankruptcy protection or not.

"I just don't want people to equate proceedings inside the court as somehow spelling the end of the industry in Ontario because that's not what it would be about," he said.

Still, there's a "real pension issue" in the province, and even topping up the safety net may not be an option.

"We would never have all the money that would be needed to top it up to meet all the demands for all Ontarians who are experiencing troubles with their pension plans," McGuinty said.

Speaking in Oshawa, Ont., federal Finance Minister Jim Flaherty said he wasn't surprised by McGuinty's comments.

"It's not that large a plan," Flaherty said, adding the pension fund was tapped during Algoma Steel's difficulties when he was finance minister of Ontario.

"What we all need to do is pitch in and be prepared to make the compromises and the sacrifices that need to be made to save a large part of the Canadian automobile industry."

Since 1980, the pension fund has provided the province's pensioners with up to $1,000 per month in the event a pension plan fails to provide its full benefit, or any at all.

Experts warned in February that the unique safety net was teetering on the edge of being wiped out and could fold if a large corporation were to go under.

The program is funded by corporate payments, and the Ontario government is in no way required to save it.

In a report late last year, pension expert Harry Arthurs recommended the province require pension funds to have assets equal to 105 per cent of their liabilities before they can stop putting funds into the plan.

Ontario Finance Minister Dwight Duncan said the government was looking at Arthurs' recommendations closely because the fund has been underfunded since its inception.

It's too early to say how much money taxpayers may have to pay if the companies do go bankrupt, however, or to speculate about the shape of any final bailout, he added.

"As, presumably, the Obama administration injects more and more money into the auto sector in the United States, if Canada's going to maintain its 20 per cent commitment, that number just keeps rising," Duncan said.

"Right now we don't really have a sense of what it is."

Opposition Leader Bob Runciman expressed concern about any possible bailout of pension plans, saying taxpayers who face dwindling pensions could be forced to prop up those of the automakers.

"There may be some way the government and taxpayers can assist, but to come in with a 100 per cent bailout of pension plans that most taxpayers will not have access to, I think, would be troublesome to the vast majority of people," Runciman said.

Canadian Auto Workers union president Ken Lewenza said the Ontario government has a "moral and legal responsibility" to help protect the pensions of all workers in the province, and should be strengthening the provincial pension backstop, not weakening it.

"GM's pension fund is in trouble largely because of the failure of provincial pension regulations," Lewenza said. "For the government to now suggest that retired autoworkers would be denied the protection of this fund is unconscionable."

On Tuesday, Clement announced the federal government is providing nearly $1 billion in guarantees to boost dealings between consumers, parts suppliers and the auto companies.

But Clement also said the survival of the automakers is no longer assured, now that they have been asked to submit new plans. Chrysler has until the end of April and GM until the end of May to resubmit restructuring programs that would point to long-term viability.

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