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Canada strikes deal with GM for Ontario investment
TORONTO, Sept 6 (Reuters) - The Canadian government said onSaturday it had struck a deal with General Motors of Canada Ltd(GM.N: Quote, , Research, ) that commits the automaker to invest C$290 million ($273million) at several of its Ontario operations. The announcement is the second of its kind in the pastthree days and may help shore up support for Canada's minorityConservative government in Southern Ontario, where the automanufacturing sector has been bleeding jobs, on the eve of anelection call. Under the agreement, GM will put about C$245 million intoits St. Catharines plant to make fuel-efficient 6-speedfront-wheel drive transmissions, which would support more than300 jobs, Industry Canada said in a release. In Oshawa, where GM recently announced it was shutteringits truck plant, eliminating 2,600 jobs, Canada's largest automaker has agreed to build a mid-sized hybrid vehicle at its carplant. GM will also commit C$40 million for environmental researchat its Canadian engineering center, also in Oshawa. The Canadian government, which is widely expected to call afederal election on Sunday for Oct. 14, is not required tocontribute any new funds. Instead, it said it would not trigger early repayment ofloans it provided GM under a 2005 agreement, of around C$200million, that hinged on minimum employment targets, which GMwill not meet due to the truck plant closure. On Thursday, the government announced it would invest up toC$80 million in Ford Canada (F.N: Quote, , Research, ) facilities in Windsor,Ontario. Canada's auto sector has been hit hard by a combination ofhigh gasoline prices, a stronger Canadian dollar and theeconomic slowdown in the United States, where nine of every 10Canadian-built cars are sold. ($1=$1.06 Canadian) (Reporting by John McCrank)