Canadian Federal Government Writes Off $1.1 Billion Loan To Fiat Chrysler

Canada has quietly written off a $1.1 billion loan to Chrysler, which was given to the carmaker during the 2009 financial crisis.

According to CBC, the write-off was buried in a volume of the 2018 Public Accounts of Canada, tabled in Parliament last Friday. No explanation was given for the write-off in the reference, which didn’t identify the company that received the loan or the industry sector but CBC confirms that the money was lent to Chrysler LLC on March 30, 2009 by the federal government.

“After exhausting all potential avenues for recovery, a $1.125 billion US principal plus accrued interest write-off in respect of ‘Old Chrysler’ occurred in March,” said John Babcock of Global Affairs Canada.

Back in 2009, Chrysler was split in two parts: the “Old Chrysler”, or Chrysler LLC, that went bankrupt and the “New Chrysler” that eventually became today’s Fiat Chrysler Automobiles (FCA). FCA reported net profits of $4.3 billion for 2017.

The non-performing $1.1 billion loan to Chrysler LLC grew with interest over the following nine years, nearly doubling its value. The loan was made by the Harper government in cooperation with the Ontario government.

The Canadian government also gave another loan to the ‘New Chrysler’ in 2009 but that one was repaid in 2011 when the car maker paid $1.7 billion in principal and interest to the governments of Canada and Ontario.