TORONTO — In an effort to avoid a "catastrophic" collapse of the auto industry, the federal and Ontario governments have announced a $4-billion bailout package for the Canadian subsidiaries of the Big Three automakers.

The announcement by Prime Minister Stephen Harper and Premier Dalton McGuinty in Toronto came a day after U.S. President George W. Bush offered a US$17.4-billion in emergency loans to General Motors and Chrysler.

The Canadian plan will provide General Motors Canada with loans of up to $3 billion and Chrysler Canada will receive up to $1 billion. The companies will get the money in three instalments, with the first portion coming Dec. 29.

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The Canadian Press: Canada offers $4 billion in loans to Canadian subsidiaries of U.S. automakers