By John McCrank

TORONTO, Nov 14 (Reuters) - The premier of cash-strapped Ontario said on Friday he will do all he can to shore up support for the struggling auto sector, but only if the companies bring job guarantees and other assurances to the table.
"There has to be some assurance that we're talking about enhanced prospects for long-term viability here in Ontario, including the protection of our jobs," Premier Dalton McGuinty said at a press conference at the provincial legislature.
Ontario is the heartland of auto production in Canada. But the auto sector has been bleeding jobs as the Detroit Three auto companies burn through cash trying to restructure their operations in the height of an economic downturn.
The premier was speaking before Toronto meeting with executives from General Motors of Canada, Ford Motor Co. of Canada, Chrysler Canada, Toyota Canada Inc and Honda Motor Canada Inc. The companies are expected to ask for millions of dollars in tax-funded support.
"They are going there to speak with the premier ... in terms of solutions and make sure we get some cash to proceed with the completion of restructuring and bring more advanced fuel-saving technologies to the market," said Mark Nantais, president of the Canadian Vehicle Manufacturers' Association.
The association represents the Detroit Three and set up the meeting between the premier and the auto executives.
It said 130,000 jobs are directly linked to auto assemblers and suppliers in Ontario and one in six jobs in the province are in some way tied to the sector.
McGuinty said the auto industry generates C$28 billion ($22.8 billion) annually for the province.
But Ontario has slipped into "have-not" status, forecasting a C$500 million deficit.
That's largely due to the beating the manufacturing sector has taken due to the downturn in the U.S. economy, where more than three-quarters of Canadian exports are sent, and it has made critics more vocal about how tax dollars are being spent.
Kevin Gaudet, Ontario director of the Canadian Taxpayers Federation, told Reuters he thinks shelling out cash to the automakers won't help, because they're building gas-guzzling cars people don't want.
He said the Ontario government has given C$352 million in loans to the Big Three in the past five years, along with C$430 million from the federal government, and since then, the companies have laid off 6,000 Ontarians.
"That's C$782 million of taxpayers' dollars that have gone to do nothing but prop up bloated salaries and executive bonuses," he said.
He said his organization would rather see broad-based relief for all businesses by reducing payroll taxes.
McGuinty said the industry is so important "it's in the national interest that we shore up the auto sector."
He said the federal government would have to be a part of any aid plan, as Ontario alone cannot compete with the United States, which is considering a $25 billion package to help the sector.
The Canadian government, while saying it is open to aid requests from the industry, has raised questions about how effective it would be now without big changes to the industry.
"There is, especially within the auto sector, some very difficult restructuring that is going especially among the Big Three, and there needs to be some additional progress there, at a company level, an industry level, in terms of addressing some of the challenges in their current business model," a senior Canadian government official said.

The official -- briefing reporters in Washington on condition of anonymity ahead of an international financial summit -- said government support ahead of addressing company restructuring would prove less effective than aid given afterward.

($1=$1.23 Canadian)

(Additional reporting by Randall Palmer; Editing by Frank McGurty) Keywords: CANADA AUTOS/ONTARIO (john.mccrank@thomsonreuters.com; +1 416 941 8083; Reuters Messaging: john.mccrank.reuters.com@reuters.net)

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