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The fallout for Canada's economy if the Detroit Three automakers were to fail would be catastrophic, resulting in nearly 600,000 jobs lost, a new report claims.

The Ontario Manufacturing Council study released Tuesday suggests the impact would be sharp and immediate if Ford, General Motors and Chrysler were to collapse as a result of the slowing economy and changing market demand.

The report by the Centre for Spatial Economics -- which does forecasting work for the federal finance department -- projects 323,000 jobs in Canada would be lost immediately, with 281,000 of those in Ontario.

Within five years, the job loss across Canada would climb to 582,000. The vast majority of those jobs -- 517,000 -- would eventually be lost in manufacturing-heavy Ontario.

The impact would start in the automotive sector, then ripple out to other parts of the provincial economy such as the retail and service sectors.

Even if the auto industry's output dropped by half, nearly 300,000 jobs would be lost across Canada, with 270,000 disappearing in Ontario, the report said.

The lost taxes would also hammer the ability of the provincial government to fund necessary programs, it said.

That simply can't be allowed to happen, Ontario's Economic Development Minister Michael Bryant said Tuesday.

He called for a government bailout of the industry.

"Auto is to Ontario what the oilsands is to Alberta and I don't think anyone would suggest the oilsands is expendable to our economy, neither is auto expendable to our economy," Bryant said at a news conference in Toronto.

He said the report makes it clear the demise of the auto industry in Canada is the "economic equivalent of a nuclear freeze with catastrophic effects that would knock us into a deep recession."

He said governments, both provincial and federal, must step in to help the industry, as one of the last lenders still able to offer the lifeline needed.

The notion that the North American auto industry should be left to sink or swim is simply wrong, he said, noting that with help the auto sector will continue to improve.

"So transformation for the auto industry? Absolutely. Armageddon? No. Our government won't let that happen. We won't let that happen because of the catastrophic effects laid out in this report," Bryant said.

Credit problems to blame: analysts

Some analysts say the current problem is that the Detroit Three can't get the cash they need from the banks. Government assistance, in the form of loan guarantees and lines of credit, would give them the leeway to restructure.

David Paterson, vice-president of corporate and environmental affairs for General Motors of Canada, told Â鶹ӰÊÓnet that automakers desperately need access to funds to keep their businesses afloat.

"What we're really looking for is access to liquidity, which we cannot get from the banking sector right now with all the credit locked up," he said Tuesday.

"We really are looking for temporary loans that we'll repay once we get through this restructuring."

Paterson said the auto sector is "hugely appreciative to the government of Ontario and the federal government" for their intentions "to step up so that we can keep this industry and its supply chain moving."

Everyone concedes that jobs will be lost, but the industry should survive.

Although some have accused the industry of fear-mongering, "it's not so much fear-mongering as this is a real crisis," said the council's Rob Wildeboer.

"This is a real crisis in a core industry for this country," he said.

Ontario NDP Leader Howard Hampton said the province should demand job guarantees in exchange for any financial assistance. Failing such guarantees, it should get an equity stake in the companies in exchange for help, he said.

With a report from CTV Toronto's Paul Bliss