With GM Canada and Detroit Three autoworkers union Unifor making little headway in contract negotiations, the possibility of government subsidies has raised its head.

At week's end, the two sides were reportedly far apart as the clock ticks down to possible strike action at midnight on September 19. With General Motors as its strike target, Unifor lists new investment and product at the endangered Oshawa assembly plant as its number one demand.

According to the Detroit Free Press, the Canadian workers' union boss is encouraged by talk of indirect federal government intervention.

Citing an earlier report in the Globe and Mail, the publication reports that changes could be on the way for Canada's Automotive Innovation Fund, created in 2008 to offer low-interest loans to automakers and suppliers.

Unifor president Jerry Dias told the Free Press yesterday that the government has signaled to him its intention of switching the fund from a loan program to one that offers grants.

"Do I believe that that will play a role and provide an assistance to us in our negotiations? The answer is yes," Dias said.

The possibility of direct government subsidies would certainly sweeten the pot for GM, though the government hasn't officially declared its intentions, and time is running short to prevent a walkout at three Ontario facilities.

Earlier this week, GM's Cami assembly plant in Ingersoll, Ontario pledged to support Unifor workers in the event of a strike. Cami builds Chevrolet Equinox and GMC Terrain crossovers, and is covered by a different collective agreement. If GM workers walk off the job after their contract expires, Cami's Unifor Local 88 has pledged to not install replacement parts sent to them by U.S. factories.

Production at Cami would be hampered by the loss of parts from GM Canada's St. Catharines engine and transmission plant. Besides St. Catharines and Oshawa Assembly, a parts depot in Woodstock, Ontario would also be affected by a strike.

Subsidies or no subsidies, the union's goal of keeping Oshawa alive hinges on new products, and there seems to be no movement on that front. After losing truck and Chevrolet Camaro production in recent years, the plant's two assembly lines are bleeding product. The plant handles overflow production of the Equinox, as well as the Chevrolet Impala, Buick Regal and Cadillac XTS - products that can (and in some cases, will) be built elsewhere. Its Consolidation Line could depart next year, with no guarantees that its Flex Line won't do the same by 2019.

Speaking to the Toronto Star this week, Kristin Dziczek, director of research at the independent Center for Automotive Research in Ann Arbor, Michigan, said Unifor chose the right tack in seeking new product, but admits the situation doesn't look good.

"There are no products hanging out there looking for a home," she said, referring to Oshawa.

Meanwhile, Dias said he's received support from Dennis Williams, president of the United Auto Workers. The two have a mutual agreement to not undermine any strike action taken by the other - meaning, in this case, that UAW won't agree to increase production at U.S. plants to make up for a loss of Canadian product.