MONTREAL, Feb 28 (Reuters) - General Motors of Canada said on Friday it signed an agreement with the Quebec government aimed at increasing to C$1.2 billion ($811 million) from C$800 million the supply contracts it gives in Quebec.
GM's decision follows months of negotiations with public officials after the closure last year of the company's Camaro and Firebird plant in Ste-Therese, the only auto plant that was left in the province.
GM also agreed to give C$10 million in the next five years to university research programs on lightweight materials applications.
In return, the Quebec government pledged C$280 million in financial aid to suppliers and another C$10 million for research on lightweight materials.
Quebec also said it would press other carmakers to increase their business with Quebec-based suppliers by C$400 million.
"Cumulatively, these efforts could increase the annual purchases of parts and sub-systems from C$1.6 billion to C$2.4 billion," Deputy Premier Pauline Marois said in a release.
The agreement also calls for the birth of another acronym, the QAP, which stands for Quebec Auto Partnership. This venture, formed under the umbrella of the Societe generale de Financement, a government economic development agency, will be responsible for co-ordinating all the investments projects and helping Quebec suppliers to get access to government aid.
($1=$1.48 Canadian)