Ford Motor Co. of Canada Ltd.'s $1.1-billion proposal to redevelop its Oakville, Ont., site appears to qualify for $100-million in financial aid, Ontario Industry Minister Joe Cordiano says in a letter to the auto maker -- the first written commitment of government help for the project.

There are conditions attached and more discussions before a final deal is concluded, but the Ontario government is ready to move on to the next stage of negotiations, Mr. Cordiano said in a letter last month to Ford Canada president Alain Batty.

The letter appears to increase the pressure on Ottawa to do something similar because Ford is seeking about $200-million from the two governments and $100-million is the maximum Ontario will provide under its Automotive Investment Strategy Program.

Sources familiar with the negotiations said yesterday that the federal government has not provided a written commitment to Ford, although Human Resources Minister Joe Volpe announced during the federal election campaign this spring that Ottawa would provide $100-million.

One source said the federal government needs to develop a sense of urgency about the Ford proposal, which calls for construction of a leading-edge flexible assembly plant later this decade. The project would secure about 4,000 jobs in Oakville and possibly create thousands more if Ford duplicates what it has done in Chicago and other U.S. cities where it has asked auto parts makers to locate their plants in supplier parks minutes away from assembly plants.

"Negotiations are ongoing," one federal source said yesterday.

Ford Canada spokeswoman Lauren More said discussions with governments continue, but are confidential.

The auto maker assembles Ford Freestar and Mercury Monterey minivans in Oakville. It shut a pickup truck plant on the site in June.

In his letter, Mr. Cordiano noted "significant and positive progress relating to the Ford footprint commitment to Ontario."

That refers to concerns on the part of Ontario and Ottawa that Ford would receive money for Oakville, but not address the future of two other key operations employing thousands of employees in Windsor, Ont., where the company has two engine plants, and St. Thomas, Ont., home of a Ford large-car assembly plant.

"We want Ford to commit to Ontario -- the whole of Ontario -- so that's it not just one plant," Mr. Cordiano said in an interview yesterday.

The battle for automotive investment is global, he said, but added that he's confident that Ford will choose Ontario.

His letter said Ford needs to provide independent verification that the project would not proceed without government support and that the flexible body shop is sufficiently innovative to meet government requirements.

The governments have raised the issue of Ford's entire operations in Canada in part because they don't want to provide financial help for one assembly operation, only to have the auto maker shut other operations in the province.

That issue arises because there's no new vehicle earmarked for the St. Thomas plant, where the company assembles Ford Crown Victoria and Mercury Grand Marquis full-sized sedans.

That market is slowly withering and competitors are attacking the police-car market, which has been dominated by those cars in recent years, but where Ford may be vulnerable because of gas tank fires and deaths among police officers in some U.S. cities. The auto maker faces several lawsuits.

The Essex Engine Plant in Windsor is similar to St. Thomas in that no new product has been earmarked for it and a new Ford engine program has recently been awarded to two U.S. engine plants.

Engine production at the plant has dwindled to between 250,000 and 300,000 units annually, said one industry source, considerably below capacity. As recently as 2001, the plant produced 479,000 engines.