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The Canadian government said Monday restructuring plans submitted by the Canadian units of Chrysler LLC (C.XX) and General Motors Corp. (GM) don't go far enough, and gave the companies another 30 and 60 days, respectively, to put forward new proposals, the same as the U.S. government.

Chrysler Canada has to submit new plans by the end of April, and GM Canada (GMC.YY) by the end of May. The government said the companies aren't viable based on the plans they have already submitted, and suggested that the underlying sales assumptions they used are too optimistic.

GM Canada has asked for C$6.5-C$7.5 billion in aid from the Canadian government, in proportion to the company's 20% share of total production in the U.S. and Canada. Chrysler Canada has asked for C$4 billion, in proportion to its 25% share of production in North America.

The Canadian and Ontario governments in December promised the companies a total of C$4 billion of interim loans to tide them over while they work out restructuring plans.

The first C$250 million of a C$1 billion loan to Chrysler Canada will flow Monday. Another C$500 million will flow in early April and the final C$250 million May 1.

The government is still working out details of a C$3 billion loan to GM Canada and hopes to finalize it soon.

The loans are callable if the companies' restructuring plans don't meet with government approval.

The government said Chrysler can't survive as a standalone company and needs to strike a workable alliance with Italy's Fiat (F.MI), which is key to securing more aid.

The government won't seek changes to the executive lineup at the Canadian companies. The U.S. Administration ousted GM Chief Executive Rick Wagoner over the weekend.

-Nirmala Menon, Dow Jones Newswires; 613-237-0668; nirmala.menon@dowjones.com

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