Canada will provide additional help to the auto sector to prepare for the possible bankruptcy of U.S. automaker giants, Industry Minister Tony Clement said on Tuesday.

A total of 700 million Canadian dollars (560 million U.S. dollars) will be provided as export insurance to auto parts companies once their U.S. automaker clients cease production, the minister said at a press conference in Ottawa.

Ottawa will also help consumers by backstopping auto warranties in the event that a carmaker fails, he said.

A separate fund will be established to pay for warranty repairs on each new vehicle sold by Chrysler Canada and General Motors Canada while they are restructuring.

Clement said the federal and Ontario governments must prepare for any possibility, including the possible bankruptcy restructuring of General Motors Corp.

Reports say the Detroit-based U.S. auto giant is preparing to restructure under bankruptcy laws in both Canada and the United States.