GM, Chrysler get Canadian aid, but told to cut more

"I mean, at the end of the day, it's not legal to say to pensioners that you're not entitled to the pension benefits that you left on."

Lewenza said the union would be willing to sit down with the federal and provincial governments, and the companies, to look at the possibility of setting up a plan similar to what the United Auto Workers union and the companies have agreed.

In the United States, GM and Chrysler have obligations to a retiree healthcare trust, known as a Voluntary Employee Beneficiary Association, and are pushing the UAW to allow them to pay the union in stock rather than cash for half of the remaining obligations.

That is proving to be a major issue preventing tentative concession deals between the UAW and the companies.

GM has until the end the May to present its plan.

If the companies fail to prove they are viable, bankruptcy is an option, Clement said.

"While we believe in the long-term viability of these companies, I agree with (U.S.) President (Barack) Obama that we must also consider the possibility of court-supervised restructuring," he said.

($1=$1.26 Canadian)

(Reporting by John McCrank in Toronto, and Randall Palmer and Louise Egan in Ottawa; Editing by Frank McGurty)