Even while struggling to stay alive and asking for funds to do so from both the American and Canadian governments, Chrysler finds itself even deeper in the hole after receiving a tax bill for $500 million (in Canadian dollars) from the Canadian government. The tax bill is due to the government reassessing taxes in light of something called “transfer pricing,” which is a way companies sometimes hide profits by moving money between subsidiaries. The Toronto Globe and Mail reports:
 

According to Federal Court documents obtained by The Globe and Mail, the Canada Revenue Agency began notifying Chrysler Canada in 2002 that it had been reassessed and owed “substantial increases” in taxes for three years starting in 1996. The reassessment, one of three issued against the company between 2002 and 2005, targeted the pricing of automobiles and parts that crossed the border between Chrysler Canada and its Detroit parent.

The court documents do not reveal the amount of back taxes that Canada Revenue is seeking. But according to documents filed with Ontario’s Land Registrar, the tax agency filed a $500-million charge or lien in September against Chrysler’s operations in Brampton, Ont. Tax experts said the lien is believed to be one of the largest ever served against a company in Canada and typically such claims do not reflect the full amount of taxes owed.

Chrysler Canada wants the tax bill to be considered as part of the bailout package, while the government of Canada refuses to lump the two issues together as they negotiate a deal for public funds similar to what is going on in the United States.