TORONTO - The head of the Canadian Auto Workers says the federal and Ontario governments are forcing the union and General Motors Canada to come up with a new labour agreement by the end of next week in order for the company to get bailout funds.

Ken Lewenza said the governments have set a strict deadline of May 15 for the two sides to reach a new agreement, to replace one that was negotiated in March before the CAW agreed to even bigger concessions with Chrysler.

"If we don't get a deal, the governments will provide no financial support and GM Canada will be liquidated," Lewenza said at a press conference Thursday.

"Who would ever think that General Motors could possibly be in a position where they could potentially liquidate and potentially have no existence here in Canada? It's quite frightening," he added.

Ontario Finance Minister Dwight Duncan said GM needs to prove it can be viable going forward or it won't receive government help.

"We are telling them that they have to be viable and competitive and otherwise, as I understand it, they won't get a viability agreement in the United States and therefore government loans won't flow," Duncan said Thursday.

But Tony Faria, co-director of the automotive research centre at the University of Windsor, said it's unlikely governments would allow GM to go under this late in the game.

"To date, the governments in both Canada and the U.S. have gone overboard to ensure the continued viability of the companies, and to pull the rug out from under GM Canada at this stage would certainly seem to be contrary to everything the governments have done to date," Faria said.

Ontario Premier Dalton McGuinty said he spoke to Lewenza and a representative from GM and believes a deal can be reached.

"I can reiterate what Prime Minister Harper has already said: we cannot come to the table on behalf of Ontario taxpayers or Canadian taxpayers unless there are significant contributions made by everybody else. And I'm convinced that that can be done," he said ahead of the CAW's news conference.

The CAW said the governments' main issue with the previously ratified agreement is that it fails to reduce GM Canada's legacy costs -- primarily pension obligations -- by enough.

But CAW economist Jim Stanford said it's nearly impossible to make GM's legacy costs competitive with those at Toyota's Canadian plants, because GM has far more retirees.

Lewenza said the union will do what it can to protect Canadian jobs, but said he doesn't think the issue of pension payments can be solved at the bargaining table.

"Our responsibility as a union is to do whatever we can to preserve the jobs that we have left in General Motors and Canada because the only way you can protect the pensions long term is to continue to operate," Lewenza said.

"But it is absolutely impossible that we can correct the legacy costs at the bargaining table."

Lewenza said he's frustrated that the government is intervening in a company's operations and forcing the union and GM to head back to the bargaining table for the third time in a year.

"We put our hearts and our minds with our members in the workplace today who are going to be asked for the third time in 12 months to ratify another agreement to meet the objectives of the government," Lewenza said.

The University of Windsor's Faria said there's a chance workers may be so fed up with being asked to come back to the table that they may refuse to ratify any new agreement that's put before them.

"The issue will be how well that flies with GM workers who will be then called back to vote once again on reductions to their benefits, and it may not sit very well with them," Faria said.

"I think there's going to be a clear issue in that regard. While in the last go around the ratification was reasonably easy, I think this time it would be much more difficult with the possibility that it would not be approved."

The agreement reached between the CAW and GM in March, less than a year after the two sides had reached a three-year contract, provided the company with about $7 an hour in labour cost savings by freezing wages, reducing paid time off, scrapping an annual bonus and requiring CAW members to contribute $30 a month to their health benefits, among other things.

GM chief executive Fritz Henderson, who replaced Rick Wagoner at the end of March, has said the agreement made CAW workers competitive with their counterparts in the United States.

But the federal and Ontario governments have said the company must set the bar higher and aim to be competitive with non-unionized Toyota plants in Canada.

A new agreement would likely mimic a deal reached with Chrysler late last month that provided that company with about $19 an hour in savings.

That agreement includes all the concessions made to GM. It also reduces paid relief time, cuts some supplementary unemployment benefits, increases prescription drug fees, eliminates semi-private hospital coverage and gets rid of the employee car purchase and tuition rebate programs, among other things.

The agreement will also help Chrysler reduce its legacy costs by giving it 10 years instead of five top up its pension fund and, for the first time ever, workers will contribute $1 per hour toward their pensions.

GM Canada currently employs 10,300 hourly workers in southern Ontario at car and truck plants in Oshawa, a transmission plant in Windsor and an engine plant in St. Catharines. It also operates the GM-Suzuki joint-venture CAMI plant in Ingersoll.

The truck plant in Oshawa is slated for closure this spring while the Windsor transmission plant will close next year.