Prime Minister Stephen Harper says today's announcement by GM Canada that it is investing $850 million in research and development honours a commitment made after his government helped bail it out and he called it a symbol of the company's recovery.

The major investment is set to last until 2016 but the company, and the prime minister, say the benefits for the auto industry will live on long after the cheques stop flowing.

Harper said that when his government and the Ontario government pitched in $10.5 billion to help keep GM Canada afloat in 2009 they helped prevent the long-term devastation of the auto sector in Canada.

"It was a difficult decision but under the circumstances, it was the right one. Indeed it was the only one," Harper said in his remarks at an event in Oshawa Ont., to mark the announcement.

Harper added that sacrifices by GM employees also helped put the company back on the road to recovery.

Ontario Premier Dalton McGuinty, federal Finance Minister Jim Flaherty, Tory MP Colin Carrie and Liberal MPP Joe Dickson are were also at the company's engineering research centre to hear from GM's Canadian president and managing director Kevin Williams.

Harper said the research funding honours a promise that GM Canada made when it took the government's money in 2009.

"GM's robust recovery from the worldwide recession, of which these new investments are a powerful symbol are therefore good news," the prime minister said.

Harper said he takes satisfaction from the investment because of its future implications. He said the money will permeate Canadian centres of learning and industry and "the ripple effects will be felt far and wide."

GM has partnerships with universities and research institutes. At its engineering centres it works on projects including the development of green technologies, cold weather technology and electric vehicles.

Some of the money is going towards furthering these partnerships, while some is going to researchers at the Oshawa engineering centre, one of several facilities in GM's global network.

Oshawa is also home to GM Canada's headquarters and an assembly plant that has seen a lot of changes in the last two years.

Last August, the company announced a $117-million investment at the assembly plant to prepare it to build the new Cadillac XTS.

In June, GM announced plans to close the older part of its Oshawa car plant by June 2013, potentially laying off 2,000 workers. The consolidated plant produces the Chevrolet Impala and the Equinox and was originally slated to be closed in 2008 before a series of extensions delayed its demise.

Harper was asked about the impending job losses at the plant and said his government is always concerned when Canadians lose their jobs.

GM has a flex assembly plant in Oshawa that is getting a share of the production of the new Chevy Impala. That flex line currently employs 2,000 people and currently makes the Chevy Camaro, Buick Regal and soon, the Cadillac XTS.

The company shed tens of thousands of jobs in recent years as it struggled to survive the economic downturn. The streamlining as GM underwent bankruptcy proceedings resulted in job losses at the company's Canadian and U.S. operations and the shutdown of several plants.

GM's president expressed his company's gratitude and said it is striving every day to be a company Canadians can be proud of and that nothing is taken for granted.

Williams said there is a "new energy" at the company and a "zest for innovation."

"We're excited about our future and the possibilities ahead," he said.

With files from The Canadian Press