OTTAWA (Bloomberg) - The Canadian Auto Workers (CAW) union said it reached a tentative agreement with General Motors Corp. (GM) to freeze wages and pensions until 2012 and force workers and retirees to pay a monthly health-care fee in an effort to reduce the automaker's costs.

"We are optimistic the CAW did what was necessary to protect the interests of our members, our communities and ensure that we maintain our Canadian advantage for future investments," CAW President Ken Lewenza said at a press conference in Toronto yesterday. "It's painful."

GM, surviving on $13.4 billion in US aid, was working with the union on ways to find savings by month's end as governments in the US and Canada study plans for further assistance. Canada, which has about 20 percent of North American production, is seeking to maintain its market share.

"The agreement marks a positive further step in GM Canada's restructuring plan," the company said in an e-mailed statement yesterday. "We compliment the CAW for their leadership to share sacrifices in these extremely challenging economic times."

Industry Minister Tony Clement made concessions by the union a condition for