The head of the Canadian Auto Workers says the union and General Motors Canada are closer than they were last night to a new labour concession deal, but he can't say for sure when a new agreement may be reached.

Ken Lewenza said Saturday that talks carried on until 4 a.m in downtown Toronto after the two sides missed a government-imposed deadline of midnight Friday to reach a deal.

In an email to CTV Toronto, a senior government official said that the talks are being allowed to continue because some progress has been made.

A source at GM, described the negotiations as "dynamic and fluid."

"We're closing the differences almost every hour, but this is tough sledding," Lewenza told CTV Newsnet in a telephone interview. "I don't really call it negotiations. It's not like we have any demands on the table. It's trying to minimize the demands that the corporation has on our members. And that's difficult to say the least."

According to Lewenza, government officials who asked for a progress report on Friday night's negotiations were satisfied that the talks did not appear headed for a breakdown.

Ailing GM and Chrysler must both submit viable restructuring plans in order to receive billions of dollars in federal and provincial government bailout funds.

Lewenza said the main objective for the union is to make cost-saving concessions "without touching our wages, our benefits and our pensions."

The union has offered to cut the same deal it did with Chrysler, which resulted in a total compensation cut of $19 per hour, or about 25 per cent. But Lewenza said Friday that GM officials have indicated the Chrysler deal "doesn't meet their needs."

The Chrysler deal protected base wages for workers, but benefits took a hit.

If the two sides fail to reach a new agreement, both governments will deny bailout funds to the company, which could force GM Canada into liquidation, Lewenza said Friday.

While the company and the union reached an agreement in March that reduced total labour compensation costs by $7 per hour, or about 10 per cent, both governments said the cuts did not go far enough and sent the two sides back to the bargaining table.

On Saturday, Lewenza said the March agreement, in addition to the Chrysler deal, would have resulted in $1.5 billion worth of savings, but that further cuts to wages is not the solution to saving the company.

"We could absolutely work for nothing and it wouldn't turn this industry around," Lewenza said. "There are a number of public policy issues that have to be addressed. And if this was just about reducing wages even a buck an hour and all of a sudden I could say to all of our members, 'Hey, you have job security now as the result of that decision...' Well, that's not the case."

GM Canada employs 7,500 hourly workers at a car plant in Oshawa, a transmission plant in Windsor and an engine plant in St. Catharines. It also operates a CAMI plant in Ingersoll, a joint venture with Suzuki.

On Thursday, an Oshawa truck plant closed, while the Windsor factory is to shut down next year.

The union is expected to update the progress of negotiations later Saturday afternoon.

With files from The Canadian Press