Germany did it months ago and it has been a huge success. Yesterday's budget in the UK announced a similar plan offering car owners with vehicles more than 10 years old a £2000 discount for trading in their car. Obama himself in the USA has backed such an idea too. The same idea was suggested for Canada in early March according to this Globe and Mail article but seems to have gone nowhere so far.
Consumers can feel they are helping the economy and their favorite car-maker while the manufacturers get a large boost in sales. Maybe they could even bias the incentive towards environmentally-friendly cars. Everyone wins. I'd much rather see incentives than those huge loans which will never be repaid. Get with it, Messrs Harper and Flaherty.