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DETROIT (Dow Jones) -- The Canadian Auto Workers said Friday it struck a tentative deal with General Motors Corp. (GM) that clears the way for the auto maker to win more government aid.

The deal, which marks the third time in a year the union has agreed to cost cuts, will freeze pension increases until 2015 while protecting benefits of existing retirees. It comes a day after GM reached a concessionary labor deal with the United Auto Workers in the U.S.

The agreement provides clarity on GM's financial position that was needed to move forward with a federally-funded restructuring in the U.S.

GM is depending on U.S. government funds to carry it through an increasingly likely bankruptcy filing that would come by June 1.

CAW President Ken Lewenza said Friday a bankruptcy filing by GM is now "very likely," though the company is doing all it can to pull off an out-of-court restructuring. The labor deal would still stand in bankruptcy court, he said.

The Canadian government followed U.S. President Barack Obama in shooting down an earlier round of concessions and demanding deeper cuts as a condition of winning federal support. Lewenza said the government signed off on the labor deal later Thursday.

"The consequences of saying no would have been disastrous," Lewenza said. "Government support comes with a price. And, for us, that price is a growing list of demands."

Workers will vote on the contract Sunday and Monday.

The Canadian government has promised GM $3 billion to help it restructure. Negotiations between the Canadian government and GM continue on commitments by GM to keep jobs in Canada.

Canada also has provided aid to now-bankrupt Chrysler LLC, which earlier struck a similar labor with the CAW.

In addition to the pension freezes for GM workers, the CAW has agreed to forgo cost-of-living increases and require retirees to cover more of their own medical costs.

GM's pension fund in Canada continues to run at a $6.5 billion to $7 billion shortfall. The CAW said it will likely take 10 years for GM to fully fund its pension obligations.

Lewenza said the deal will save GM $8,600 per member over the life of the contract.

-By Sharon Terlep; 248-204-5532; sharon.terlep@dowjones.com.