Flaherty to review aid to forestry, others

Tue Dec 16, 2008 8:49pm EST
 
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SASKATOON (Reuters) - The Canadian government will consider providing emergency aid to sectors other than automakers, including the beleaguered forestry industry, Finance Minister Jim Flaherty said on Tuesday.

Flaherty made the remarks the evening before a planned day-long huddle with provincial finance ministers to work toward crafting a stimulus package to be delivered in a January 27 budget.

"I'm sure we're going to review that in our discussions because there are other sectors of the economy that are weak, like forestry," he told reporters in Saskatoon, Saskatchewan, the site of the meeting.

It was the first time Flaherty had allowed for that possibility. Over the weekend, Industry Minister Tony Clement opened the door to helping the forestry, mining and other industries in an interview with CTV television.

The Forest Products Association of Canada said on Tuesday it was not looking for an auto-style bailout but asked that the federal budget include tax changes to help the sector, expanded unemployment insurance for workers and measures to ensure credit is available for producers.

The Conservative government committed last Friday to help the ailing auto industry but made its offer contingent on a U.S. bailout of the Detroit Three -- General Motors Corp, Ford Motor Co and Chrysler LLC.

Industry Minister Tony Clement said a Canadian aid package would reflect Canada's 20 percent share of the North American auto industry. It was not clear exactly how that portion would be calculated but potentially, if Washington offered $14 billion, Canada's part could be roughly $3.4 billion. The U.S. bailout plan was scuttled by Republicans in the U.S. Senate last week but the White House said on Tuesday it was exploring options for extending a lifeline to the companies.

Flaherty said the meeting on Wednesday with his provincial counterparts would focus on ways to speed up infrastructure projects in Canada like highways and bridges -- expected to be the main pillar of his fiscal stimulus plan. The provinces play a key role in approving such projects.

"I'm sure we'll have a discussion about percentages and numbers and the nature of the infrastructure investment. The key is to stimulate the economy which means that we have to have shovels in the ground quickly," Flaherty said.

"It's a two-way street, we need the provinces to get their infrastructure spending ready as well," he said.

(Reporting by Louise Egan; Editing by Gary Hill)