January 19, 2009 / 8:11 PM / 9 years ago

Tensions ease ahead of budget votes

<p>Prime Minister Stephen Harper answers a question during a media briefing at the Marriott Harbourfront hotel in Halifax, Nova Scotia, January 19, 2009. REUTERS/Paul Darrow</p>

OTTAWA (Reuters) - Canada’s minority Conservative government and the main opposition Liberal Party both sounded conciliatory on Monday ahead of key confidence votes on next week’s federal budget.

Prime Minister Stephen Harper said he saw common ground with Liberal leader Michael Ignatieff on the need for temporary deficits as part of an economic stimulus package, while Ignatieff reiterated his refusal to oppose a budget he had not seen.

“I will read the budget before judging it,” Ignatieff said after a two-day meeting of the Liberal parliamentary caucus. He said he would judge the document as a whole and there was not any single item that would prompt a vote against it.

The January 27 budget must receive the support of at least one of the three opposition parties or the government will fall, triggering either another election or possibly an opposition coalition led by Ignatieff.

Ignatieff has said the budget must look after those hit hardest by the economic downturn.

Harper was asked at a news conference in Nova Scotia about reports Ignatieff opposed the idea of a middle class tax cut.

“Mr. Ignatieff indicated a couple of weeks back that he wanted to see middle class relief and has indicated more recently that he may not,” Harper said.

“I think the link between these two statements is his concern about avoiding a long-run permanent deficit. That is obviously a concern that the government of Canada shares.”

Harper said he saw broad consensus that Canada needed to join its partners in the Group of 20 major economies in significant deficit spending but that the deficits must not become entrenched.

“We’re all on the same page on that score and I think we’re also on the same page on the basic notion that the middle class must be part of our economic recovery,” he said.

The tone contrasted with the bitter words exchanged by the parties in November and December, following the October general election, which saw the Conservatives returned with a larger share of seats in Parliament, though still a minority.

The Liberals had been furious with the Conservatives for not introducing economic stimulus plans in their fall economic update and for policies they described as pure partisan politics. The confrontation almost saw the government brought down, but Harper escaped defeat by having Parliament suspended until January 26.

On Monday, Ignatieff appeared to be leaving as much wiggle room as possible while still registering concerns about large deficits.

“I take a view of the ‘ensemble’ of this budget. Does it protect the vulnerable? Does it save jobs today? Does it create jobs tomorrow. Those are the three things I‘m looking for,” he said.

While he said it was understood that Canada would have to go into temporary deficit to help boost the economy, he refused to say how big a deficit would be too large.

Estimates of the government’s shortfall in the coming year have ranged as high as C$40 billion ($32 billion). Ottawa has posted annual surpluses for more than a decade.

Additional reporting by David Ljunggren and Louise Egan; editing by Rob Wilson

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