Canadian government survives budget crisis

Wed Jan 28, 2009 5:22pm EST
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By Randall Palmer

OTTAWA (Reuters) - Canada's opposition Liberals lent key backing to the ruling Conservatives on Wednesday, staving off an early election and killing an opposition coalition that had sought to replace the minority government.

The cash-strapped Liberals announced they would back the Conservatives' 2009 budget and economic stimulus plan if the government agreed to an amendment requiring it to report to Parliament on the progress of its budget initiatives, an idea the Conservatives readily accepted.

"I'm very pleased to state that the government will be supporting the Liberal amendment to the budget. We're very pleased as well that the Liberals have decided to support our budget. We look forward to working co-operatively with them," Conservative House leader Jay Hill told reporters.

The Conservatives, led by Prime Minister Stephen Harper, were just reelected last October but then came within a whisker of being toppled in Parliament by the three opposition parties, which agreed in December to bring down the government and seek to install a coalition government.

By Wednesday, that plan had disintegrated into acrimony after the Liberals gave conditional backing to the budget.

"The coalition is dead, it's finished, it's over," said Gilles Duceppe, leader of the separatist Bloc Quebecois, one of the parties that had signed the agreement.

The coalition idea had proved unpopular with the electorate and the Liberals appeared unwilling to risk the alternative, a fourth election in five years, if they brought down the government so soon after the October 14 vote.

"Canadians don't want another election, and they're tired of political games," the new Liberal leader, Michael Ignatieff, told a news conference. He said the deficit-laden budget, released on Tuesday, responded to the needs of the present.   Continued...

<p>Canada's Finance Minister Jim Flaherty (C) shakes hands with Prime Minister Stephen Harper after delivering his budget in the House of Commons on Parliament Hill in Ottawa January 27, 2009. REUTERS/Chris Wattie</p>