March 3, 2010 / 7:54 PM / 7 years ago

Ottawa focuses on stimulus for now

OTTAWA (Reuters) - Canada's Conservative government said on Wednesday it planned to focus on stimulus spending, jobs and economic growth this year, while promising to also cut a record budget deficit.

In a speech outlining the priorities for 2010, Ottawa said it would make it easier for Canadians and foreigners to do business by streamlining regulations, allowing more foreign investment in key sectors like telecommunications and uranium mining and keeping taxes low.

Opposition parties said the speech fell short of expectations but the main opposition Liberals said they would wait for the budget on Thursday before making a final judgment.

Precise details of what the government is planning will be unveiled in the federal budget. The government last year unveiled a two-year C$46 billion ($44.7 billion) stimulus package to offset the worst of the recession.

Ottawa said the top priority would be to implement the second-year of the plan.

"Even as confidence returns to our economy, it would be a mistake to declare that the recession is completely behind us," it said in the so-called Speech from the Throne.

"Too many Canadians still find themselves out of work and events beyond our borders could yet threaten a fragile recovery."

The minority Conservative government needs the backing of at least one opposition party to pass the budget. All three opposition parties said the speech failed to address their concerns about jobs, the environment or long-term pension funding.

However, Michael Ignatieff, leader of the main opposition Liberals, declined to say how he would vote in upcoming confidence votes until seeing the budget.

"I don't hear anyone screaming for an election but I want to register clearly how disappointed (I am)," Ignatieff said after the speech.

"We'll have a look at the budget tomorrow ... I'll wait to see the budget to see those details," he said.

Polls show the Conservatives are neck-and neck with the Liberals, which means neither party can be sure of victory if it were to trigger an election. This suggests the budget will be approved.

The budget deficit for the 2009/10 fiscal year is projected to be a record C$55.9 billion. Ministers have repeatedly promised Canada will be back in the black within five years.

In the speech, the government committed to freezing the operating budgets of federal ministries as well as the salaries of ministers and their offices.

It also vowed to keep taxes low and said it would open the doors further to foreign investments in key sectors such as the satellite and communications industries, prompting an immediate backlash by one media watchdog.

"Intended or unintended, this announcement creates a slippery slope that will likely lead to the sale of Canadian broadcasters to foreign companies," said Ian Morrison, spokesman for Friends of Canadian Broadcasting, an advocacy group.

Canada will streamline regulations affecting its powerful resource sector, a key source of national prosperity, by cutting red tape affecting strategic sectors from uranium mining to natural gas.

"To support responsible development of Canada's energy and mineral resources, our Government will untangle the daunting maze of regulations that needlessly complicates project approvals," the speech said.

It said it would work to prevent unnecessary regulation from unduly inhibiting the growth of the uranium mining industry in Canada, the world's largest producer.

More foreign access to Canadian uranium has been a goal of the government since it was reelected in 2008.

Canada is one of the world's largest producers of crude oil, natural gas, hydroelectric power, as well as base and precious metals.

Citing a joint-review report on the long-delayed Mackenzie Gas Project, Canada pledged to reform the regulatory regime so that commercially viable resources in its northern region are developed, while improving environmental protection.

($1=$1.03)

Writing by David Ljunggren; Editing by Jeffrey Hodgson

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