Canada watchdog to issue stimulus spending report

Mon Oct 25, 2010 1:35pm EDT
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OTTAWA (Reuters) - The stimulus package that helped save Canada from the worst of the recession faces the auditor's scrutiny on Tuesday, amid criticism the Conservative government allowed partisan politics to color how it primed the economic pump.

But it's not clear whether the report from Auditor General Sheila Fraser will trigger a political storm like the one she set off in 2004 that helped bring down a previous Liberal government.

Opinion polls show the ruling Conservatives only narrowly ahead of their Liberal rivals, with a general election widely expected in the first half of next year.

The report by Fraser -- to be released at 2 p.m. Eastern (1800 GMT) -- looks into how the two-year C$48 billion ($47 billion) stimulus package was designed rather than how the money was actually spent.

The extra spending is due to stop at the end of March 2011. A report into the program as a whole will be issued in about a year's time, Fraser said in a CBC radio interview on Saturday.

Opposition parties and other critics have accused the government of skewing the program toward parliamentary constituencies with Conservative legislators.

Fraser helped trigger an election in June 2004 after she discovered major abuses by officials working for the then Liberal government.

The Liberals lost their majority in that election and were turfed from power in January 2006.

Fraser will also report on how the Finance Department and the Office of the Superintendent of Financial Institutions have regulated and supervised the country's six largest banks.

($1=1.02 Canadian)

(Reporting by David Ljunggren; editing by Rob Wilson)