Liberal party mutes anti-budget talk

Wed Jan 12, 2011 4:29pm EST
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By David Ljunggren

OTTAWA (Reuters) - Canada's biggest opposition party on Wednesday edged away from a threat to vote against the government's next budget, muddying the outlook for a spring election.

The Liberals, who indicated late last year they were certain to vote against the budget, said they would decide only after they saw the document, due in the first quarter.

"We will reserve our ultimate decision on the budget until we see it," Liberal leader Michael Ignatieff told reporters, describing C$6 billion ($6.1 billion) in annual corporate tax cuts brought in this year as "crazy."

Canada's minority Conservative government needs the backing of at least one of the three opposition parties to pass the budget. If all three vote against spending plan, the government falls and there will be a new election.

Ignatieff said last year that the measures likely to be included in the budget -- as well as the corporate tax cuts -- meant the Liberals were certain to vote against it.

"Is it a prudent and good choice for Canada to take corporate tax down when you're in a C$56 billion deficit? We're saying these are bad choices," he said.

The tax cuts date from a previous budget. They came into effect on January 1.

Conservative Prime Minister Stephen Harper took power five years ago with a minority government and he won a strengthened minority in an October 2008 election. Polls indicate that an election now would produce yet another Conservative minority.   Continued...

<p>Canada's Liberal Leader Michael Ignatieff speaks during the Liberal caucus Christmas Party in Ottawa December 15, 2010. REUTERS/Blair Gable</p>