Conservatives downplay deal to keep power

Sun Mar 20, 2011 2:51pm EDT
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By David Ljunggren

OTTAWA (Reuters) - The minority Conservative government played down talk on Sunday that it was close to striking a deal that could help it survive a number of nonconfidence votes in the weeks to come.

The Conservatives, beset by ethical scandals, will present their budget on Tuesday and need the backing of one of the three opposition parties to approve the document.

If they fail and are defeated, Canada will be on course for its fourth election in less than seven years.

The opposition Bloc Quebecois, which seeks independence for the largely French-speaking province of Quebec, says it will back the budget if Ottawa hands over C$2.2 billion ($2.2 billion) for costs involved in harmonizing the provincial sales tax with the federal one.

Raymond Bachand, Quebec's finance minister, said he had initialed a draft deal on tax harmonization and was waiting for federal Prime Minister Stephen Harper to do the same.

"As far as I'm concerned, it's finished," he told Quebec's TVA television on Sunday when asked whether the talking between the two sides had been concluded.

Senior federal officials said there was no deal yet.

"Discussions are ongoing in good faith with the government of Quebec but some points still remain unresolved and there's a fair bit more work to do," said Chisholm Pothier, chief spokesman for federal Finance Minister Jim Flaherty.   Continued...

<p>Canada's Prime Minister Stephen Harper delivers a statement on the situation in Libya in the foyer of the House of Commons on Parliament Hill in Ottawa March 18, 2011. REUTERS/Chris Wattie</p>