January 12, 2008 / 1:12 AM / 10 years ago

Canada won't alter industry aid despite attacks

OTTAWA (Reuters) - Canada’s minority Conservative government on Friday resisted pressure to alter a C$1 billion plan to aid hard-hit one-industry communities despite fierce criticism the package is little more than political blackmail.

Prime Minister Stephen Harper announced a trust fund on Thursday to help workers and said it would be part of the next budget, which is expected in early March. If the budget is not approved by Parliament, in which the Conservatives hold a minority of seats, the aid money will not be spent.

Critics said Harper should make the aid available now and not use it as a tool in the next election campaign. If the budget is defeated, the government will fall immediately and an election will be called.

Jean Charest, premier of the province of Quebec, said he failed to persuade Harper to change his mind on Friday.

“He said again that he’d put it in the budget. I reiterated that it should be immediate,” he told reporters after Harper hosted a dinner for the premiers of Canada’s 10 provinces.

Earlier, Finance Minister Jim Flaherty said there was nothing unusual about making the aid part of a budget.

“We are a democracy ... this is not a dictatorship. We must have parliamentary approval to spend money,” he told reporters. “It’s a money item and we do money items in budget bills.”

The trust fund is designed to help unemployed workers and communities -- many of them in rural areas.

Forestry and automobile industries have been particularly hit hard by the strong Canadian dollar and weakening demand in the United States, Canada’s main trading partner.

Gilles Duceppe, leader of the separatist Bloc Quebecois opposition party, demanded on Friday that Parliament resume sitting next week to adopt the aid plan and accused Harper of playing with people’s livelihoods.

“Above all, he has to abandon this brazen partisan blackmail and separate the adoption of the aid plan from the budgetary process,” he told a news conference. Parliament is due to return on January 28.

Harper, who won power in a January 2006 election, said last month he expected the fallout from the weakening U.S. economy to hit Canada.

The premiers said virtually the entire four-hour dinner with Harper was spent discussing the economy. Harper, who issued a statement afterward describing the talks as constructive, made no specific promises of help.

Dalton McGuinty, premier of the powerful province of Ontario, said he had wanted a commitment of long-term federal aid for workers in the forestry and manufacturing industries.

“I‘m looking for a long-term partner for these folks and I didn’t get that,” he told reporters after the dinner.

The Federation of Canadian Municipalities backed the aid plan but said, “Much more remains to be done to ensure the health and survival of our rural communities.”

($1=$1.02 Canadian)

Reporting by David Ljunggren; Editing by Peter Cooney

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