June 17, 2009 / 12:20 AM / in 8 years

Liberals back government, election averted

OTTAWA (Reuters) - Canada’s Liberal Party agreed on Wednesday to back the minority Conservative government in a crucial confidence vote on Friday, averting the threat of the summer election that both parties said nobody wanted.

<p>Canada's Prime Minister Stephen Harper pauses while speaking during a news conference in the foyer of the House of Commons on Parliament Hill in Ottawa June 17, 2009. REUTERS/Chris Wattie</p>

Liberal leader Michael Ignatieff stepped back from the brink of an election after Prime Minister Stephen Harper agreed to set up a joint panel to develop proposals to reform eligibility for jobless benefits.

It showed sudden willingness on the part of both men to cooperate and compromise to try to reduce the inherent instability of a minority Parliament.

“The breakthrough we actually have is the willingness of the government and the official opposition to work together on an important public policy matter,” Harper said, pledging to act in good faith with the Liberals.

Canada last went to the polls in October and has had three minority governments since 2004, with the constant threat of another election if opposition parties all vote against the government in Parliament.

Ignatieff will now back government budgetary measures on Friday. Given that the two other opposition parties have promised to oppose them, a Liberal vote against would have forced a fourth election in little more than five years.

Ignatieff threatened on Monday to vote against the budgetary estimates, but he talked with Harper twice on Tuesday and then again on Wednesday about issues that included budget deficits, stimulus spending and a shortage of isotopes for medical tests.

The biggest sticking point was his demand to make it easier for Canadians to collect Employment Insurance benefits.

To resolve that issue, Harper and Ignatieff will each appoint three members to a panel that will seek ways to let self-employed Canadians participate in the system and make the system fairer.

<p>A combination picture showing Liberal leader Michael Ignatieff (L) and Prime Minister Stephen Harper during separate news conferences on Parliament Hill in Ottawa June 17, 2009. REUTERS/Chris Wattie</p>

“I worked to the best of my ability to prove that in a minority Parliament that we can come out of an impasse and find valid solutions for Canadians,” Ignatieff said.

The Liberal leader bristled at the idea, posed by a reporter, that after talking tough he had caved in. “Do I look steamrollered? Next question,” he said.

Marginalized in the whole deal were the two smaller opposition parties, the Bloc Quebecois and the New Democrats, who had been ready to vote against the government, and they bitterly criticized both the Liberals and Conservatives.

Ignatieff will have another chance in the autumn to try to topple the government after the panel reports back on September 28 and after the government delivers a new report card on the economy and its spending that same week.

But with Parliament poised to start its summer break this week, there can now be no election before November.

The Conservatives won the October election with a stronger minority, and Harper said some in Parliament are finding it difficult to accept that his party were the victors.

“I think the last thing anybody should be doing today would be saying, ‘Well, we’ve got an agreement for now, but this only means what we’re really going to do is defeat the government in the fall.’ I think that would be crazy,” Harper said.

Some Liberals had wanted Ignatieff to strike now and force an election while the party has a slim lead in opinion polls, and the economy is at its weakest.

Other Liberals had warned of a possible voter backlash for causing a political vacuum in the middle of an economic crisis. They also said the party needs more time to organize, appoint candidates and raise money.

Harper had been confident because the Conservatives are flush with cash and better organized, but he appeared to recognize the risk remained that his party could lose power.

Additional reporting by David Ljunggren and Louise Egan; Editing by Peter Galloway

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