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Liberals to back budget despite backlash

OTTAWA - The federal budget is poised to win approval in principle Tuesday despite mounting anxiety among Liberals about propping up Stephen Harper's minority Conservative government.

OTTAWA - The federal budget is poised to win approval in principle Tuesday despite mounting anxiety among Liberals about propping up Stephen Harper's minority Conservative government.

A Liberal amendment to the budget sailed through the House of Commons on Monday night, supported by the Tories.

The amendment - requiring the government to submit periodic progress reports on the budget - was passed by a vote of 214 to 84, with the NDP and Bloc Quebecois voting against it.

The amendment was the price Liberal Leader Michael Ignatieff set for his party's support in the main budget vote Tuesday.

Ignatieff said the Liberals had no intention of withdrawing support for the budget, despite a growing backlash within their ranks.

Four of the party's six Newfoundland and Labrador MPs are vowing to vote against the budget, maintaining that it singles out their province and robs it of some $1.6 billion in federal funding.

Ignatieff spoke late Monday with Prime Minister Stephen Harper to urge him to rethink the budget provisions that penalize Newfoundland.

"I said to the prime minister, 'You can't run a federation this way, unilateral-without-warning changes,"' Ignatieff said following the vote on the Liberal amendment.

"I said, would he push the pause button on those changes and rethink his approach to get greater national unity in a time of crisis, and he said no."

Ignatieff was to have dinner with his Newfoundland caucus at the official Opposition leader's residence Monday night to discuss "what to do next."

He praised the MPs for representing their province but refused to say whether they might face discipline, or be given special dispensation to break ranks in Tuesday's vote.

Earlier Monday, Scott Simms became the third Newfoundland Liberal MP to announce he'll break party ranks and vote against the budget Tuesday if the document isn't changed.

He was followed within hours by a fourth - Siobhan Coady.

"If no solution to this problem is found, then I will not be able to support the budget," Coady said.

The two join fellow MPs Judy Foote and Scott Andrews, who signalled last week their intention to vote against the budget.

Newfoundland MPs said they believe their leader and colleagues understand the intense pressure they're under to oppose the budget from the province's popular premier, Danny Williams.

Still, Todd Russell, Liberal MP for Labrador, said he'll vote for the budget in the best interests of party unity.

"I understand that they're under tremendous pressure," Russell said of his colleagues.

"I do believe though that there are valid arguments that party solidarity, that being united as a party is a very important aspect of parliamentary politics."

Gerry Byrne, the only other Newfoundland Liberal, continued Monday to denounce the budget measures but would not say how he'll vote.

The budget vote is the first test of Ignatieff's ability to control his caucus, which has been notoriously undisciplined for years.

While most Liberals will support the budget Tuesday, Ignatieff suggested they could defeat the government in future if it continues to refuse to rectify the problem. He noted that regional fairness is one of the issues that must be addressed in the progress reports demanded by the Liberals, the first of which is due in late March.

"We're not off to a very good start, let's put it that way."

There was no sign Monday that the government is willing to bend on the issue, which involves a change to the complicated formula for calculating equalization payments to have-not provinces.

Newfoundland no longer collects equalization but Williams says the change reduces related payments under the 1985 Atlantic Accord, which determines the province's share of offshore oil revenues. He says Newfoundland will lose $1.5 billion in offset payments and another $80 million in health care transfers.

Finance Minister Jim Flaherty, who held a private briefing for opposition MPs on the matter, said the change stems from his decision to cap the growth of equalization payments to the rate of economic growth. And he said he won't back off that to satisfy one province.

"Certainly one of the principles involved in equalization is that all provinces should be treated equally," he told the Commons.

"It is not open to one province to elect to have unrestrained growth of equalization, sharing payments, whether it is through the accords or through formal equalization."

After being briefed, Liberal finance critic John McCallum said it appears Newfoundland will lose $1 billion over three years - not the $1.5 billion estimated by Williams. Nevertheless, he said the province has been unfairly penalized, unlike Nova Scotia and Manitoba for whom Flaherty has agreed to cushion the blow from the equalization changes.

Vancouver MP Ujjal Dosanjh, chair of a Liberal advisory committee on intergovernmental affairs, accused the government of using the budget to settle a political score with Williams, who launched an "Anybody But Conservative" campaign during the last federal election.

"The government is one big wrecking crew when it comes to federal-provincial relations," Dosanjh said.

But Newfoundland's lone New Democrat MP wondered why, if that's what Liberals believe, any of them are voting for the budget.

Jack Harris said the hit against Newfoundland is equivalent to reducing transfers to Ontario by $22 billion or Quebec by $14 billion.

"(Liberals) shouldn't be complicit with Harper and his government to allow (them) to do this to Newfoundland and Labrador," Harris said.

 
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