CREDIT CRUNCH: As promised, Canada's provincial premiers arrived in Ottawa with an array of multi-billion dollar prescriptions to cure the ailing economy, all of them hoping that it wasn't too late to have significant input on priorities for the federal budget, which many believe will pack a deficit of as much as $40 billion. A senior government official insisted that the meeting between Prime
Minister Stephen Harper and the First Ministers was a genuine
pre-budget negotiation and not a public relations exercise.

While presenting a largely unified front, each province had its own agenda at the meeting, with New Brunswick Premier Shawn Graham pushed for more provincial flexibility on how to spend stimulus funds, and Ontario Premier Dalton McGuinty -- whose province has been battered more than most -- brought a message of much-needed investment in rebuilding infrastructure and supporting laid-off workers. In Halifax, an unlikely team of Liberal, NDP and Independent MPs gathered at the city's shipyard to argue the case for an injection of cash into Canada's shipbuilding industry.

Warning of a different sort of credit crunch, the mayors of Canada's largest cities expressed concern that billions of dollars in infrastructure spending would be held hostage by politicians jockeying for the political credit.


Also at the table were five aboriginal leaders who presented their case for a $4.4-billion spending package that included native housing -- an issue that was granted renewed focus by a house fire on a B.C. reserve that killed five people -- and job training programs. Phil Fontaine, national chief of the Assembly of First Nations, said that it would be a mistake to relegate aboriginal concerns to the status of "afterthought."

POACH-GATE: Liberal Leader Michael Ignatieff is defending his decision to hire a
top-level bureaucrat from the Privy Council Office
after critics
worried he might spill government secrets to the Opposition. Ignatieff
said Thursday that Kevin Chan's integrity is unassailable and Prime
Minister Stephen Harper should not stand in the way of him coming to
work for the new Liberal leader, a former professor of Chan's at
Harvard's Kennedy School of Government.

'MIRACLE': With both engines out, a cool-headed pilot manoeuvred his crowded
jetliner over New York City and ditched it in the frigid Hudson River

on Thursday, and all 155 on board were pulled to safety. It was,
the governor said, "a miracle on the Hudson." One victim suffered two
broken legs, a paramedic said, but there were no other reports of
serious injuries.

FAREWELL: President George W. Bush defended his tumultuous
two terms in a farewell address to the nation
Thursday night. In
his address, he claimed a series of successes at home and abroad.
Reaching back to the Sept. 11 attacks, when the public rallied behind
him, Bush declared the United States will "never tire, never falter and
never fail." Leaving office with the highest disapproval rating
since Richard Nixon, Bush said: "You may not agree with some tough
decisions I have made, but I hope you can agree that I was willing to
make the tough decisions."

GAZA: Israeli forces shelled a U.N. compound in Gaza that had
been sheltering hundreds of refugees from the fighting yesterday, sending
thousands of tons of food aid up in flames. Top Israeli diplomats headed for Egypt and the United States on Friday
in what appeared to be a final push toward a cease-fire to end Israel's
punishing Gaza offensive against Hamas militants.

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