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Liberal Leader Stéphane Dion gave the clearest indication to date Monday that he may let the Harper government's Feb. 26 budget pass instead of voting against it and triggering a federal election.

During a stop in Quebec City Monday, he acknowledged he won't get what he wants in the budget and appeared to lower the bar for what he'd accept, saying he might let it pass if it's “not too harmful” for the economy.

“It won't be a Liberal budget. Unfortunately, the ideas I have put forward won't be in the budget,” Mr. Dion said of the looming fiscal plan.

“But we also have to respect the decision of the voters in 2006,” he said, referring to the Conservative victory in the last federal election.

“Therefore, if it's a budget that appears to us as being acceptable or at least not too harmful for the Canadian economy, we could let it pass and avoid $350-million in [taxpayer] expenses for an election,” the Liberal Leader said.

The 126-seat Tory caucus needs 29 opposition MPs to support the budget in order to pass it. Neither the Bloc Québécois nor the NDP is expected to back the fiscal plan.

Mr. Dion's comments came almost a week after former leadership rival Bob Rae urged Mr. Dion during a Liberal caucus meeting to wait until spring before defeating the Tories, rather than forcing an early election over the budget.

But Liberal finance critic John McCallum said the Liberals have not decided whether to vote against the Tory budget, saying they won't make that decision until they read it.

Liberal campaign organizers in Quebec have been less than enthusiastic about going into a spring election, asking their leader for more time to raise money and recruit candidates.

Mr. Dion suggested yesterday that with more time he will be able to create enough momentum in Quebec to swing the vote in his party's favour.

“When Quebeckers get in the mood to vote for a party, things can move quickly. I am confident we can create that momentum,” he said.

The Liberal Leader also took a swipe at the Conservative attack on him Sunday, when the Tories issued a report alleging that his party's spending promises would push Ottawa into deficit and rack up $62.5-billion in debt.

He said the Tory charge was false, adding that he'd never let Canada fall back into deficit and accusing the Conservatives of using their attack to distract from their own missteps.

“Never will I allow my country to go through that again. It's a big lie,” Mr. Dion said. “In order to mask the mistakes they've made, they have come with this big, 68 pages of lies.”

In a speech at Laval University's Institute on the Environment, Development and Society Monday, Mr. Dion said he thinks voter opinions on climate change and the environment will have tremendous influence in the outcome of the next election.

In answer to questions from students, Mr. Dion contended that if Quebec separated, it would weaken Canada's ability to protect the environment and persuade Alberta to slow down development of oil sands projects – big emitters of greenhouse gases thought to cause climate change.

Federal Finance Minister Jim Flaherty is expected to deliver an exceptionally slim budget on Feb. 26 and tell Canadians that Ottawa has had to slash projections for how much spending room it has, due to the softening economy.

The cash-strapped Tories have nearly emptied Ottawa's coffers of spare cash since 2006, taking about $30-billion worth of annual government revenue and doling it out in tax cuts and spending, including $12-billion in reductions to the goods and services tax.