The minority Harper government is arming for political battle this fall rather than seeking peace, dismissing the chances of a deal with the NDP to avoid an election and warning its defeat would jeopardize a popular home-renovation tax credit.
Liberal Leader Michael Ignatieff has shaken up Canada's political calendar this week by announcing he will now seek to defeat the 10 1/2-month-old Harper government at the first opportunity - a move that could send the country to the polls in October or November.
The New Democrats have offered a lifeline to the Tories, however, saying they're willing to consider propping up the Conservatives if the government adopts some NDP policies. Jack Layton's party has not released a wish list but has said its priorities include regulating credit-card interest rates.
But Wednesday, senior Conservative cabinet minister Jason Kenney appeared to rule out a deal with the NDP. He told a Calgary radio station that he cannot envision Mr. Layton and the Tories finding sufficient common ground to reach an agreement that would see the New Democrats prop up the Conservative government. The Prime Minister himself later echoed that sentiment.
"Look. We've always tried to demonstrate willingness to co-operate with the opposition parties. We did in the last budget. But we're not for sale to the highest bidder, least of all the NDP," Mr. Kenney told Calgary radio-show host Dave Rutherford.
"It's a party of hard-core left-wing ideologues ... It's not like a moderate, centre-left party. These folks, they drink their own Kool-Aid right? So I don't think we can see a realistic arrangement with the NDP."
Even as they eschewed co-operation with the NDP, the Tories were privately spreading the word through the media that they hope to try to engineer events so that the Liberals defeat them by voting against a $1.3-billion home-renovation tax credit this fall.
Such a move would sow confusion about the future of the tax credit - even though the Liberals have vowed to reintroduce it should they form government - and bolster the Tory campaign theme that an election brings uncertainty.
The plan would unfold like this: The Conservatives are planning to introduce a ways and means motion after the House of Commons resumes in mid-September that paves the way for the second budget implementation bill stemming from the January 27 budget. This will contain everything not passed in the first budget bill, including the home-renovation tax credit, a measure the Tories held back from passage earlier this year.
A vote on the budget ways and means motion will be a confidence vote - the defeat of which can topple the government - and the Tories will attempt to force the Liberals to either blink or strike down a motion that gives effect to the tax credit.
The Canada Revenue Agency Wednesday declined to say how this would affect the tax credit but Conservatives plan to argue this would jeopardize the home-renovation measure, which rebates Canadians up to $1,350 for upgrades undertaken. "If that is defeated, then Canada Revenue Agency can no longer administer it," one senior Tory said.
The Liberals protest that this ploy is dishonest because even if they defeat the Tories on the budget motion they would reintroduce the measure and pass it should they win power.
"This is just a Conservative game," Liberal finance critic John McCallum said. "We are 100 per cent committed to the home-renovation tax credit and will ensure the appropriate legislation is there so people get their tax credit."
Toronto Dominion Bank chief economist Don Drummond, a former federal Finance Department official, said an election would create some "uncomfortable" uncertainty regarding the program. However, he says as long as the measure is ultimately approved by Parliament before the 2010 tax filing season, the credit would not be affected.
"If I was the Commissioner [of the Canada Revenue Agency] I would just stay cool and leave it in limbo," Mr. Drummond said. "People won't be filing until February, March and April of 2010 anyhow. So I'd probably just say 'Hey, I'm waiting to see what happens before the end of the year.' "
Speaking to reporters in Sault Ste. Marie, Ont., Prime Minister Stephen Harper urged opposition parties to support the home-renovation tax credit when it comes up for a vote this fall in the Commons.
"I think we're all a little bit surprised by some of these developments after support being given to the budget, support is now being withdrawn halfway through the budget year and there are still budget measures to be passed," he said. "This government remains committed to that tax credit."
Mr. Harper said he's also not holding out much hope for a deal with the NDP - one that could keep his party in office and forestall the fourth federal election in sixth years.
The Prime Minister noted that the NDP has regularly voted against measures even when they addressed New Democrat priorities such as skills training.
"The NDP has been very proud of the fact, and Mr. Layton says it over and over again that in four years he has never once supported the government on anything important," the Prime Minister said.
"So you know, that's their position. If it changes, you know, if people want to work together on this that will help the economy, we're willing to do that, but we have no indication of that from Mr. Layton."
Separately, Bloc Québécois Leader Gilles Duceppe said he won't shy away from triggering an election this fall but was non-committal on whether he would help the Liberals bring down the Conservatives.
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