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Quebec Finance Minister Nicolas Marceau responds to Opposition questions Thursday, March 21, 2013 at the legislature in Quebec City.

Jacques Boissinot/THE CANADIAN PRESS

Quebec is accusing the federal government of attacking the province with a budget that threatens to sabotage its economy.

On Thursday, Ottawa eliminated the federal tax credit on labour-sponsored investment funds and redirected funds for the province's manpower training program – moves Quebec Finance Minister Nicolas Marceau calls a direct attack against the province that is "nothing less than economic sabotage."

"Our worst fears have become reality … In fact it is much worse than we expected," Mr. Marceau said in a news conference Thursday.

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Mr. Marceau was particularly angry over Ottawa's decision to redirect funds that Quebec used to train unemployed workers into a program that will be defined by Ottawa. The progam will require $70-million a year from each of the two levels of government as well as from businesses.

Reaction from provinces after the budget Thursday was mixed but the strongest criticism centred on changes to the training program. It is meant to use grants to direct people into trades and skills training to "ensure Canadians are getting the skills employers are seeking," but the grant costs are split among employers, provinces and the federal government.

Quebec was the most outspoken against the measures. "They are undoing and sabotaging what Quebec does very well already," Mr. Marceau said. "We have been currently getting $116-million a year … and producing excellent results. $70-million of this money will essentially go to re-creating a federal program that already exists in Quebec."

Quebec was stunned by Ottawa's decision to abolish the 15-per-cent federal tax credit for labour-sponsored investment funds. Few of the funds exist outside of Quebec.

He also said the Harper government was jeopardizing a unique and important economic tool for Quebec, stating that the funds represent $600-million a year in investments for the province.

"If only they would leave us alone we would be content. But not only are they not leaving us alone, they are attacking us," Mr. Marceau said.

Daniel Boyer, the secretary-general of the Quebec Federation of Labour, which oversees a fund with $8.8-billion in assets, was also critical of the budget.

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"This is Quebec-bashing, it is union-bashing," Mr. Boyer said.

With files from Josh Wingrove

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