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The Globe and Mail

Stimulus 'beginning to bear fruit,' PM says

Prime Minister Stephen Harper releases his government's latest economic update at the Irving-owned NB Southern Railway mechanical shop in Saint John on Sept. 28, 2009.

ANDREW VAUGHAN/The Canadian Press

Stephen Harper, under pressure to demonstrate he's protecting jobs amid the recession, says his minority Conservative government has allocated 90 per cent of the economic stimulus funding planned for 2009.

The Prime Minister didn't say, however, precisely how much construction activity is already under way as a result of stimulus spending for priorities such as infrastructure projects.

"Our effort are beginning to bear fruit. We are seeing stabilization and the beginning of a recovery," Mr. Harper said while visiting a Saint John train yard, surrounded by locomotives and scores of workers.

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He celebrated the fact that Canada is by some measures better off than the United States.

"The unemployment rate in Canada is now one full percentage point lower than it is in the United States - the first time this has occurred in a generation."

Monday marked the Tories' third report on the progress of stimulus spending first announced eight months ago in January of 2009.

Mr. Harper, who was introduced by Finance Minister Jim Flaherty, used the occasion to urge opposition parties to avoid toppling his government and triggering an election. The threat of defeat is at least temporarily stayed, because the NDP has agreed to support for Conservatives in confidence votes for the time being.

He took a swipe at Liberal Leader Michael Ignatieff, who plans to introduce a no-confidence motion in the House of Commons this week.

"The fact that the economy is starting to recover is hardly a reason to force an election," Mr. Harper said.

The Prime Minister argued that a trip to the polls would interfere with economic recovery, although he didn't precisely explain how.

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"Far too many Canadians are still out of work. Too many families are suffering hardship. ... Our recovery could be derailed by events beyond our borders."

The Conservatives are also boosting the total jobs they estimate will be created or sustained over two years by their stimulus package - raising it to 220,000 from earlier projections of 190,000.

Mr. Harper said funds have now been committed for more than 7,500 infrastructure and housing projects, of which 4,000 are in the construction or pre-construction phase.

"From upgrades to the border crossings at Sault Ste. Marie, to a new building at Royal Rhodes University in Victoria, to repairs to the Champlain Bridge in Montreal, ... to highway infrastructure in Nova Scotia, projects are up and running. Jobs are being created and communities across this land are seeing the benefits," Mr. Harper said.

The Conservative stimulus package also includes tax breaks such as increased child benefits, a home renovation tax credit of up to $1,350 and boosts for the working poor.

The government said, however, there is still lots of uncertainty ahead, including around how quickly Ottawa can climb out of deficit. The third stimulus update report noted, for instance, that private-sector forecasts for Canada's tax revenue base in 2013 vary by as much as $100-billion.

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"This is the largest divergence of forecasts since the Department of Finance began conducting surveys of private sector views on the economy," the government's report says.

Mr. Harper criticized Mr. Ignatieff for seeking to bring down his government before having read the third report on stimulus spending. "Did I mention no one wants an election?" he said.

Liberal MP Brian Murphy, however, defended his party's decision not to wait to see what was in the report before announcing they would table a no-confidence motion later this week.

"You'd have to be more hopeful in the track record of Stephen Harper and we are clearly not that hopeful," he told reporters in Saint John. "We've signalled at the very beginning of this session that we gave them their respite"

The member for Moncton-Riverview added: "We saw a steady stream of BMWs and SUVs going in, clearly an invite list, an A-list of Conservatives. I went by three times to get in, wasn't allowed to even hear the Prime Minister speak. So from a democratic point of view this has been quite a slap in the face"

The third report on the progress of stimulus spending noted the following measures are under way:

-- More than 7,500 infrastructure projects including 4,700 provincial, territorial and municipal initiatives; 1,150 projects to repair and renovate federal buildings; 447 projects to improve infrastructure and colleages and universities and about 300 social housing projects.

-- The employment insurance program is providing an additional $5.8-billion in EI benefits this year.

-- About 44,000 Canadians are receiving training through funds flowing to provinces and territories.

-- Improved access to financing for business such as $131-billion in financing support. This money doesn't add extra debt obligations for the Canadian taxpayer because the assets being protected are already guaranteed by Ottawa.

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