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he Canada Report

Federal budget, with new health care deal, expected Feb. 18

By JIM FOX

© St. Petersburg Times, published February 9, 2003


Canadians will learn about the country's financial state of affairs and whether tax cuts are planned when the federal budget is delivered this month.

John Manley said he will announce his first budget as finance minister on Feb. 18 in the House of Commons.

Spending plans for the Liberal government are expected to reflect the new multimillion-dollar deal for health care funding reached with the provincial premiers in the past week. The deal commits the federal government to at least $17-billion in new health spending over the next three years.

Manley is expected to announce a surplus of about $6-billion for this fiscal year, much higher than anticipated last fall. The surplus was boosted by Canada's continuing strong economic performance.

About $2.5-billion of the surplus will be used for new health spending, with the rest expected to go to debt repayment.

Prospects of further healthy budget surpluses in the upcoming fiscal year will create room for new spending on social welfare, the environment and more tax breaks, Manley said.

Government quiet on Iraq

The Canadian government remains quiet about what the country will do if the United States decides to lead an attack on Iraq against the wishes of the U.N. Security Council.

Foreign Affairs Minister Bill Graham said the government intends to "follow the process that's there (at the United Nations) and make sure it works."

Former Defense Minister Art Eggleton said it isn't clear what would happen if the U.N. decides to give inspectors more time to pursue disarmament in Iraq.

Prime Minister Jean Chretien repeated in the Commons that if the Security Council decides on the use of force, Canada will do its part. But he, too, ignored the question of what Canada would do if the United States moves without U.N. approval.

In brief

The Mounties are looking over another batch of files from the Liberal government's troubled sponsorship program. This follows a forensic audit that found evidence of potential breaches of federal law by seven government workers. The controversy centers on contracts awarded mainly in Quebec to advertising agencies contracted to raise the federal government's public profile by arranging sponsorship of sports and cultural events.

President Bush will make his first official state visit to Canada on May 5. While in Ottawa, Bush will address a joint session of Parliament that will be built around the themes of the trip: trade and international security. He also is expected to ask for Canada's help in delivering a free trade pact covering the Western Hemisphere.

Air Canada is looking for more ways to cut costs after reporting a loss last year of $428-million. Edward Rogers, son of Ted Rogers, founder of the Rogers Communications empire, has been appointed president of the company's cable television unit, Canada's largest cable TV company. Former head John Tory is leaving to run for mayor of Toronto.

Facts and figures

War worries, despite positive jobless numbers, rattled investors Friday. The Toronto Stock Exchange index was down to 6,508 points while the Canadian Venture Exchange was 1,115 points.

Statistics Canada reported a small decline in the number of people looking for work in January, nudging the unemployment rate down to 7.4 percent from 7.5 percent in December.

Canada's dollar returned 65.57 U.S. cents on Friday while the U.S. dollar was $1.5251 Canadian, before bank exchange fees.

The key bank rate remains at 2.75 percent while the prime lending rate is 4.5 percent.

Lotto 6-49: Wednesday 7, 9, 33, 35, 45 and 47; bonus 36. (Feb. 1) 1, 5, 29, 43, 44 and 48; bonus 16.

Regional briefs

Power was expected to be restored throughout New Brunswick this weekend after a severe ice storm a week ago. More than 60,000 houses and businesses were without power in what New Brunswick officials said was the worst storm in the utility's history. Most outages were caused by ice-covered trees and branches crashing onto power lines.

There has been progress in weeklong talks aimed at resolving the Canada-U.S. softwood lumber dispute that has cost thousands of jobs in Western Canada. Grant Aldonas, U.S. Commerce Department undersecretary for international trade, said he was impressed with the seriousness Canadian representatives demonstrated in Washington, D.C. He predicted a resolution within weeks.

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