The Canada Report

Budget may wait until Chretien leaves

Jean Chretien insists he will stay on as prime minister until February but there are signals he might have to retire sooner.

That's because Finance Minister John Manley said he will delay planning the next federal budget until Chretien, 67, retires.

The next budget must be designed under Paul Martin, former finance minister, who is expected to win the Liberal leadership in November and take over as prime minister once Chretien leaves, he said.

Under the Canadian parliamentary system, the ruling party selects its leader, who becomes prime minister. The leader has the option of retiring or resigning before an election is held.

Manley said it's the responsibility of the Martin team, and not the current prime minister, to review economic results when they're announced this fall and to use them for planning the budget that is usually released in February.

As a longtime Chretien loyalist, Manley gave the clearest sign yet the prime minister's influence within his own government has dramatically shifted to Martin.

Hundreds of families have lost their homes to forest fires raging in British Columbia.

With the hot, dry conditions continuing, Premier Gordon Campbell extended the provincewide state of emergency and banned camping on government land in the southern third of the province.

The Okanagan Mountain Park fire is the worst of the more than 750 blazes. It forced 30,000 people from their homes in Kelowna for up to a week and destroyed 230 houses.

Now fire crews are trying to keep flames from reaching Cranbook where 200 residents have been forced to flee. The uncontrolled Lamb Creek blaze has consumed much of the mountainous forest to the southwest of the city.

Firefighters reported progress with major fires burning north and east of Kamloops that had previously forced thousands to leave the area.

- A tainted-meat scare is the latest burden facing the Ontario government, as opposition politicians say the public should have been warned of the potential health hazard months ago. The government has suspended the license of Aylmer Meat Packers, alleging the company was illegally butchering already dead or condemned animals in off-hours when inspectors weren't working. Federal authorities issued a province-wide recall of beef products from the plant.

- Canada's economy shrank by 0.1 percent in the second quarter, pushed down by the SARS outbreak in Toronto, the mad cow scare in Alberta and a stronger dollar. Statistics Canada said this was the first quarterly contraction since the third quarter of 2001, which was an echo of the terrorist attacks in the United States.

- Montreal and Toronto might be linked by high-speed rail that would extend to Windsor, Ontario, at the border with Detroit and to Quebec City. Transport Minister David Collenette said "there's a lot of support" for the $3-billion project. Train travel at 120 mph would cut the Montreal-Toronto trip by 90 minutes, to three hours. The government is also spending $53-million to improve the Trans-Canada Highway between Quebec and Atlantic Canada.

Canada's dollar gained some strength over the past week to 72.10 U.S. cents while a U.S. dollar dropped to $1.3869 Canadian, before bank exchange fees.

The Bank of Canada is expected to lower its key interest rate of 3 percent by up to 0.5 percent Tuesday. The prime lending rate is steady at 4.75 percent.

Canadian stock exchanges were higher Friday with the Toronto index at 7,532 points and the Canadian Venture Exchange, 1,311 points.

Lotto 6-49: (Wednesday) 7, 14, 20, 23, 38, 46; bonus 32. (Aug. 23) 2, 6, 19, 27, 35, 47; bonus 1.

- Western Canadian farmers are taking another hit as Canada lost a major trade ruling on wheat exports to the United States. The U.S. Commerce Department ruled that Canadian durum wheat and hard red spring wheat shipments are subsidized and being dumped in the United States. Duties of 14.16 percent should be imposed on hard red grain wheat and 13.55 percent on durum wheat, the ruling said.

- As people prepared to head to campgrounds and golf courses for the last long weekend of summer, Saskatchewan health officials issued a West Nile virus alert because of a new cluster of human cases. The province has 26 new probable and confirmed human cases, increasing its total to 69, by far the most of any province. Infected mosquitoes spread the virus.

- A driver narrowly escaped injury in the collapse of the Meteghan River bridge in Nova Scotia. It was the ninth bridge collapse in the province in three years. The wooden span is to be replaced with a two-lane panel bridge by early November. The bridge was inspected nine months ago and found to be safe.

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