Budget and stimulus package taking shape

Rumours and possibly facts regarding the content of the upcoming federal Budget are starting to show up in the news.

Industry Minister Tony Clement has come out this weekend saying he expects the White House to come forward with a rescue plan very shortly, despite the main bailout plan being stuck in the American Senate.

The White House could use some of its own financial resources to give out a rescue package to the ailing automotive industry. It has come out last week saying that it may dip into the US$700 billion bank bailout fund to help the auto sector.

"The Bush administration has made it pretty clear that they think that a rescue is necessary to save the entire industry, to keep the economy from going further into troubled waters in the United States," he said during his Question Period appearance on Sunday.

"So I expect over the next few days the U.S. administration to cross some t's and dot some i's," he added.

This means that a made-in-Canada bailout plan may soon follow North of the border, earmarked last week at $3.3 billion, which is likely to put Canada in a deficit position.

Shipbuilding stimulus considered

Defence Minister Peter MacKay has spoken out about the upcoming federal Budget saying that his department might be involved in part of the economic stimulus plan the government in considering.

The Department of Defence is expected to implement a continuous shipbuilding program. If announced through the coming budget, the money would come from already planned purchases.

…the plan hinges on the country's shipbuilders and trade unions setting aside their differences and sharing the billions of dollars worth of work, says Defence Minister Peter MacKay.

"There is enough work for the Canadian shipyards on both coasts and in Quebec to keep people employed, and to keep that sector of the economy going full-tilt," MacKay said in an interview with The Canadian Press.

"I see this as being in keeping with economic stimulus and getting people to work. And there's enough work in these projects to get all of these shipyards humming again."

Infrastructure spending red tape reduction

This field of federal spending was already touted by Prime Minister Harper as one of the areas that would help pull Canada’s slowing economy out of the gutter.

Yesterday, Transport Minister John Baird announced a series of consultation meetings with provincial and municipal counterparts to accelerate project spending within the $33 billion Building Canada Fund. The main focus of these discussions will be to find the best means of removing administrative red tape that lie in the way of approving these projects.

Flaherty meets Liberal members

And this morning, Finance Minister Jim Flaherty is scheduled to meet Liberal MPs Scott Brison and John McCallum to discuss his budget plan. Of course, the opposition members are showing some reservations about the meeting.

This morning, Brison told CBC News that the Liberals need the government to present its real figures, notwithstanding revenues from Crown assets yet to be sold, in order to give a clear picture of Canada’s economic situation.

"If Minister Flaherty and if Prime Minister [Stephen] Harper are actually interested in having an honest discussion about stimulus ideas, they have to be prepared to be honest about the fiscal situation," said Brison.

He also reiterated the Liberal demands expected in the budget in order to support it, including investments in infrastructure, industries, housing and training.

"We want to see meaningful stimulus that not only helps Canadians get through this economic downturn but builds a more competitive and productive Canadian economy in the future as we move back into a period of recovery."

Flaherty is expected to meet with NDP Finance critic Thomas Mulcair in coming days. These informal meetings are replacing the usual budgetary consultations that would have taken place at the House of Commons Finance committee.