Premiers bring pricey wish list for budget, hope it's not too late

OTTAWA - Premiers arrived Thursday in Ottawa with multibillion-dollar prescriptions to cure the country's ailing economy, hoping they're not too late to influence the coming federal budget.

A senior federal official insisted that the Jan. 27 budget is still a work in progress with plenty of time to take into account premiers' demands for massive new investments in infrastructure and skills training, enriched employment insurance and more aid for struggling industries.

But in a call last Friday for bids to print the budget, the government offered a surprisingly precise page count for an unfinished work - 292 pages in English and 328 pages in French. The tender noted that the number of pages "is not finalized at this time" and could vary by 15 per cent.

Nevertheless, a senior government official insisted that Prime Minister Stephen Harper's all-day meeting with premiers Friday is a real pre-budget negotiation, not simply a public-relations exercise.

"We are getting down to the point of making final decisions and crafting the budget," the official, speaking on background, told a news media briefing Thursday.

The official said the first ministers' meeting wouldn't be a genuine consultation "if we simply brought premiers together and told them what we've decided."

While federal budgets are normally ready to go weeks in advance, Saskatchewan Premier Brad Wall suggested that rapidly shifting economic conditions this year make it more feasible to provide last-minute input.

"I'm taking the federal government at their word that it's not too late, that we're in an unprecedented budgeting situation where things still can be influenced, notwithstanding printing deadlines and the fact that the budget's right around the corner," Wall said on his way into a meeting with fellow premiers.

The first ministers' gathering is the culmination of weeks of behind-the-scenes federal-provincial consultations.

Satisfying the premiers is a crucial step in ensuring a favourable reaction to the budget, on which the fate of Harper's minority government rests. The opposition Liberals are threatening to defeat the government and pursue a coalition agreement with the NDP and Bloc Quebecois if the budget doesn't do enough to stimulate the economy.

A senior government official indicated Thursday that the budget could contain up to about $40 billion in stimulus measures.

"This is where the numbers seem to be right now," said the official, speaking on condition of anonymity.

"The deficit may be up to $40 billion due to the stimulus package."

Regardless of the content of the budget, Wall, a staunch ally of the federal Tories, urged opposition parties to back down, arguing that "the last thing we need is political instability right now."

It was a message repeated Thursday by Ontario's Liberal premier, Dalton McGuinty.

While most premiers appeared willing to co-operate with the federal government, there were signs of dissent, particularly from Quebec Premier Jean Charest, whose populace is most receptive to the idea of replacing the Harper government with a coalition.

Charest slammed the federal government for unilaterally deciding to cap the rate of growth in equalization payments to have-not provinces - a complaint echoed by Prince Edward Island's Robert Ghiz. Charest all but accused Harper of breaking his word that Ottawa won't try to weather the recession by cutting transfers to the provinces.

Charest also accused the federal government of failing to do its share to revive the economy, leaving the burden on provinces.

"We have done about as much as we can do in our areas of jurisdiction to support our workers, our industry and make credit accessible to businesses," he said of the provinces.

While Quebec has pledged to spend $72 billion over 10 years on infrastructure projects, Charest said the federal government has anted up only $2 billion over seven years for his province.

The premiers huddled for a couple of hours before heading into a dinner meeting with Harper and the leaders of five national aboriginal organizations.

Charest, speaking on behalf of all premiers, said they finalized two long-sought agreements that will help knock down barriers to inter-provincial trade and labour mobility. While the agreements had been in the works for several years, Charest said the global economic crisis made it evident that premiers needed to expedite matters.

The first ministers are to meet all day Friday, starting with an update on the fragile state of the flagging economy from Mark Carney, governor of the Bank of Canada.

They'll then be briefed by a series of federal ministers - Finance Minister Jim Flaherty, Human Resources Minister Diane Finley and Transport Minister John Baird - on the key issues premiers want to see addressed: strengthening the economy, bolstering employment insurance and skills training and investing in job-creating infrastructure projects.

Accelerating and bolstering spending on infrastructure tops everyone's list of measures needed to jump start the economy and shield Canada from the worst of the global financial meltdown.

Premiers got some backing Thursday from Canada's mayors, who say they've got more than 1,000 municipal infrastructure projects ready to go immediately, provided the feds ante up $13.7 billion.

Premiers agreed with the mayors one of the main federal infrastructure programs - the Building Canada Fund - has become bogged down in red tape. But they didn't necessarily buy into the mayors' prescription, to funnel all federal infrastructure money in future through the gas-tax fund that goes directly to municipalities.

There was consensus among premiers that all projects should be subject to only one environmental assessment, rather than subjected to lengthy and duplicative federal, provincial and municipal processes. Premiers argued that one provincial assessment is all that's necessary in most cases.

Charest and Manitoba's Gary Doer bristled at suggestions that federal assessments are necessary to ensure national environmental standards.

"I'm always fascinated by the question whether there'll be national norms," said Charest. "As though the people in Quebec or Manitoba cared less about the environment than some bureaucrat in Ottawa?"