OTTAWA - Stephen Harper's minority government has extended its lease on life, winning approval in principle Tuesday for a federal budget that will plunge the country into deep deficit.
The big-spending budget aimed at stimulating the flagging economy passed easily by a vote of 211-91, with NDP and Bloc Quebecois voting No.
Liberal MPs -- with the exception of six Newfoundlanders who were given a one-time pass to break party ranks -- supported the Tory budget despite deep misgivings.
Liberal Leader Michael Ignatieff chose not to risk forcing an election -- which his party is ill-prepared to fight and which Canadians don't want -- in the midst of an economic crisis.
However, Liberals warn they may defeat the budget in future should periodic progress reports show it's not working as intended. The reports, the first to be delivered in March, were demanded by Ignatieff as the price for his party's support.
The budget includes plans to spend $40 billion over two years on measures to kickstart the economy, including infrastructure, social housing, home retrofits, parks, tourism, railways and Arctic research. It also includes $2 billion in income tax cuts.
In the process, the budget projects the government will rack up towering deficits of $86 billion over five years -- the first time in 13 years that Canada has plunged into red ink.
Some economists doubt the stimulus package will revive the economy and many predict the deficits will be much bigger -- and last considerably longer -- than the government hopes.
Moreover, some Conservative militants are incensed that Harper has abandoned his conservative beliefs to secure Liberal support, after coming within a hair of being toppled over last November's stay-the-course fiscal update.
But while Harper has reversed himself on a number of fronts, he refused to budge on Ignatieff's request to postpone budget measures that could cost Newfoundland and Labrador as much as $1.6 billion over three years.
His flat refusal put Ignatieff's ability to control the fractious Liberal caucus to its first test.
Faced with a mini-revolt by at least four of his six Newfoundland MPs, Ignatieff decided to allow them to break ranks and register a protest vote against the budget.
"I decided to permit them in the budget vote tonight a one-time vote of protest to signal their displeasure -- and my displeasure -- at these unilateral actions which in my view weaken our federation, cause strains in our federation at a time when Canadians should be pulling together," Ignatieff announced prior to the vote.
The decision allows Ignatieff to avoid the dual daggers of disciplining his MPs and alienating Newfoundland voters.
However, it prompted sneers from the NDP and Bloc, who had wanted to defeat the Tories and pursue an agreement -- struck last November by Ignatieff's predecessor, Stephane Dion -- to form a coalition government.
Bloc Leader Gilles Duceppe said Ignatieff showed "a total lack of leadership." He questioned the double standard of allowing Newfoundland MPs to oppose the budget while forcing Quebec Liberals to support it even though their province has also objected to unilateral measures to cut its equalization payments.
NDP Leader Jack Layton said Newfoundlanders won't forget that Liberals allowed the budget to pass, no matter what damage it wreaks on their province.
"This little bit of window dressing isn't going to fool anybody," he predicted.
"I think (Newfoundlanders) will have good memories that they couldn't count on Mr. Ignatieff himself and the Liberal party to stand up for them."
However, Premier Danny Williams, who had called on Liberals to vote against the budget, hailed Ignatieff's decision.
"He shows real courage this early in his leadership to be making a move like that. The MPs are being allowed to do what they need to do on behalf of their province and I think the fact that a national leader recognizes that is very important."
Williams accused Harper of being divisive, a threat to national unity, and of pitting provinces against each other.
He also suggested that Harper is using the budget to retaliate for the "Anybody-But-Conservative" campaign Williams launched during last fall's federal election.
"I'm a big boy. I understand that if you give an elbow, you're going to get an elbow back. But you don't get hit over the head with a sledgehammer, and that's what this guy does," Williams said.
"The Conservative party has to dump Harper or otherwise they're going to find themselves back in a phone booth with a caucus of a couple of people."
Newfoundland's objection stems from a federal decision to cap the rate of growth of equalization payments to have-not provinces.
The province no longer collects equalization but Williams charges that the change in the equalization formula reduces related payments under the 1985 Atlantic Accord, which determines Newfoundland's share of offshore oil revenues.
Williams has pegged Newfoundland's loss at $1.5 billion over three years.
Ignatieff said a briefing for opposition MPs by federal finance officials Monday suggests the reduction might be more in the range of $1 billion.
