Flaherty consults with finance ministers on budget

The provincial and territorial finance ministers will be chewing over some tough economic problems with their federal counterpart in a dinner meeting Tuesday night in Saskatoon ahead of the Conservative government's budget next month.

The summit in Saskatoon, which will continue on Wednesday with formal talks, is part of Finance Minister Jim Flaherty's series of pre-budget consultations.

With Canada teetering on a recession amid a global economic crisis, the provinces and territories are urging Ottawa to speed up investment in infrastructure to stimulate the economy.

When he announced the meetings in the wake of the fierce backlash against the Conservatives' fall economic statement, Flaherty said he was "open to innovative new ideas that would help shape the plan for economic recovery in the 2009 budget."

The provincial ministers have indicated they will enter the summit with a willingness to co-operate, although it is unlikely Flaherty will be able to please everyone — including the federal opposition parties, who have threatened to topple Prime Minister Stephen Harper's minority government.

The ministers' meetings come as a report prepared for the Ontario government and released Tuesday predicted Canada would lose 582,000 jobs within five years if the Big Three Detroit automakers completely shut down.  

Last Friday, the federal government and Ontario reached a deal to offer $3.3 billion in aid to the country's auto industry, contingent on the approval of a proposed $14-billion US bailout package in Washington.

Alberta supports auto bailout

Ahead of the meetings, Alberta Finance Minister Iris Evans said her province supports a Canadian auto bailout package.

"It's a huge and critical problem when any part of Canada is hurting financially. When they are losing jobs somewhere else, it hurts in Alberta as well," she said.

Ontario Finance Minister Dwight Duncan said he was gratified by what he has heard from many other provinces about the proposed auto aid.

"A number of my provincial counterparts called me on the weekend to express their satisfaction with this," he said.

"I've sensed what I would call a great deal of empathy from my provincial counterparts."

Saskatchewan Finance Minister Rod Gantefoer, the host of the meeting, said he'll be pushing his colleagues to demand Ottawa increase and accelerate infrastructure spending.

"We have as a government long believed that one of the fundamental things that we can do to stimulate and to support a growing economy is to invest in infrastructure, and we certainly think that is as important today as it was in our very first budget," he said ahead of Tuesday's dinner.

But Gantefoer added that if the federal government intervenes to help the auto sector in Ontario, he expects the same kind of support for his province's vulnerable industries, including forestry and livestock.

Earlier Tuesday, the Conference Board of Canada recommended that Ottawa devote $10 billion to $13 billion to stimulus, spending that it says will create a $20-billion federal deficit.