Liberals will support Tory budget: Dion

The Opposition Liberals will not defeat the federal government in a confidence vote over the budget, Liberal Leader Stéphane Dion said Tuesday.

Finance Minister Jim Flaherty brought down a budget in Parliament earlier that was short on big spending pledges, but one he called "prudent" while facing the prospect of a slowing economy.

Dion called it a "grab bag" that accomplishes little but goes in the "general direction" the Liberals had sought in recent months in areas such as investment in infrastructure, policing, public transport and making the gas tax permanent.

"Under the circumstances, I don't see enough in this budget that would justify that we precipitate an election that Canadians do not want for now," Dion told reporters about a half-hour after Flaherty introduced the budget in the House of Commons.

The Liberal caucus will meet Wednesday to decide whether to abstain or vote in favour of the budget.

Budget 'fails' working families: Layton

The NDP and Bloc Québécois said they could not accept the federal budget and will vote against it in a confidence motion slated for March 5.

"It's a budget that clearly fails the working families of Canada," NDP Leader Jack Layton said outside Parliament.

Layton said taxpayers are paying more of the costs of government while corporations are paying less.

There is nothing in the budget for the training of much-needed doctors, for helping families pay for prescription drugs or for affordable housing, he said.

Bloc Québécois Leader Gilles Duceppe said the budget won't help the hard-hit manufacturing industry or forestry workers of Quebec.

"We're against this budget," Duceppe told reporters.

Prime Minister Stephen Harper requires the support of at least one opposition party to pass the budget and prevent his minority Conservative government's defeat.

The budget does include specific measures sought by environmental groups, such as a price on carbon emissions or a form of carbon tax. It also cancels a rebate on fuel-efficient vehicles, which was introduced just last year.  

Liberal House leader Ralph Goodale dismissed any suggestion that the Liberals were not being good environmental stewards by supporting the budget, saying the Liberals would be judged on what they put through.

"Our position will be judged on the merit of Liberal ideas, not on what the Conservatives may or not have borrowed from us," he said.

'Missed opportunity': Ontario's Duncan

Meanwhile, Ontario Finance Minister Dwight Duncan lambasted the federal budget for failing to address the problems facing his province's struggling automotive and manufacturing sectors, as well as critical infrastructure improvements.

"I think I would describe this as a missed opportunity for governments to partner," Duncan told the CBC's Don Newman on Tuesday. "There's not a lot in this budget. It's pretty thin gruel, as I see it."

Duncan noted that the province's sheer size means these issues also affect the entire country.

He said the automotive sector will see only a very small amount of help in the additional commitment of $50 million a year over five years.

But the "biggest disappointment" is the lack of meaningful investment in public infrastructure, Duncan said, citing the $195 million over two years included in the budget.

Duncan also criticized the lack of changes to employment insurance that his provincial Liberals had called for. He said Ontarians who lose their jobs receive $4,000 less in employment insurance benefits than workers in other provinces.

'Good day' for municipalities

While parties and provinces squabble over Flaherty's budget, Canada's cities and towns will be happy with what the plan provides, said Gord Steeves, president of the Federation of Canadian Municipalities.

Steeves said he is pleased that the budget makes the gas tax transfers to municipalities permanent and also promises $400 million for policing and $500 million for public transit projects.

"Frankly, we didn't expect anything on this budget on the issue of transit," Steeves told CBC News on Tuesday.

"We were hoping for the issue of permanency on the gas tax, but the $500 million was money that wasn't expected, and I think I can probably say it's very, very welcome. I think on behalf of all municipalities, it will be very well used."