Fumbles, infighting and finally an infrastructure plan

Feb 24, 2009 | 05:31 AM |

Canada, much like its more-populous neighbor to the south, is betting big that public infrastructure spending will jolt its flat-lining economy back to life.

The ruling Conservative party has set aside Canadian $11.8 billion ($9.61 billion) to modernize bridges, roads and rail lines and improve water-treatment facilities. To help pay for the projects and other measures, it plans to run a budgetary deficit totaling nearly C$85 billion ($69.24 billion) over the next five years.

It's a remarkable about-face for the country's prime minister, Stephen Harper, who in the fall was still viewing the global economic crisis through rose-colored glasses and insisting that the government could continue to run budgetary surpluses.

As the world's major economies were skidding out of control, Harper in late November issued an update to the government's annual budget that offered little hope for new spending to stimulate the economy. It also outlined intentions for some controversial measures, such as suspending government workers' right to strike and—perhaps most notably—reducing public funding for political parties. Opposition groups rely on this funding more than the Conservatives, and the action sparked a political backlash.....