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Flaherty to offer election-killing olive branch to NDP in the budget

OTTAWA -- The governing Conservatives hope to hold off a spring election by offering incentives to the NDP in the federal budget, sources suggest.

A government source says the minority Tories will reintroduce the home-energy retrofit program at a cost of $400 million a year.

The government is also prepared to forgive some loans for doctors and nurses who work in rural areas.

Both are key demands made by the New Democrats as the cost for their support of the budget.

The Harper government needs the support of just one opposition party to survive a budget confidence vote.

And it appears the government's got the money to pay for such vote-winning incentives.

Economists who met with Jim Flaherty earlier this month say the finance minister likely has about $3 billion in extra revenues this year to pay for additional spending.

The Bloc Quebecois has demanded $2.2 billion for Quebec to harmonize its sales tax.

But Flaherty says an agreement on that front won't be in place any time soon.

Any respite from defeat the Tories may get over the budget might be short-lived.

The Liberals — who say they'll vote against the economic package — are preparing to bring in a non-confidence motion against the government by week's end.

That motion would seek to condemn the government for alleged ethical lapses and abuse of power and would also lead to an election if passed in the Commons.

Flaherty offered few budget clues at a made-for-TV fitting of twice-resoled shoes Monday in step with the frugal, stay-the-course messaging of the Conservative government.

The budget will contain some new spending for families and to help create jobs, he said, but the focus remains on eliminating the deficit by the appointed fiscal year 2015-16.

"One of the goals of the budget is to make sure we stay on course, maintain the fiscal track that we set out in the fall update and move back to a balanced budget, and at the same time make some investments to promote economic growth, jobs," he explained.

The list of spending could include:

Help for seniors without benefit of a pension, likely through a boost to the guaranteed income supplement.

A tax credit for parents who enrol their children in artistic activities.

A two-year extension of a program helping firms buy efficiency-enhancing machinery and equipment.

Modest measures on pension reform and on financial literacy.

The sources said veterans will get help to transition into civilian life through a new apprenticeship program in the construction industry.

And at least two research bodies will get money -- $50 million for the Perimeter Institute for Theoretical Physics in Waterloo and $4 million for the Thunder Bay Regional Research Institute.

The remote health-care initiative will forgive up to $40,000 in student loans for new doctors, and $20,000 for nurses, who provide health care in sparsely-populated areas of Canada.

But with the opposition parties pounding on election drums, none of the measures may see the light of day or even get to a vote in the House.

Flaherty has passed an extraordinary five budgets in a row as a minority finance minister. He's counting on a sixth.

"I hope we vote on it. I hope it’s passed. There are some very good measures in the budget," Flaherty said.

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