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Canada's new government set to survive first test

Written by: Staff

OTTAWA, Apr 5 (Reuters) Canada's new minority Conservative government outlined plans to cut the unpopular federal sales tax and crack down on crime, and won qualified support from two opposition parties.

The backing should be enough to ensure Prime Minister Stephen Harper stays in power and does not face an almost instant election. Canadian governments with a minority of seats in Parliament tend to last about 18 months, and Harper was elected only in January.

In a short speech that reiterated promises made during the election campaign, the Conservatives pledged to deliver ''fiscally responsible budgets,'' give money to parents for child care, and work with the 10 provinces to guarantee health care would be delivered in a reasonable time.

They said they would push ahead with a campaign promise to cut the federal goods and services tax to 6 percent from 7 percent -- with a cut to 5 per cent targeted for further down the road -- and to tackle government corruption.

''Leading change in a minority Parliament means working together,'' the government yesterday said in a policy speech that acknowledged the problems faced by a minority government.

Harper controls only 125 of the 308 seats in Parliament and cannot pass his major policy planks without support from at least some of the three opposition parties.

''If the speech stays like this, we're prepared to give the government a chance and vote for (the speech),'' Bloc Quebecois leader Gilles Duceppe told reporters after the speech.

A second opposition party, the New Democrats, also praised the speech for identifying several priority issues such as electoral reform and the environment they had pushed.

''We're encouraged that Mr Harper appears to have taken some of our concerns into account,'' NDP leader Jack Layton said. ''If Mr. Harper is serious about making this Parliament work, we will be open to working with him.'' NO APPETITE FOR NEW VOTE The opposition parties had already made it clear they were very unlikely to vote against the speech. Canada has had two elections in less than two years and there is no appetite among voters to go to the polls again.

The Conservatives were elected amid voter unease at corruption and misuse of government funds.

''The trust of citizens must be earned every day. The government will work to earn that trust,'' the speech said.

In a formality, the speech was read by Governor General Michaelle Jean, who represents Canada's head of state, Queen Elizabeth. But it reflects Conservative plans and was drafted by Harper.

The opposition will put forward amendments to the speech on Wednesday with votes scheduled for Thursday and next Monday.

The final vote on the speech is scheduled for April 24.

Duceppe said Harper was easier to work with than his Liberal predecessor, Paul Martin, whose own Speech from the Throne was nearly defeated by the opposition parties shortly after the June 2004 election.

The Conservatives also promised to help provinces meet their financial needs and to let the government of French-speaking Quebec play a role in UNESCO -- both key demands of the independence-minded Bloc Quebecois.

It pledged to submit significant international treaties to Parliament for a vote.

TD Securities strategist Eric Lascelles noted the briefer-than-usual speech made no mention of dividend tax cuts or a Conservative campaign pledge to allow for the deferral of capital gains taxes.

Finance Minister Jim Flaherty has said the capital gains promise might not be fulfilled in his first budget, expected in late April or early May.

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