STEVEN CHASE , BRIAN LAGHI , JANE TABER and GLORIA GALLOWAY - OTTAWA — Prime Minister Stephen is trying to buy time and stave off a possible defeat by opposition parties by announcing the government will delay any confidence votes on the controversial economic update for one week.
The vote will occur Dec. 8, Mr. Harper said in the foyer of the House of Commons Friday evening.
"While we have been working on the economy, the opposition has been working on a backroom deal to take power without the consent of voters," he said.
"Stéphane Dion does not have the right to take power without an election."
The Liberals responded immediately, with MP John McCallum saying they were seeking to replace Mr. Harper's minority with a coaltion government because the Conservatives failed to offer an economic stimulus package when the rest of the world had done so.
Mr. McCallum also sought to assure Canada's banking sector that a Liberal-led coaltion would not jeopardize the fnaincial system, but rather safeguard it.
Earlier, the Liberals laid out a potential plan to bring down the Harper government by putting forward a motion they could use to defeat the Conservatives on Monday, their opposition day, and replace them with a coalition made up of themselves and the NDP.
The threat was so real that Rideau Hall said Governor-General Michaëlle Jean had made contingency plans to return to Canada from a European tour if necessary.
The Liberals presented four possible motions, one of which said the opposition "has lost confidence in this government, and is of the opinion that a viable alternative government can be formed within the present House of Commons."
The motion said the government failed to recognize the seriousness of Canada's economic situation and has not credibly presented a plan to stimulate the economy. The Liberals are also deeply angry about a proposal that would eliminate the program that provides political parties operating funds based on the number of votes they receive in federal elections.
Representatives of the Liberals, NDP and the Bloc Québécois were deep in discussions Friday aimed at cobbling together a coalition should the government be defeated.
NDP sources said party veteran Ed Broadbent held talks Thursday with former Liberal prime minister Jean Chrétien about how a coalition between their two parties could work.
This is a situation "the Tories have brought on themselves with their economic statement," Mr. Broadbent told CTV News on Friday morning. "I heard business groups this morning, they are unhappy with it. All the opposition parties are unhappy with it. So there is no question that serious discussions are going on."
By noon, however, there were indications the federal Tories had begun looking for ways to avoid a showdown.
Sources told The Globe and Mail that senior Tories have reached out to members of opposition parties in an effort to find out what compromise might be possible. It's the first sign the Tories are nervous that their economic package, which so incensed the opposition, needs to be altered in some way so as to avoid the government being toppled.
It remains by no means clear what the Tories would do to ameliorate the situation, nor what the opposition needs to drop its opposition to the package.
Nothing has been ruled out on the coalition front, one New Democrat said, contradicting reports that NDP Leader Jack Layton would not participate in a coalition government with Mr. Dion as prime minister.
That rumour must have come from the camps of one of the Liberal leadership contenders, not from the NDP, the source said, adding that every thing is on the table — including bringing in Liberal House Leader Ralph Goodale to be prime minister.
The co-operation of the Bloc would be required for any Liberal-NDP coalition to function.
Bloc representatives laughed when asked Friday if members of their party were taking part in the negotiations. But both the NDP and the Liberals said the move to unseat the Conservatives and Prime Minister Stephen Harper is being driven by all opposition parties.
"The three opposition parties agree on more things than they disagree upon," one NDP MP said, echoing the sentiments of Liberal party workers.
Another New Democrat said there is much enthusiasm within the party for finding a way to bring down the Tories — enthusiasm that was heightened by Conservative proposals to end government subsidies to political parties for every vote they earn.
But it is the lack of movement on the economic front that both New Democrats and Liberals cited as the real impetus behind the decision to hold coalition talks. And neither party, they said, would be willing to back down unless the Conservatives do something dramatic in terms of economic stimulus — specifically help for the auto sector — over the next few days.
For their part, the Tories remained publicly defiant. Defence Minister Peter MacKay told The Chronicle Herald that the opposition will blink. "When they play chicken, they wind up looking up like chickens," he said.
Speaking on CTV News, Kory Tenycke, the Prime Minister's director of communication, criticized what he described as a Liberal bid "to take power through the back door, along with the support of the separatists and the NDP."
Much of the opposition negotiation is likely to centre on who will lead the Liberal Party and whether the NDP will be given cabinet seats.
Although a coalition government might not serve the ambitions of Liberal leadership contenders Michael Ignatieff, Bob Rae and Dominic Leblanc, party members said there are ways around those concerns. One Liberal MP suggested there could be an agreement in which Mr. Dion would step aside at a specified time and allow the winner of the leadership contest to take his place.
For his part, Mr. Rae began trying to organize a common front Friday morning among his rivals and Mr. Dion in response to a possible Tory defeat Monday. His supporters are calling what the Harper government is trying to do through its fiscal update an "assault on the Liberal Party."
Mr. Rae is attempting to keep all of the elements of the party on track and together, fighting the Tories, by proposing this united response.
First, Mr. Rae's priority is to work with the other leadership candidates and Mr. Dion to put together a joint approach forcing the Tories to back down on their decision to stop public financing of political parties, according to a senior Rae official.
His campaign manager, Jonathan Goldbloom, has been calling his counterparts in the other camps this morning. Mr. Rae is now on his way to Vancouver.
Second, if the Tories refuse to back down, Mr. Rae is asking that a voting strategy be prepared and Liberals are apprised of every nuance of the votes that will proceed on the fiscal update.
Third, he wants a joint approach to what happens if the Liberals are called upon to form a government; what happens if they have to fight an election; and how would the leadership issue be resolved?
"Mr. Rae wants each aspect to be worked through in sequence from front to back," the official said.
"What he wants to do is bring together Dion and the other candidates and forge swiftly what is going to be a rolling common approach," the official said. "And the logic behind that is that right now Harper's one chance of getting that bill through is an opposition in disarray with everyone running around chasing their tail. … Everyone has to get together and face outward and fight the common foe."