The Liberals have tabled a confidence motion to trigger an election, with a vote likely set for Thursday, but NDP Leader Jack Layton says his party will continue to support the Conservative government.
That means there is little chance the government will fall; the Liberals need the support of both the NDP and Bloc Quebecois to bring down the Tories.
The confidence motion came hours after after Prime Minister Stephen Harper touted his government's record on the economy in Saint John, N.B.
Harper said Ottawa had already committed 90 per cent of the stimulus funding for this fiscal year, giving the green light to some 7,500 infrastructure and housing projects. More than 4,000 of these projects have started during the first six months of the two-year plan.
"Our efforts are starting to bear fruit. We see stabilization and the early beginning of a recovery," Harper said.
But during Question Period in the House of Commons, Liberal Leader Michael Ignatieff disputed Harper's claims about how much stimulus money has been doled out.
"If you ask all the premiers and mayors around the country they will answer that this is not the case. It is false," Ignatieff said in French. "We know now that only 12 per cent of the projects are now underway. Why is this information being given then? How can Canadians believe this report that came out today?"
Ignatieff also criticized the government for a January promise to create 190,000 jobs, when 450,000 jobs have been lost.
"Mr. Speaker this dog won't hunt," Ignatieff said. "When will Canadians be able to trust a government that doesn't tell the truth?"
Transportation Minister John Baird disputed Ignatieff's claims.
"Infrastructure projects are being tendered, contracts are being issued, shovels are in the ground, engineers, architects are at work," Baird said. "We're working hard with the provinces, with the territories, and with the municipalities in every corner of this country to get the job done."
Meanwhile, Layton continued his calls for employment insurance reform, saying the economic downturn continues to impact thousands of Canadian families.
"We're pleased that the government has finally brought forward $1 billion of extra help for the unemployed, but we have to look for the next step here," Layton said. "We still have 800,000 people out of work who can't get help from the EI system. What is the government proposing to do about that, the real economic crisis?"
Baird responded by saying the Conservatives will continue to work on EI reform if the opposition parties continue to support the government.
'Not out of the woods'
Harper warned against an election, saying Canada needed stability as it emerged from a worldwide recession.
He said Canada has a solid, long-term fiscal position, which allowed the government to bring in "one of the largest stimulus packages in the G7 and to do so while retaining the lowest debt and deficit levels."
But he stressed that Canada "was not out of the woods yet."
"Far too many Canadians are still out of work, too many families are suffering hardship, and just as Canada was dragged into the global recession through no fault of our own, our recovery could be derailed by events beyond our borders," Harper said.
The prime minister said Canada must stay the course with the government's Economic Action Plan to ensure recovery. And Harper suggested that an "unnecessary and wasteful election" could derail plans for recovery.
"That is why it is crucial that we continue to implement our action plan, that we continue to stay the course," he said.
The government agreed to provide frequent updates on the economy when it cut a deal with the Liberals to avoid an election last January.
With files from The Canadian Press
