Flaherty refuses to extend stimulus deadline for laggards

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Ottawa is resisting provincial calls to extend the March deadline for shutting down billions in federal stimulus spending, insisting projects that are well behind schedule will be cut off.

The firm stand - outlined publicly by Finance Minister Jim Flaherty - follows discussions with ministers from Quebec, where concern over delays is highest. Ontario Premier Dalton McGuinty also escalated the debate this week with a call to extend the deadline into another construction season.

But Mr. Flaherty told reporters Tuesday that all sides agreed to the deadline and an extension for laggard projects simply wouldn't be fair.

"We don't want to be unfair to those who play by the rules, and most have played by the rules," said Mr. Flaherty following an appearance before the House of Commons finance committee. He insisted the deadline will not be a "large problem," and repeated Ottawa's position that it will be "fair and reasonable" in situations where projects are nearly complete.

Ottawa set the deadline in the 2009 budget - which unveiled a large-scale attempt to ease the worst of the recession through public deficit spending - as a way of ensuring the stimulus cash went into the economy when it was needed most. The vast majority of infrastructure projects are widely expected to be completed on time. However, even if a small percentage are delayed, that could add up to hundreds of projects across the country.

Until now, the government declined to speculate on what it would do should construction projects fall far behind the deadline.

The minister's comments are the clearest indication yet that some provinces and municipalities could be on the hook for Ottawa's share of roads, sewers and other construction projects that were slow to begin.

Earlier this week, Ontario's Premier Dalton McGuinty warned that 166 projects are at risk of missing the deadline. While that total is less than 2 per cent of the total number of stimulus projects in the province, Mr. McGuinty said those projects will create jobs and Ottawa's deadline should be extended.

Mr. Flaherty discussed the deadline issue recently with Quebec Finance Minister Raymond Bachand.

"We're doing everything we can to finish projects on time," said Catherine Poulin, press secretary to Mr. Bachand. Ms. Poulin said some projects are at risk of missing the deadline and that the province has asked for an extension, although she did not have exact numbers.