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Liberal Leader Michael Ignatieff told a news conference in Ottawa that his party would support the federal budget with strict conditions. ((Tom Hanson/Canadian Press))

The Liberal party will only support the minority Conservative government's federal budget if Prime Minister Stephen Harper agrees to an amendment calling for a "clear marker" of regular updates to Parliament on the impact of economic stimulus projects, Liberal Leader Michael Ignatieff said  Wednesday.

The move by Ignatieff appears to have staved off the immediate defeat of the Tories. Hours after Ignatieff's news conference, Tory House Leader Jay Hill said the government has no problem with the amendment.

"The government will be supporting the Liberal amendment to the budget," Hill told reporters. "We're very pleased as well the Liberals have decided to support our budget. We look forward to working co-operatively with them."

Text of the proposed Liberal amendment to the government's budget motion

That the motion be amended by changing the period to a comma and adding the following:

"on condition that the government table reports in Parliament no later than five sitting days before the last allotted day in each of the supply periods ending March 26, 2009, June 23, 2009, and Dec. 10, 2009, 

(a) to provide ongoing economic and fiscal updates;

(b) to detail the actual implementation of the budget;

(c) to itemize the actual effects of the budget with respect to the protection of the most vulnerable in Canadian society, the minimizing of existing job losses, the creation of the employment opportunities of tomorrow, the provision of economic stimulus in a manner fair to all regions of Canada, and the assurance that the government's deficit is not a burden to future generations or a detriment to economic recovery and finally;

(d) to provide details on any adjustments or new measures as may be required to benefit the Canadian economy."

Ignatieff's amendment proposal immediately sparked recriminations from other opposition party leaders. They accused Ignatieff of betraying the principles of a Liberal-NDP coalition agreement he endorsed less than two months ago.

Speaking to reporters from the National Press Theatre in Ottawa, Ignatieff lambasted the Harper government's record in handling the current economic crisis and said the Opposition will be "watching like hawks" to ensure the "investments Canadians need actually reach them."

"We are putting this government on probation," Ignatieff said. "For their failure to plan and act as a government, we hold them responsible."

The amendment, which Ignatieff presented as a motion on Wednesday afternoon during budget debate in the House of Commons, will require regular reports to Parliament on the budget's implementation and costs, to be delivered in March, June and December of this year.

Each report would be an opportunity for the opposition to express confidence in the government, he said.

"We've put down a very clear marker. This government has to get the money out the door," the Liberal leader said.

"If this government fails to meet these targets, it will not survive for long."

During Wednesday's question period in the House of Commons, Ignatieff called upon Harper to recognize the need for a "better framework" to ensure the funds are distributed promptly. 

"How will Canadians have the assurance they need that the infrastructure funds announced in this budget actually reach the communities in need?" he told the House.

Harper did not mention the Liberal amendment, but replied he would like to see the measures included in the budget implemented as quickly as possible.

"With the co-operation of this Parliament, we can pass the measures to make that spending more effective and more quick in the future," the prime minister said.

A vote on the Liberal motion to amend the budget could come as early as Monday, the CBC's Margo McDiarmid reported from Ottawa.

No 'credible plan' for getting out of deficit, Liberal chief says

Finance Minister Jim Flaherty has not yet commented on whether he's willing to change elements of the budget.

Flaherty's budget promises billions of dollars in new spending — ranging from money for infrastructure projects to aid for worker training and cash for more EI benefits — to help the country ride out the economic downturn.

But it also projects a total of $85 billion in deficits by the spring of 2013.

Despite limiting his demands solely to the economic updates, Ignatieff decried a number of the budget's "flaws."

He said the document doesn't go far enough to protect Canadians who have lost or will lose their jobs, fails to extend employment insurance eligibility and doesn't do enough to encourage green technologies.

Flaherty's plan, Ignatieff charged, also opens the door for attacks on pay equity for women and provides no new child care spaces.

In addition, the budget lacks a "credible plan" for getting Canada out of the $85-billion deficit over the next five years and attaches strings to infrastructure dollars that may delay projects and job creation, he said.

Ignatieff 'propping up' Tories as Dion did: NDP leader

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NDP Leader Jack Layton responds to questions on Wednesday in Ottawa over Liberal Leader Michael Ignatieff's decision to support the budget, with conditions. ((Tom Hanson/Canadian Press))

With the NDP and the Bloc Québécois set to vote against the government, the Conservatives require the support of Ignatieff's Liberals to ensure the budget passes and prevent a Liberal-NDP coalition from seeking to form a government with the support of the Bloc — or another election.

Speaking shortly after Ignatieff, NDP Leader Jack Layton said Ignatieff instead has chosen to follow the path of his predecessor, Stéphane Dion, in "propping up" the Harper government.

"You cannot do that and pretend to be the alternative to Mr. Harper," Layton told reporters outside the House of Commons.

Layton refused to specify whether the coalition between the Liberals and NDP was dead, saying only that: "We have a new coalition on Parliament Hill. It’s a coalition between Mr. Harper and Mr. Ignatieff."

Ignatieff denied his decision signalled the Liberal-NDP coalition's demise, saying the deal did "extraordinary work" in forcing a "reckless" prime minister to back down from partisan measures that were not in the national interest.

"It has shown that we can work together," he said. "Canadians need to get used to the idea that we can work together."

Coalition 'dead': Bloc leader

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Bloc Québécois Leader Gilles Duceppe calls the Liberal amendment a 'smokescreen.' ((Sean Kilpatrick/Canadian Press))

While Ignatieff said he hadn't spoken to Layton on Wednesday, the Liberal leader wouldn't rule out the possibility of a future coalition.

"I won't exclude any hypotheses ," he said "A coalition that has done this good work may also still have opportunities to serve the national interest."

Bloc Leader Gilles Duceppe mocked Ignatieff for waiting until a day after the budget was introduced to announce his decision, while also ridiculing the Liberal amendment as a "smokescreen."

He said the Liberal leader is "turning his back on what he wrote" in the coalition agreement and "serving the interests of the rest of Canada and Ontario" by backing the Conservative budget.

"There is no more coalition today, very clearly," Duceppe told reporters outside the House. "It's dead. It's over. It's finished."

Duceppe added he'd be "very, very, very, very surprised" if the Tories reject the Liberal amendment.

Ready to listen, Flaherty says

Interviewed Wednesday morning at a doughnut shop in his hometown of Whitby, Ont., before Ignatieff's speech, the finance minister said he was in the dark about what budget changes, if any, the Liberals might demand.

"If there are useful suggestions from opposition parties, of course we will look at them," he told CBC News. "That's normal in a time of serious economic recession."

But he also said he "certainly would not look at changing the focus of the document.

"We care about people, we're doing the EI amendments, we're going to retrain people. We're going to invest in infrastructure, we're going to take care of the important sectors of our economy that need taking care of and we're going to protect access to financing," Flaherty said.

"None of that's going to change."

With files from the Canadian Press