Danny Williams admits a $1,000 baby bonus will not solely turn around Newfoundland and Labrador's slumping population. ((CBC))

A controversial plan to pay new parents in Newfoundland and Labrador parents is being misinterpreted, according to Progressive Conservative Leader Danny Williams.

Williams, campaigning for re-election in the Oct. 9 provincial election, said the proposed plan — which includes a $1,000 payment to parents for every newborn and adopted baby — is only part of a broader package aimed at helping families and stopping a declining population.

"I don't think for a moment that $1,000 will propel people to have babies or cover the cost of raising a child," Williams said during a campaign stop Tuesday at a St. John's child-care training centre.

Reaction to the so-called baby bonus has been mixed, with some even calling the plan insulting.

Williams, who raised eyebrows last week when he used the phrase "a dying race" to describe the province's declining population, pointed to other planks in the Tory platform, including increased day-care spaces and a top-up to employment insurance benefits for people on parental leave.

Williams, however, defended the $1,000 payment as a valuable contribution to families.

"I think people have kind of taken that one initiative and in a cute, jocular kind of way try to make some fun with it," he said.

"But this is serious business. The fact [is] that we in this province need to grow, and we need to get the population back to where it was."

In its most recent estimate, Statistics Canada pegged Newfoundland and Labrador's population at 506,548. Last year, it reported that, for the first time,the number of deathsexceeded the number of live births.

Opposing parties have been sharply critical of the PC plan.

"You can offer [and] put that incentive out there to encourage people to have families, but all of our young people are leaving to go to the mainland," Liberal Leader Gerry Reid said.

"If they are serious about this $1,000 per baby and if people go ahead and have those babies, already we don't have enough child-care spaces," said New Democratic Leader Lorraine Michael.