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Timeline

The lost two months

From economic statement to budget by way of crisis

From Monday's Globe and Mail

NOVEMBER 27, 2008

As national governments around the world scramble to assemble bailouts and economic stimulus packages, the Harper government releases an annual update that forecasts a tiny budget surplus in the next fiscal year. It proposes to ban public-sector strikes and end public subsidies for political parties. Opposition parties threaten to force a new election.

NOVEMBER 28

The Liberals under Stéphane Dion serve notice of a motion of no-confidence and consider forming a coalition government with the NDP. Prime Minister Harper delays the confidence vote until Dec. 8.

NOVEMBER 29

Tories reverse the decision to cancel political subsidies and release a recording of an NDP conference call in which Leader Jack Layton refers to earlier discussions with the Bloc Québécois to topple the government.

NOVEMBER 30

The Harper government announces it will move its next budget up to Jan. 27 and drops the plan to ban strikes by public-sector workers.

DECEMBER 1

The U.S. National Bureau of Economic Research officially declares that the U.S. is in recession.

Liberal, New Democratic and Bloc Québécois parties sign deal to bring down the minority government. They call on the Governor-General to allow their coalition to form the government if the Conservatives fall on Dec. 8.

DECEMBER 3

Mr. Harper uses a televised address to explain that he is asking the Governor-General to prorogue Parliament, arguing that the coalition government would be illegitimate, given that it would need the separatist Bloc Québécois's support. Other leaders present their defences of the proposed coalition.

DECEMBER 4

Governor-General Michaëlle Jean agrees to Mr. Harper's request to suspend Parliament until Jan. 26, so the government can avoid the confidence vote.

DECEMBER 5

Statistics Canada says the economy shed 71,000 jobs in November, the largest monthly loss since 1982.

On the same day, U.S. unemployment figures show a loss of 533,000 jobs in November, a 34-year high.

DECEMBER 10

Liberals pick Michael Ignatieff to replace Stéphane Dion as leader.

DECEMBER 17

Finance Minister Jim Flaherty predicts for first time that the economy will contract and Canada will run a budget deficit next fiscal year - the first deficit in 12 years.

JANUARY 20, 2009

Mr. Ignatieff says he is trying to cool tempers ahead of the budget, but is still prepared to topple the Conservatives if the budget fails to meet expectations.

JANUARY 21

The parliamentary budget officer estimated a 2009-10 deficit of $13-billion, excluding any stimulus measures.

JANUARY 22

The Bank of Canada forecasts that economic output will shrink 4.8 per cent this quarter, and 1.2 per cent in 2009.

JANUARY 23

A senior government official tells reporters the government will post $64-billion in deficits over the next two fiscal years. Cabinet ministers begin announcing billions of dollars worth of the coming budget's economic measures.

Research by Marjan Farahbaksh

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