(Adds Flaherty, Mulcair, McCallum, paragraphs 5, 15, 17-18)
By Randall Palmer
OTTAWA, Nov 29 (Reuters) - Canada’s newly re-elected Conservatives made a major concession on Saturday in an effort to avoid being brought down, but opposition parties remained firm in their plan to oust the government.
Prime Minister Stephen Harper dropped a proposal to eliminate direct public subsidies for political parties, a move that had galvanized the three opposition groups to decide to topple his minority government and try to form a coalition government.
“We’re removing that from the table,” said Harper’s chief spokesman, Kory Teneycke.
Harper’s parliamentary secretary, Pierre Poilievre, also told the Canadian Broadcasting Corp the government would introduce a budget with a fiscal stimulus measure in little more than 30 days. Canadian budgets are normally in late February or early March.
Finance Minister Jim Flaherty scheduled an announcement on Sunday as the government sought to persuade the country it was combating the economic slowdown, the CBC reported.
It was so far not enough to dissuade the opposition, which is far advanced in its arrangements for a coalition and smells blood, excited by the possibility of replacing the Conservatives, even though they were re-elected with a strengthened mandate on Oct. 14.
The opposition is framing the debate as being about a failure by the government to introduce a major stimulus plan in the economic statement it delivered to Parliament on Thursday.
“(It) changes nothing. Talks are continuing (on forming a coalition),” said Mark Dunn, chief spokesman for Liberal leader Stephane Dion. “The issue has always been the economy and Harper’s failure to offer Canadians a plan to protect jobs, savings and mortgages.”
“He has lost the confidence of Parliament because of his inaction,” Dunn said.
Until the proposal to end party financing emerged, the Liberals had said it would be premature to bring down the government.
‘WE‘RE GOING TO DO IT’
Under the opposition plan, the Liberals and the leftist New Democratic Party would form a coalition with the backing of the separatist Bloc Quebecois, which is dedicated to the breakup of Canada.
All three are to the left of the Conservatives and prefer more government intervention in the economy.
Harper says the opposition is engaged in an undemocratic attempt to take power without facing the electorate, which awarded the Conservatives nearly half the seats in Parliament.
The opposition points out that when Harper was opposition leader in 2004, he alluded to the possibility of his taking over as prime minister in the event the then-Liberal government lost the confidence of Parliament.
“We’re going to go ahead. We’re going to do it,” Thomas Mulcair, deputy leader of the New Democrats, told Reuters during the annual Parliamentary Press Gallery dinner.
New Democratic Party spokesman Karl Belanger said coalition talks were continuing on Saturday evening and would proceed on Sunday.
John McCallum, economic chairman of the Liberal caucus in Parliament, said the issue was now one of distrust of the Conservatives. “The problem now is we can’t believe them. They’ll promise anything to survive.”
He added he did not believe the ultimate decision on bringing down the government would be made until the Liberals had all the information.
The opposition will have a chance to vote the Conservatives down on Dec. 8. If that happens, Governor-General Michaelle Jean -- the representative of Queen Elizabeth, the head of state -- will have to decide whether to call another election or to turn over power to a Liberal-led coalition. (Additional reporting by David Ljunggren, Louise Egan and Frank McGurty; Editing by Peter Cooney)