Canada opposition signs deal to defeat government

OTTAWA (Reuters) - The leaders of Canada's three opposition parties said on Monday they have written to the Governor General, Canada's head of state, asking her to call on Liberal leader Stephane Dion to form a new government.

The Liberals, New Democrats and Bloc Quebecois said in a statement they have lost confidence in the current minority Conservative government of Stephen Harper and have reached an agreement to create a coalition government.

"Mr. Harper I would ask you to accept this graciously," New Democratic Party leader Jack Layton said in French in a joint appearance in Ottawa with Dion and Gilles Duceppe, leader of the separatist Bloc Quebecois.

The Bloc Quebecois, which will not formally be part of the new government, has agreed to support it in key votes until June 30, 2010. The agreement between the Liberals and the NDP to form a coalition government lasts until June 30, 2011.

The three parties began formally negotiating to unseat Harper last week after the Conservatives released a fiscal update plan that the opposition complained did not include measures to stimulate the weakening Canadian economy.

"Since the recent federal election, it has become clear that the government headed by Prime Minister Stephen Harper has no plan, no competence and no will to effectively address this (economic) crisis," the parties said in a letter to Governor General Michaelle Jean.

Dion said the proposed coalition government will push a plan to actively stimulate the economy for the next two years and will provide aid to the auto and forestry industries and to the housing sector.

They also pledged to return to budget surpluses within four years. Officials have said previously the proposed government plans to introduce a new budget by Jan 27, 2009.

The parties plan to vote next week on a bill that will say the House of Commons has lost confidence in Harper, which would force him to ask the Governor General to either call a new election or allow the opposition to form a government.