Days after the provincial government announced $69 million in financial aid for workers and communities hit by a slowdown in the forestry industry, the John Horgan government is on the defensive as the lifeline was only made possible by taking money from other programs.

Of the $69-million package, $25 million will come from suspending the Rural Dividend Fund. It's a program meant to help small communities with a population of 25,000 or less to diversify their economies or create more activity.

Williams Lake Mayor Walt Cobb said he was blindsided by the news.

"We can't wait another two years to get our water treatment plant started and planned and get it in place so we don't have to boil our water, not good enough," he said at a news conference called by the Liberals to demand re-instatement of the fund.

Cobb told CTV News said along with the Williams Lake Indian Band, the city had applied for funding, only to learn in a letter that the program was being suspended. A mayor circulated what they said was a copy of the letter on social media. 

After several paragraphs, the letter mentions the money was being yanked -- something the government failed to mention at the original news conference.

At an announcement regarding innovation in forestry, the premier defended the decision.

"The $25 million in the rural development fund is going toward rural communities to keep people home and not to dissipate throughout the province," John Horgan said.

Horgan went on to say with uncertainty looming in global markets due to anticipated or present slowdowns in other countries, the focus was on balancing B.C.'s books but also making sure the funding was targeting those who needed it most.

"Turns out it's a phony transition fund, because it's just stealing from another pocket," said Liberal Opposition Leader Andrew Wilkinson.

Last week, the province announced help for the ailing forestry industry, which has shed thousands of jobs in the past few months.

Forests Minister Doug Donaldson has said market pressures and inaction from the previous government are partly to blame for the situation.

"The applications they made are still in the hopper for future funding cycles," said Donaldson.

Lumby's mayor says in his community, 63 desperately needed childcare spots are vanishing because of an expected $500,000 from the Rural Development Fund.

Kevin Acton noted the group thought the funding was coming through in about eight weeks.

"That director is getting phone calls from parents that are crying who are going to lose their jobs for a lack of daycare," he said.

There's another, and more immediate, challenge ahead for the NDP government: on Wednesday, truckers frustrated with lost work in the forestry industry will stage a rally from Williams Lake to Vancouver.