TORONTO - Federal NDP Leader Jack Layton wished people "Gung Hey Fat Choy" -- prosperity and wealth -- as he helped celebrate the Chinese New Year Sunday by handing out "lucky money" in Toronto's East Chinatown.

He was joined by Ontario New Democrat MPP Peter Tabuns, Councillor Paula Fletcher and Chinese Chamber of Commerce for East Toronto president Bernard Loh.

They walked from the Zhong Hua Men Archway to various shops, flanked by a pair of red and yellow Chinese lions which bobbed and danced along the sidewalk to a steady drum beat and clanging cymbals.

The celebration heralded the Year of the Rabbit, often considered a lucky sign according to Chinese horoscopes.

Layton, who is a tiger, not a rabbit, noted people born in the year of the rabbit are supposed to incarnate peace.

He said the world could use a little of that these days, especially in Egypt, where more than 100 people have died during protests to force President Hosni Mubarak to step down.

"Well, with what's going on in Egypt we're wishing for a peaceful transformation there," he said at the archway before the walk began.

"The sooner that Mubarak can move on, the will of the people for real democracy can be realized," he said.

Along the walk, the NDP leader shook hands and handed out red envelopes with a chocolate dollar inside to shopkeepers, hair salon workers and pedestrians.

"We got a Chinese New Year money gift," said software programmer Keith Ajmani, 39.

"We liked it. We think the little guy liked it the best," he said, smiling and gesturing to his toddler son Mason, who sat in the stroller in front of his four-month-old twin brothers Finley and Alexander.

Ajmani and Sherry Pedersen, 38, a human resources director, said they had heard of the celebration in years past but just happened to be walking down the street at the right time on Sunday.

"It's great to have this kind of cultural event in our neighbourhood," said Pedersen.

Outside many of the shops, one of the Chinese lions danced and bowed before the entrance to each business and ate lettuce, that was left hanging in the doorway by shopkeepers, before going inside.

It's considered good luck if the lion visits your door, said Chinese commerce chamber director Valerie Mah, who also took part in the walk.

The new year began on Thursday and brings with it 15 days of celebration, she said.

Tabuns said he was born in the year of the rabbit. He said that the Chinese New Year celebrations are always a lot of fun, but added he's especially excited when the year of the rabbit comes around.

"Absolutely. You have to wait 12 years for it to be your year."