Liberal Leader Stéphane Dion pitched his controversial proposal to tax carbon emissions, despite warnings from his own caucus that such a policy would be politically risky.

Liberal Leader Stephane Dion speaks in Toronto on Thursday. (Adrian Wyld/Canadian Press)

Dion laid out the broad goals of his plan in a speech Thursday to the Canadian Club in Toronto, saying Canadians are ready to accept tax changes to fight climate change.

He revealed few details, saying only it would involve shifting taxes toward things Canadians want less of: pollution, greenhouse gas emissions, smog and waste.

"We need to make polluters pay and put every single penny back in the hands of Canadians through the right tax cuts," Dion said.

"The time has come for Canadians to pay less tax on good things, such as work, savings and investment. The time has come to put the price on waste and pollution. The time has come to do what is right, not what is easy."

Some Liberal strategists have warned Dion that his plan could be portrayed negatively as a tax grab and will also lead to higher prices at the pump.

"Mr. Dion is interested in a massive punitive increase in gasoline taxes in Canada," Finance Minister Jim Flaherty said. "That's the last thing Canadians need."

But Dion rebuffed his critics, saying "Canadians have been ahead of their politicians in knowing what needs to be done to move this country forward."

He also cautioned that "Conservatives will try to confuse, mislead and scare Canadians" about the issue.

Full proposal expected next month

Dion later told reporters that convincing voters of his plan could take time.

"It's a complex issue, it's not simple, but people are not simplistic. They know they are in a world that needs to change," he said.

Dion is expected to reveal his full proposal next month.

John Williamson, of the Canadian Tax Federation, told CBC News that a carbon tax will not deal with the problems of greenhouse gasses. He said in Europe, for example, where carbon taxes have been implemented, emissions continue to rise.

"What we see with these carbon taxes — squeezing the family budget and no real reduction in terms of CO2.

"CO2 reduction is going to happen through technology and improvements on that side, not by making Canadians poorer."

With files from the Canadian Press