'Prudent' Liberal platform merges economy, environment: Dion

Harper blasts Liberals' planned reversal of income trust tax

Last Updated: Monday, September 22, 2008 | 2:30 PM ET

CBC News

Liberal Leader Stéphane Dion on Monday released his party's campaign platform, which includes the much-discussed Green Shift plan, a pledge to reduce the tax on income trusts and a proposed $3-billion-a-year contingency fund to protect Canada from global economic uncertainty.

Liberal Leader Stéphane Dion holds up his policy book as he unveils his party's platform at a news conference in Ottawa on Monday. (Ryan Remiorz/Canadian Press)Speaking in Ottawa, Dion called the plan a "fully costed and prudent" proposal created under the Liberal tradition of fiscal discipline to face a potential global economic slowdown.

The platform, entitled A Richer, Fairer, Greener Canada, includes a full costing for the Green Shift, which calls for income tax cuts paid for by taxing carbon fuels, as well as other Liberal campaign pledges on health care, education and a massive 10-year, $70-billion proposal to improve Canada's infrastructure.

The Conservatives were quick to attack the plan on Monday, saying it would cost too much.

But Dion said the plan, which will be implemented over four years, would bring together the economy and the environment, decrease Canada's dependency on fossil fuels, and tap into the talents and skills of all Canadians.

"This is the plan we need to have a prosperous and sustainable economy for everyone," said Dion, alongside Liberal finance critic John McCallum, and former leadership rivals Bob Rae and Scott Brison.

"A Liberal government will never put Canada into deficit. Period. We will build a richer Canada by cutting taxes for all Canadian families and businesses, making them more competitive."

Dion said it would be "law of the land" that every penny of the $40 billion raised in the Green Shift's carbon taxes would be returned to Canadians in the form of tax breaks. Most people would see their income taxes drop by 10 per cent, Dion said.

He noted that the plan would cost the federal treasury just $90 million in lost revenue over four years and would not force the Liberals to raise the GST or cancel the childcare money program launched by the Conservative government.

Dion said his plan doesn't call for a bonanza of spending, but instead $16 billion over four years on programs for childcare, infrastructure, manufacturing and drug coverage. The Liberals say they will accomplish their plan while running at least $3 billion in annual surpluses.

"It's fully costed, it's prudent, it will be done with the ability to raise money without having to raise taxes," Dion said.

Highlights in the platform include:

• Introducing an immediate 10-per-cent tax on income trusts that will replace the 31.5 per-cent tax introduced by the Conservatives, which is to go into effect in 2011.
• Cutting the bottom income-tax rate to 13.5 per cent from 15. The two middle tax rates would also be reduced by a percentage point.
• Lowering the small business tax rate to 10 per cent from 11.
• Shaving $12 billion off total government spending over four years.
• Giving $10,000 in refundable tax benefits to Canadian families for investments in energy-saving home retrofits.
• Creating a $350 refundable child tax credit.
• Increasing the Guaranteed Income Supplement for seniors by $600 a year for low-income seniors.
• Restoring the Kelowna Accord to improve the health care, education and quality of life for aboriginal Canadians.

McCallum said the platform was based on economic projections from the Conservatives' last budget, but was a "much better insurance policy" than the Harper government's "irresponsible" reduction of federal surpluses.

"The Liberal government will not take the country into deficit, full stop," he said.

The plan calls for a federal contingency fund of $12 billion over four years, an element Dion called a "buffer" that would represent only one per cent of the government's annual budget.

"It's only good management," Dion said of the reserve. "Any company in the private sector is doing this."

'If this were a CEO, the board would fire him'

Conservative Leader Stephen Harper speaks to reporters on Monday during a campaign announcement in Ottawa. (CBC)

But Conservative Leader Stephen Harper, speaking at a campaign rally Monday in Dryden, Ont., said the Liberal platform is nothing more than "a work of political and economic incompetence."

He said Dion is on track to drive the government into deficit.

"Friends, if this were a CEO, the board would fire him for this kind of financial plan," Harper said. "Better just not hire him to begin with."

Environment Minister John Baird also went on the attack, saying the Liberal platform is full of holes.

"His plan does not add up," Baird said. "It by no means is revenue neutral and taxpayers will be stuck with deficit spending, higher taxes, or worse yet, both."

Baird said the plan contains $39 billion in promises that either are entirely missing or that have been undercosted and would result in over $50 billion in new debt over the next four years. He said the carbon tax would result in an extra $40 billion in taxes, while providing only about $26 billion in tax cuts.

"That's a $14 billion tax grab that will hit Canadian families hard," he said.

But analysts say the plan does add up.

"It adds up, we've checked it a couple of different ways," said Michael McCracken, a founder of Informetrica Limited, a Canadian-based economic research and information company.

"But if the economy sours, then they're going to have to come out with a budget, and the budget is going to have to address the sour economy, not an election platform."

Layton: Canadians recall past Liberal pledges

Dion said Canadians will look at his party's record and remember that previous Liberal governments balanced budgets and eliminated deficits left by the Mulroney Tories.

"We are the party that brought … eight consecutive balanced budgets," he said. "We have no lessons to receive from the Conservatives."

But NDP Leader Jack Layton said Canadians don't have confidence in Liberal promises during elections.

Layton cited the Liberals' reversals on past pledges such as implementing the North American Free Trade Agreement, eliminating the GST, as well as failing to deliver on repeated promises to create a national child-care system.

"We're used to that approach of the Liberals of promising things and then ignoring them after an election," Layton told reporters during a campaign stop in Hamilton.

"What's new about this election is they'll make a promise, and then mid-election say it's not a promise and then come back to it later."

The Liberals' platform release comes amid a new poll suggesting continued lacklustre support for the party ahead of the Oct. 14 federal election.

A Canadian Press/Harris-Decima survey, in partnership with the CBC, was taken over the last four days and puts the Tories at 38 per cent support — down one percentage point — while the Liberals remained at 23 per cent.

The Liberals have dropped five percentage points in the last week, according to the four-day rolling poll, which is based on interviews with 1,223 people Thursday through Sunday, with a margin of error of 2.7 per cent, 19 times in 20.

The poll has the NDP steady at 17 per cent support, with the Green party up one point to 12 per cent, and the Bloc Québécois down a point at eight per cent.