Tories will cut excise tax on diesel fuel in half: Harper

A newly elected Conservative government would cut in half the excise tax on diesel fuel, a move that would "benefit consumers who buy virtually anything that moves by truck, train, ship or plane," party leader Stephen Harper said on Tuesday.

PM 'offering back the money he's stolen': Liberal MP

Conservative Party Leader Stephen Harper answers questions at a news conference during a campaign stop at a vegetable processing plant in Winnipeg on Tuesday. ((Tom Hanson/Canadian Press))
A newly elected Conservative government would cut in half the excise tax on diesel fuel, a move that would "benefit consumers who buy virtually anything that moves by truck, train, ship or plane," party leader Stephen Harper said on Tuesday.

The reduction to two cents a litre from four cents is "modest, affordable and responds to real needs," Harper said during an appearance at a Winnipeg produce-shipping terminal, in his first major funding announcement of the federal election campaign.

"At a time when Canadians are concerned about affordability and energy prices are rising, we should do what we can to lower prices," Harper said. "This has to be done."

Harper's proposed cut is also aimed at truckers, fishermen and manufacturers who have expressed concern that Liberal Leader Stéphane Dion's Green Shift carbon tax plan could lead to an increase in the already high cost of diesel.

Harper's announcement a 'gimmick': Dion

Dion called Harper's proposed tax cut "a gimmick" that will make no real difference for Canadians and undermine the country's ability to switch to cleaner renewable sources of energy.

"When it comes to facing the challenge of the climate change crisis, Mr. Harper is going in the opposite direction from the international community and every responsible leader," Dion said.

Last week, Dion announced new proposed measures, worth a total of $900 million, aimed at helping farmers, fishermen and truckers adapt to his party's carbon plan.

Dan McTeague, the Liberal incumbent for the Ontario riding of Pickering-Scarborough East, said the Conservatives' proposed tax cut was "deceptive" because it does not take into account a massive windfall the government received from GST on fuel purchases as energy prices skyrocketed over the past seven months.

"He's in effect offering back the money he's stolen from the truckers and consumers," McTeague said. "What he's offering is not only a pittance, it's a cruel joke."

McTeague has long called for increased awareness of how speculation in crude oil stocks can lead to consumers getting burned at the pumps.

He said previous Liberal governments twice offered GST rebates to Canadians, in 2001 and 2005, to offset high energy prices, while the Tories have allowed energy companies to narrow the supply to maximize their profits.

NDP Leader Jack Layton, campaigning in Saskatchewan, said he wants to see the excise tax spent on infrastructure and new energy technologies, with one full cent of the tax given to municipalities.

He also said his party forced committee hearings in Parliament over energy companies raising prices for fuel, while Harper stood idle on the issue.

"We've called for action on the gouging for many, many months, and he simply dismissed it," Layton told reporters. "All of a sudden, it's 'Road to Damascus,' and he's decided he's going to make an announcement in the middle of an election campaign."

Liberal plan 'based on theory': Harper

Dion has said the Liberals' environmental plan, which would balance a carbon tax with income-tax cuts, already includes a rural tax credit and incentives for businesses to upgrade to greener and more fuel-efficient equipment.

The Tories have lambasted Dion's proposal, saying a carbon tax would be devastating for the country's weakened economy, would kill jobs and would drive up the cost of living.

Harper the diesel-tax cut highlights the choice between the parties' two different plans in the face of uncertain economic times.

"Our plan is practical; theirs is based on theory," he said. "That's what the election is all about."

But McTeague fired back, saying the Liberal's Green Shift plan calls for the re-establishment of a federal fuel-price monitoring agency to "give transparency to a dysfunctional industry that is fleecing the public with the help of the prime minister."

"His plan is that there is no plan," McTeague said of Harper.

Later Tuesday in Toronto, Harper promised to place the recognition of foreign skills credentials for immigrants on the agenda of the next first ministers' conference.

He also pledged to reinstate veterans' benefits for people living in Canada for more than 10 years who fought with the Allies in the Second World War.