Harper vows to halve diesel, jet fuel tax

Tue Sep 9, 2008 6:19pm EDT
 
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WINNIPEG, Manitoba (Reuters) - Prime Minister Stephen Harper promised on Tuesday to slash taxes on diesel and aviation fuel if reelected, taking direct aim at his opponent's proposed carbon tax early in the first week of an election campaign.

Harper, who heads the Conservative Party, which has governed since January 2006, pledged to cut in half a federal excise tax on the fuels to 2 Canadian cents a liter (7 U.S. cents a U.S. gallon) from 4 Canadian cents over four years.

The plan would cost the government about C$600 million ($560 million) a year, Harper said during a campaign stop in Winnipeg.

He contrasted the tax cut with the Liberal Party's proposal for a carbon tax, which would increase the diesel tax by 7 Canadian cents a liter.

"On a policy level, the choice is a modest affordable reduction in the tax on diesel, or a massive carbon tax that will increase the cost of everything," Harper said in a statement.

The Liberal's so-called Green Shift is the central plank of that party's electoral platform. Liberal leader Stephane Dion has proposed the carbon tax to cut greenhouse gas emissions and has said he will use the money to cut income taxes and boost subsidies to the poor.

Harper's Conservatives have slammed the carbon tax as too risky in tough economic times.

($1=$1.07 Canadian)

(Reporting by Roberta Rampton; Writing by Louise Egan; Editing by Peter Galloway)