Harper, Dion exchange barbs on economy

Wed Sep 17, 2008 1:17pm EDT
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By David Ljunggren

OTTAWA (Reuters) - Prime Minister Stephen Harper and his chief rival in the country's election campaign accused each other on Wednesday of favoring ruinous economic policies at a time when the global slowdown is worsening.

Two opinion polls released on Wednesday showed the Conservatives, who only have a minority of seats in the federal Parliament, could be on track to win a majority on Oct 14.

The official opposition Liberals, who have had trouble engaging voters, are proposing a carbon tax to cut emissions of greenhouse gases. Harper says the idea is a disaster.

"If you look at the tens of billions of dollars of announcements they are making, the only way these can be financed are not simply through big increases in taxes ... but it would mean deficits, and large deficits," he said.

Canada ran major budget deficits in the 1980s and 1990s and the idea of going into the red again has become unthinkable for any major political party.

Harper, vowing that "our government will not preside over disastrous financial policies," said the country had to stay the course as the world economy weakened.

"The way to get through this is keep our taxes down, keep our budget balanced and make affordable investments in things that will actually create jobs," he told a news conference in Welland, Ontario.

Liberal leader Stephane Dion pointed out that when his party lost power in early 2006, it handed over a booming economy and a budget surplus of C$12 billion ($11 billion) to Harper.   Continued...

<p>Canada's Prime Minister Stephen Harper delivers his speech during a campaign rally at St. Volodymyr Cultural Centre in Oakville September 16, 2008. REUTERS/Mike Cassese</p>