September 17, 2008 / 5:16 PM / in 9 years

Harper, Dion exchange barbs on economy

<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>

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.

Since then the crucial manufacturing sector has shed 180,000 jobs. The surplus is also much smaller.

“Stephen Harper has allowed our economy to hit a brick wall ... we are close to a deficit and close to a recession,” Dion told reporters in London, Ontario.

“One of the big problems we have in Canada is Stephen Harper ... (His) record is clear -- economic growth down, productivity down, inflation up, job losses up. But most important, when it comes to the prime minister himself -- credibility down, competence down.”

Despite Dion’s arguments, the Liberals are on track for their worst defeat in 24 years. A major problem for Dion, who is from the French-speaking province of Quebec, is that his English is heavily accented and sometimes hard to understand for English-speaking Canadians.

A former academic, he has also been unable to impose his will on a fractious, disorganized party. The only plane the Liberals could find for the campaign was an aging Boeing B-737 and it was forced to make an unscheduled landing late on Tuesday after a generator failed.

Although Harper again said he did not think his party would win a majority, the polls tell a different story.

A Segma survey for Montreal’s La Presse newspaper put the Conservatives on 42 percent support, compared with just 23 percent for the Liberals, which would translate into a massive election win for Harper.

An Ekos poll put the Conservatives ahead by 38 points to 24 for the Liberals, who also have the challenge of competing with two other parties for the centrist and left-leaning vote.

One of those parties, the Greens, released their platform on Wednesday and proposed to levy a heavy annual carbon tax on fossil fuels as part of a plan to shift taxation from income to consumption.

($1=$1.08 Canadian)

Additional reporting by Randall Palmer; Editing by Peter Galloway

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