Liberals outline carbon tax plan

Thu Jun 19, 2008 1:47pm EDT
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By Randall Palmer and David Ljunggren

OTTAWA (Reuters) - The Liberal Party took a bold political gamble on Thursday by proposing a raft of new carbon taxes at a time when energy prices are at record highs.

Under the plan, which Liberal leader Stephane Dion is likely to make a central plank in his next election campaign, taxes would go up on fuel oil, diesel, natural gas, coal and jet fuel -- and indirectly on some electricity.

The taxes, designed to cut consumption of fossil fuels and improve the environment, would then get passed back through cuts in personal and corporate income tax.

The Liberals, who trail the ruling Conservatives in opinion polls, say the new taxes raised by the "Green Shift" should raise C$15.3 billion ($15.1 billion) in the fourth year.

"Our plan will be good for the environment and good for the economy, good for the planet and good for the wallet," Dion said in a speech to cheering supporters. "The polluters will pay and Canadians will gain."

The minority Conservative government dismissed the plan as "crazy" and accused Dion of breaking his word, noting he had said last year "There will be no carbon tax" if he won power.

"I changed my mind and my thinking evolved," Dion later told a news conference.

Prime Minister Stephen Harper said it was "nonsense" to claim a carbon tax would not push up the price of gasoline.   Continued...

<p>Liberal leader Stephane Dion speaks during Question Period in the House of Commons on Parliament Hill in Ottawa June 5, 2008. REUTERS/Chris Wattie</p>