Canadian PM Harper attacks carbon tax proposal

Wed May 21, 2008 3:07pm EDT
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By Louise Egan

OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper slammed on Wednesday his political opponent's proposal for a carbon tax to reduce greenhouse gas emissions, calling it a "foolish" move at a time of soaring energy prices.

Harper, a Conservative, told reporters that he sees gasoline and other energy prices continuing to rise over the next few years due to demand from emerging economies such as China and India and because the world is using low-cost hydrocarbons "more quickly than most people are aware."

"What governments shouldn't do is jump in and actually increase the taxes on these products, which as you know is what my opposition is proposing to do," he said, referring to Liberal leader Stephane Dion.

Dion, who won the leadership of the Liberal Party 17 months ago on a green platform, is considering imposing a carbon tax on energy costs and then returning some of the money through income tax cuts.

Last week, Dion rejected the idea of a new tax on gasoline but said he was considering either a carbon tax or a cap-and-trade system, whereby big polluters are given greenhouse gas emission limits and have to buy the right to emit more.

"We think that is a foolish and unnecessary policy that's being proposed by our opposition," Harper said, speaking at a farm in Beamsville, Ontario, after announcing new food labeling regulations.

Harper ruled out spending increases to counter the fallout from the U.S. economic downturn.

"We don't want to panic. Now is not the time to start spending like drunken sailors, to start running massive deficits, to start raising carbon taxes all over the economy because somebody thinks they should do something."   Continued...

<p>Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa May 14, 2008. REUTERS/Chris Wattie</p>