Liberals promise balanced budget, tax cuts

Mon Sep 22, 2008 11:29pm EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada's opposition Liberals, trying to stave off defeat in the Oct 14 election, promised on Monday to cut taxes and boost social spending if they won power, and vowed the federal budget would stay in surplus.

Polls show the ruling Conservatives are on track to retain power, and perhaps even translate their minority government into a majority in the House of Commons.

The centerpiece of the Liberals' four-year plan is a carbon tax designed to cut emissions of greenhouse gases, coupled with income tax cuts that the party pegs at up to 10 percent for many Canadians.

The Liberals also promise to cut both the corporate tax rate and the small business tax rate.

Conservative Prime Minister Stephen Harper says the carbon tax could drive the country into recession, especially as the U.S. slowdown is already hurting the domestic economy.

But Liberal leader Stephane Dion said the government would continue to balance the books and would bring back a C$3 billion ($2.9 billion) contingency reserve that could be used to pay down debt if it is not used.

"We don't need any lessons from Stephen Harper on how to manage the economy," he told a news conference to unveil the party's campaign platform, noting that it was a previous Liberal government that had eliminated a C$42 billion deficit inherited from the Conservatives in 1993.

Dion, a former federal environment minister, plans to impose an immediate levy of C$10 a tonne of greenhouse gas emissions, increasing this by C$10 a year until the price hits C$40 a tonne. This would not apply to the price of gasoline.   Continued...