Liberals say no to tax hikes to cut deficit

Wed Sep 2, 2009 4:37pm EDT
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SUDBURY, Ontario (Reuters) - Canadian Liberal leader Michael Ignatieff, seeking to quell criticism for opening the door to tax hikes, said on Wednesday he would not raise taxes to slay the budget deficit if he became prime minister.

Ignatieff says he will soon introduce a motion of non-confidence in the minority Conservative government of Prime Minister Stephen Harper, in part because it has allowed the deficit to grow to more than C$50 billion ($45 billion).

"We are very concerned about the size of the deficit ... We will not come to the Canadian public with proposals that break the bank," Ignatieff told a news conference after a meeting of Liberal legislators.

"We've inherited a C$50 billion hole from Mr. Harper. We will clean it up without raising taxes."

In April he had said no honest politician faced with a huge deficit would take anything off the table because Canadians were allergic to structural budget deficits -- a remark the governing Conservatives pounced on as pointing to tax hikes.

Ignatieff also said Canada should go ahead and introduce a cap-and-trade system to fight climate change without waiting for U.S. President Barack Obama to present his plan.

"We're not going to wait for Mr. Obama. That's the current excuse of the Canadian government," he said. "I have great respect for Mr. Obama but Canadian climate change policy gets made in Canada."

However, he also said that was needed was a "continental cap-and-trade" system -- which would imply working with the Obama administration in coming up with a unified system.

A cap-and-trade system would cap carbon emissions that are blamed for global warming and then allow for trading of permits to emit carbon.

($1=$1.10 Canadian)

(Reporting by Randall Palmer in Sudbury and David Ljunggren in Ottawa; editing by Janet Guttsman)

<p>Liberal leader Michael Ignatieff speaks during a news conference following the conclusion of the Liberal caucus summer retreat in Sudbury, Ontario September 2, 2009. REUTERS/Chris Wattie</p>