Liberal Leader Stephane Dion trumpeted his party's track record of sound fiscal management Monday as he officially unveiled the Grits' platform, but the Conservatives tried to cast doubt on his budget calculations.
The heart of the Liberal platform remains the Green Shift carbon emissions plan, which Dion says will keep Canada's economy healthy in the face of rising fuel prices.
"We need to stop penalizing people for their hard work and shift the tax to pollution," Dion told CTV's Mike Duffy Live on Monday.
"We have a big problem -- climate change is putting the future of our children at risk. If we're able to tax productivity less and tax pollution instead, this is good for the economy and good for the environment."
According to Dion, the plan would result in lost revenue of only $90 million over four years, but would result in new funding sources worth $40 billion thanks to carbon taxes.
Dion stressed that every cent of the $40 billion would be returned to Canadians in the form of tax breaks.
Other highlights include a 10 per cent income tax reduction and a $10,000 refundable tax benefit for families who want to make their homes more energy efficient.
Earlier, Dion told reporters that a "Liberal government will never put Canada into deficit. Period."
He said his party will earmark a contingency fund totalling $3 billion a year in case of an economic downturn.
"Fiscal discipline is now part of the Liberal DNA," he said.
"We were the party that turned a huge deficit into eight years of surpluses, and we will continue to put fiscal responsibility first."
The platform also pledges to drop corporate taxes to 14 per cent over the next five years and to slash the current 31.5 per cent tax rate on income trusts. Instead, the Liberals would bring in a refundable, 10 per cent tax on income trusts.
Conservative candidate John Baird said changing the tax rate on income trusts would likely cost the government much of its revenue, and asked for "clarification" on the proposal.
"On page 65 of their platform, it appears as though the Liberals calculate that they would gain $1 billion in additional revenues by cutting taxes on income trusts," said Baird.
"How can you raise a $1 billion for reinstating a tax exemption? This looks like a $1-billion hole in Mr. Dion's financial scheme."
With Dion's party slumping in most opinion polls, he hopes the platform's release will inject some much-needed jump into the campaign.
The latest Strategic Counsel poll, conducted for CTV and The Globe and Mail, showed the Liberals trailing the Conservatives in several key battlegrounds in B.C., Ontario and Quebec.
The platform targets urban voters with promises to improve transit, roads and bridges, and aims to shore up political support in Ontario with a plan to create a $1-billion fund dedicated to aiding Canada's struggling manufacturing sector.
Dion also attacked the Conservatives for having a "right-wing agenda" and promised to "boost" funding for students and to restore cuts made to arts and culture funding.
At other points in his speech, Dion likened the policies of Stephen Harper's Conservatives to those of U.S. President George Bush.
"To me, the Americans are an ally, not a model," he said.
The platform also plans to restore the Kelowna Accord, an initiative created by the previous Liberal government in 2005 to improve conditions in aboriginal communities.
Earlier Monday, Conservative Leader Stephen Harper announced tougher laws for young offenders, but Dion dismissed those and pledged to tackle the route causes of crime through rehabilitation and poverty reduction.
However, CTV's Ottawa Bureau Chief Robert Fife said the Liberals, who plan to add an additional $16.3 billion in new spending over four years, may not be able to pay for the platform right away in the event of an economic downturn.
He also reported that they based their platform on seven-month old revenue projections.
Dion, speaking on Mike Duffy Live, said the Liberals would be able to slowly phase in their plan if Canada's economy hits a downturn, but it would still be accomplished in four years.
Liberal Finance Critic John McCallum said the Liberals, with the $3 billion contingency fund, have a "much better" insurance policy than the Conservatives in the event of a slowdown.
With files from The Canadian Press
