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Prime Minister Stephen Harper holds a news conference at a paper plant in Windsor, Que., on Jan. 6, 2011. (Graham Hughes/THE CANADIAN PRESS)
Prime Minister Stephen Harper holds a news conference at a paper plant in Windsor, Que., on Jan. 6, 2011. (Graham Hughes/THE CANADIAN PRESS)

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Tories draw line in election sand over corporate tax cuts Add to ...

Stephen Harper and his Conservatives are spoiling for an election fight with Michael Ignatieff over the controversial issue of tax breaks for big corporations.

In separate interviews Wednesday, both the Prime Minister and Finance Minister Jim Flaherty dared the Liberal Leader to keep campaigning on what they characterize as his policy of tax increases.

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Mr. Ignatieff has said the Liberals would not support the minority Tory government if it continues with its plan to cut the corporate tax rate while Canadians families are struggling and the deficit sits at record heights.

But Mr. Flaherty turned around the Opposition Leader's arguments. Speaking to The Globe and Mail, he said he has no plans to back down on his decision to cut the corporate tax rate - and if Mr. Ignatieff wants to campaign on that, then bring it on.

"We are going to stay the course on that and if Mr. Ignatieff wants to run on a platform that says he is going to raise taxes, so be it. We'll have a good debate," Mr. Flaherty said after a speech in Washington on Wednesday.

"He wants to raise taxes. He wants to go to the Canadian people and tell them that he wants to raise taxes, raise business taxes that already have been voted for by Parliament, have already come into effect. That's his choice. That's not where we are; we want to create more jobs in Canada," Mr. Flaherty said.

The Finance Minister said the lower business tax rates are beneficial for Canada. "We have a higher dollar, which is tough on manufacturers, but we have a terrific advantage because of our lower taxes on the people who actually create jobs in Canada, which are small, medium and larger size businesses."

The Prime Minister echoed that sentiment in an interview with Postmedia published Thursday.

"I won't kid you, and I think it's one of the reasons why I don't think a minority will go on forever - this government will not make compromises that it believes are damaging to the Canadian economy," Mr. Harper said. "We have made it a fundamental principle of our government since we got into office that we would have a competitive tax structure for job creators, for employers in this country."

The election rhetoric has heated up this week when Mr. Ignatieff began his winter tour -an 11-day blitz of 20 ridings in which the Liberals think they could make gains. As he hit the road Wednesday, the Liberal Leader repeated that his party could not support the Harper government's plan to reduce corporate taxes.

He said it doesn't make sense to give corporations a break when the deficit is at $56-billion, calling the tax cuts one of the key differences in priorities between the Liberals and Tories. The Conservatives, Mr. Ignatieff charged, are more interested in big spending on new stealth fighter jets and prison cells while his Liberal are focused on helping families cope with aging parents, their children and their retirement savings.

To coincide with the launch of his tour, the Liberal Leader's team also released a document asking Canadians whether they're better off today than five years ago, when the Harper minority government was first elected. It's a question they hope will frame the next election campaign.

A senior Ignatieff official says with Canadians now beginning to think about filing their income tax return, the Tory corporate tax cuts will resonate. Through their research, Liberals are "getting back 'Well, isn't that dandy. I'm actually just turning to my income tax now. I'm not getting a break and these large corporations are getting a break,'" the official said.

"It's all about priorities. They know they don't want the government to be spending any more money. They don't. But they say, 'Okay, out of what you've got why don't I get any attention?'"

With a report from Kevin Carmichael in Washington

Follow on Twitter: @janetaber1

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