OTTAWA -- A Liberal green plan that would levy taxes on carbon use while offering a matching cut on income taxes split the political parties yesterday, setting up a potential electoral battle for Canada's left-wing vote.
The idea, which is being touted as revenue-neutral, received support yesterday from the federal Green Party, but was criticized by the NDP's Jack Layton, who argued that it would harm working class Canadians.
The Liberal idea would slap a carbon tax on usage of fossil fuel, while at the same time reduce income taxes to keep the government's overall tax-take neutral.
The Liberals hope to announce the idea by this summer in an effort to reclaim the high ground on the issue of the environment. The extra tax would not apply to the price of gasoline at the pumps, but to most other greenhouse-gas-causing fuels, such as home heating fuel.
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The idea received an endorsement from Green Party Leader Elizabeth May, whose party has also proposed income tax cuts along with a carbon levy.
"If the Liberals do this and they're the first federal political party other than the Green Party to call for a carbon tax, I'll be saying 'good for them,' " Ms. May said.
Her supporters, who polls say comprise about 10 per cent of the electorate, are key potential voters for Mr. Dion.
But while Ms. May supported the notion, the NDP appears to be carving out a separate position, with Mr. Layton saying he wouldn't cut income taxes, nor would he slap a tax on carbon.
"We don't see that as the way to go," he said. "We don't see putting a charge on the backs of individual Canadians through taxes as the way to go."
Mr. Layton said forcing big polluters to pay is the most effective and rapid way to bring down the level of greenhouse gases in the atmosphere.
Meanwhile, federal Tories joined in the criticism of the idea, with Environment Minister John Baird saying that the most cost-effective way of dealing with GHGs is "forcing the big polluters to clean up their act."
Mr. Baird added that the Dion idea cannot be characterized as a carbon tax.
"It's a gas-tax increase. It's a tax on home-heating fuel. It's a tax on natural gas for people to heat their homes and hot water tanks. It's a tax on electricity. It's just one big Dion Liberal tax grab," he said.
"They're like an annoying driver in front of you on the highway that can't pick a lane. And that's why nothing happens. A year from now, he will have another plan."
Mr. Baird said that Mr. Dion would have to raise gas taxes by 50 cents before people would think twice about reducing gasoline purchases.
Another Tory told the House of Commons that Mr. Dion will be in for a tough summer.
"We have learned that he plans to tour the country attempting to convince Canadians his new massive gas tax is a good idea," said Mervin Tweed. "With gas prices estimated at being the highest they have ever been this summer, that is going to take a lot of explaining."
Indeed, some Liberals are nervous at the prospect, arguing that the proposal needs to be unveiled well before an election because it is so technical.
