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Liberal leader Michael Ignatieff gives his closing speech at the party's conference in Montreal called Canada 150: Rising to the Challenge (Christinne Muschi/Reuters)
Liberal leader Michael Ignatieff gives his closing speech at the party's conference in Montreal called Canada 150: Rising to the Challenge (Christinne Muschi/Reuters)

John Ibbitson

Canada can't afford a corporate tax cut, <br/>Ignatieff urges party Add to ...

Liberal Leader Michael Ignatieff concluded a landmark Liberal policy conference Sunday with an ambitious agenda that increases federal spending on the environment and health care, to be paid for by cancelling planned cuts to corporate taxes.

In doing so, Mr. Ignatieff made it clear that the next election, when it comes, will be between two clear alternatives: A Conservative government that emphasizes deficit and tax reduction, and a Liberal government that is willing to defer tax cuts and perhaps extend the deficit to target social programs.

"Do we rush ahead with further reductions to corporate tax[es]we can't afford?" he asked the 300 participants at a Montreal, "or do we use these resources" to fund new programs.

A tax freeze, he said, would prove that the Liberals had "the courage to choose, to make the choices we have to make."

The tax freeze arrived, to everyone's surprise, at the end of a weekend in which 300 participants at a Montreal hotel, plus thousands of others who participated in satellite gatherings across the country, joined a free-ranging debate on the future of health care, the worrying instability of the pension system, the prospects for fighting global warming and other social, environmental and foreign-policy topics.

"We changed Canadian politics this weekend, and it will never be the same," Mr. Ignatieff said at a speech after the event.

He then proceeded to lay out a broad, though far from specific, set of commitments that would advance the federal government significantly in areas traditionally dominated by provincial governments.

Watch Mr. Ignatieff's closing remarks below:

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Under a Liberal government, Ottawa would invest in early childhood and post-secondary education.

"If you get the grades, you get to go," he promised students contemplating college and university.

The federal pension plan would be reformed, possibly by creating a supplemental, voluntary plan for those who wanted to purchase insurance.

In health care, there would be investments in home care and preventive care. And a Liberal government would redouble efforts to fight climate change.

Anticipating provincial complaints that the Liberals were trying to return to a previous era of aggressive federal intervention in areas of provincial jurisdiction, Mr. Ignatieff maintained that the real responsibility of the federal government was to bring key actors together to effect agreement and change.

"We are not a big government party," he maintained, "we're the party of the network," adding "the chief power of the prime minister is the power to convene."

Anticipating, as well, Conservative complaints that taxes and deficits would rise, Mr. Ignatieff unveiled several aspects of the fiscal-responsibility component of the party's election platform.

The Liberals would freeze the corporate tax rate at 18 per cent. Corporate taxes have been declining from a high of 35 per cent in 2000 to 18 per cent now. Conservative Finance Minister Jim Flaherty's budget projects further cuts, to 15 per cent in 2012. Under a Liberal government the rate would be frozen at 18 per cent.

Liberal finance critic John McCallum estimated that cuts would save in the range of $6-billion annually in 2012,

The Liberals would also reduce the deficit-to-GDP target to one per cent within the first two years of government. The target currently stands at 3.5 per cent.

And in a concept known as pay-as-you-go, any new programs would have to be fully funded, either through new revenues or through reallocation of existing revenues.

None of this persuaded the Conservatives one whit.

"Ignatieff says he would force Canadian businesses to pay more tax, a bizarre proposal in today's fragile economic climate," said Dimitri Soudas, Mr. Harper's press secretary, in an e-mail. "Ignatieff's tax hike will kill jobs, slow [investment]to Canada, put the brakes on our economic recovery and set Canadians back."

But Liberal communications director Mario Laguë said Liberals maintained, "you can be fiscally responsible while at the same time investing in what's important for the future."

The battle lines are drawn, for an election that will invite Canadians to choose between two clear and irreconcilable alternatives.

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