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Carbon-tax confusion puts Ontario Tories in attack mode

The Progressive Conservatives are using a misstep by an Ontario Liberal candidate to attack Dalton McGuinty, demanding that he "come clean" about whether he plans to raise taxes.

Mr. McGuinty had planned to talk about health care and highlight the economy Wednesday during an event at the Kellogg's factory in Belleville, where 48 new jobs were created. Instead, he was put on the defensive and became embroiled in a controversy over a carbon tax.

By the end of the day, Mr. McGuinty's team, provoked in part by a similar pledge from PC Leader Tim Hudak, released a letter indicating the Liberals are not planning any tax increases.

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Meanwhile, Mr. Hudak's claim – that his was the only party not raising taxes – had been in the news cycle, unchallenged, for nearly half the day.

Mr. Hudak's aggressive attack was two-pronged and it came early. On Wednesday morning, the Tories launched a new radio attack ad, criticizing a comment by a Liberal candidate that suggested the McGuinty government was considering a carbon tax – an idea that torpedoed Stéphane Dion's Liberals in the 2008 federal election.

Dave Levac, who was parliamentary assistant to the Energy Minister before the writ dropped, made the remark during a web chat Tuesday with a local newspaper. "Yes, there is a possibility that a carbon tax is on the table to evaluate, because it presently is," he said in response to a question about a carbon tax.

The Liberal war room quickly went into damage-control mode, saying their candidate misspoke. "I confused a cap and trade program with a carbon tax," Mr. Levac said in a statement to reporters, adding that Mr. McGuinty has definitively ruled out a carbon tax.

Still, Mr. Hudak's Tories pounced with their ad. Such a policy, the narrator in the Tory ad says, would drive up the cost of gas, hydro and heat.

Mr. McGuinty tried to shut down the suggestion, too, telling reporters there was no carbon tax but by then the damage was done and he was pushed off his message.

The second Tory attack followed quickly with Mr. Hudak arguing his Progressive Conservatives are the only party that won't raise taxes.

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Speaking at a news conference at a family's home in Brampton, Mr. Hudak released a letter to Greg Essensa, Ontario's chief electoral officer, promising that he would not raise the tax rate, establish any new taxes or delegate additional tax authorities to municipalities.

"The official position of the Ontario PC Party remains what is stated in our changebook platform: under an Ontario PC government, taxes will go down," the letter states.

In a separate letter addressed to Mr. McGuinty, Mr. Hudak called on him to announce whether he will raise taxes if he is re-elected.

Again, the Liberal Leader found himself on the defensive as his handlers weighed their options, deciding how to respond.

The Taxpayer Protection Act, which was brought in by Mike Harris's Tories in 1999, requires political parties to file their intentions to raise or introduce new taxes at least two weeks before an election. If a party wants to increase taxes after forming a government, it is obliged to hold a referendum.

After several days of being hammered by the Liberals over Harris-era cuts to health care, invoking the act could help position the Tory Leader's links to Mr. Harris – under whom he served as a cabinet minister – in a more positive light.

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"A formal filing with the chief electoral officer offers you the opportunity to finally come clean and confirm what future tax increases you are planning," Mr. Hudak wrote in the letter to Mr. McGuinty.

Speaking to reporters, Mr. Hudak said the Liberals did not announce their intention to raise taxes prior to the last election but instead used a "loophole" in the act to introduce the harmonized sales tax without a referendum. He said his party would strengthen the Taxpayer Protection Act to get rid of loopholes and exceptions if he becomes premier.

Mr. Hudak's platform indicates he would lower income tax by 5 per cent on the first $75,000 of taxable income, remove eco fees from environmentally damaging products, and allow couples to use income-sharing when filing taxes.

Finally Wednesday afternoon, Mr. McGuinty responded in a letter to the Ontario's chief electoral officer.

"Our prudent plan does not rely on any increased taxes or higher fees in order to meet our budget targets," he wrote.

Borrowing another page from the Harper Tory election playbook, Mr. McGuinty warns the Progressive Conservative and NDP platforms would put the province's "fragile recovery at risk."

He attached a document outlining the cost of his party's platform to the letter he submitted.

The letter aims to position the Liberals as the only party capable of managing public finances, accusing the Tories of planning to offload more costs onto municipalities and taking a swipe at the NDP for a "crushing $9-billion tax increase." A spokesman from the NDP said he did not know where that figure came from.

The NDP released its own letter to the chief electoral officer late Wednesday. It said the party plans to raise corporate taxes to 14 per cent, where they were until June of 2010, and remove the HST from "the basics." A party spokesman said those basics include home heating, hydro and gas.

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