Stephane Dion says a Liberal government would not take a further point off the GST, but would cut income and business taxes.
In a speech Thursday to the Canadian Club of Ottawa, the Liberal leader accused Prime Minister Stephen Harper of hurting Canada's long term competitiveness when it cut the GST by one percentage point.
The Harper government has already reduced the GST to six per cent and has promised to shave off another point. That may come in the federal budget, to be unveiled on March 19.
Dion said an income-tax cut would be better for the economy and more appreciated by taxpayers.
"As Prime Minister, I would not cut a second point from the GST. Instead, I would help grow the economy, by ensuring that income taxes are low and that taxes on business and investment are competitive," Dion said.
"Taxes have a powerful impact on people's behaviour," he added.
"If you cut the GST, you encourage consumption. On the other hand, if you cut income tax, you encourage Canadians to save and invest, increasing our productivity."
Dion says the two-point GST cut would be "unproductive" and would "squander $12 billion per year."
"There is scarcely an economist on the planet who supports this approach. From the IMF to the OECD, from the Fraser Institute to the government's own Finance Department - all have clearly said that lower income tax, not lower GST, is the right way to go."
Dion also said that a Liberal government would focus on global competitiveness by investing in education and innovation, helping Canadian businesses access global emerging markets.
CTV's Rosemary Thompson says Dion's speech was likely designed to showcase his platform on issues other than climate change.
"Obviously Mr Dion wanted to brandish his economic credentials," she said. "It was a serious speech. It was one that was not just about the environment, it was one about his vision for Canada in terms of economic development."
