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Stephen Harper pledged Wednesday to keep taxes low, which he said is essential for Canadians and their economy to prosper, while his Liberal counterpart is promising a "decent and humane retirement" for senior citizens.

On Day 5 of the federal election campaign, Harper said the Canadian economy is emerging from the recession in good shape, with opportunities for businesses to thrive and invest in a country with competitive corporate tax levels.

Distancing his party from his opponents, Harper said the Conservatives were committed to keeping taxes low in an effort to protect and create jobs.

He said the upcoming vote will give Canadians an opportunity to make a choice about what kind of government they want.

"We obviously think it's a pretty clear choice: stability and low taxes or instability and high taxes," Harper told reporters when speaking in Brampton, Ont.

Liberal Leader Michael Ignatieff, who started his day in Vancouver, announced a plan to boost pensions and help Canadians prepare for their retirement years.

Ignatieff said his party would strengthen the public pension system by creating a new low cost, low risk, tax deductible system, run by the Canada Pension Plan investment board, that would allow seniors to invest up to 10 per cent of their income. He also pledged a $700 million boost to the guaranteed income supplement, as well as improvements to the existing CPP system.

"Mr. Harper is running this campaign on fear, trying to make Canadians afraid of everything," Ignatieff told reporters. "I'm in politics to take the fear away, to take the fear out of Canadian life. And one of the things Canadians are frightened of is will I have enough money to retire on in decency? And that's why we're making these commitments today."

Susan Eng of the Canadian Association of Retired Persons called the additional pension system "an important election promise" given that workers today are not saving enough for retirement and need a greater variety of options when planning for their futures.

Eng also praised the GIS boost and said whether it's the Liberal pledge or the increase contained in the previous government's budget, or other measures to help seniors, "it would help if any of this came to fruition."

"What's important for us to look at is that we should have a benchmark that says it doesn't matter whether it's income supports or reducing expenses, affordable housing or drug coverage, to make sure that no Canadian senior lives in poverty in Canada," Eng told CTV's Power Play Wednesday evening. "We have way too many people who are having trouble making ends meet today."

The pension announcement came a day after the Liberals pledged to spend $1 billion annually to help parents pay for the post-secondary education of their children.

Ignatieff took aim at Harper's pledge to keep corporate tax rates down, saying a Liberal goal to boost the rate up to 18 per cent is "competitive."

"And this is a moment of choice for Canadians. Do you want more corporate tax giveaways, or do you want to invest in education for your kids?" Ignatieff said. "We think that investing in education for our kids is a better way to ensure the economic future of our country."

Ignatieff said his party will not raise taxes on "ordinary Canadian families."

The Liberal leader has stated his intention to reveal the Liberal party's full platform within days. By Wednesday evening, Ignatieff was scheduled to be in Winnipeg, where was to hold a town hall meeting.

Wednesday marked the second time that Harper made an appearance in Ontario since the start of the five-day-old campaign.

CTV's Ottawa Bureau Chief Robert Fife said the party is eager to make gains in the City of Toronto, where the Liberals hold significant support.

"Forty per cent of the Liberal seats are in the Toronto area, so they are trying to really do a Mao Tse Tung strategy, which is get the countryside first and then take the city," Fife told CTV's Canada AM from Toronto on Wednesday morning.

In the last federal election, Conservatives won many seats on the outskirts of Toronto, while Liberals and a pair of NDP candidates held the city interior.

After his engagements in Ontario, Harper visited Montreal -- a city where the Conservatives are also hopeful of making a breakthrough with two star candidates, former CFL commissioner Larry Smith and the head of the Quebec provincial police union.

"It's really hard for them in Montreal, it's been a very strong Liberal-Bloc bastion and it will be hard for the Tories to get in," Fife said. 

NDP seeks to reward ‘job creators'

Harper's arguments on the need for low taxes came hours after NDP Leader Jack Layton announced that he also favoured cutting taxes -- for small businesses that act as the "job creators" of the Canadian economy.

At a Wednesday morning campaign stop in Oshawa, Ont., Layton said that small businesses create nearly half the jobs held by Canadians and they should be supported accordingly.

"I'm going to reward the job creators because they are the ones that are helping build our economy," Layton said when speaking to reporters on Wednesday afternoon.

The NDP plan would drop the small business tax rate two percentage points to nine per cent.

In terms of hiring incentives, the NDP would offer a job creation tax credit that Layton said would be worth $4,500 "per new hire" to small business employers.

Layton said the incentive would be paid out in two parts -- $3,500 up front, with an additional $1,000 "if the job is still there a year down the road" -- to encourage these small businesses to keep employees on their payroll.

The party believes such a strategy could help generate 220,000 new jobs on an annual basis.

Layton compared the incentive with a $1,000 tax credit the Tories had offered in the recent budget, saying that the NDP's concept would cover more costs for employers and would reward small businesses that keep workers on their payroll.

"In the end, my plan will cost less, create more jobs, allow businesses to invest in machinery and equipment and ensure that Canada remains competitive," Layton said.

Layton said his party also favours restoring the general corporate tax rate to 19.5 per cent, the level it stood at in 2008.

The NDP leader said increasing the corporate tax rate could save Canada billions of dollars and the money could be reinvested for other purposes.

In the long term, Layton said the NDP believes Canada should keep its combined provincial-federal tax rate at a lower level than the United States in order to maintain a "competitive edge" in the marketplace.

The Oshawa riding in which Layton was speaking has been held by Conservative MP Colin Carrie for the past three elections. The NDP is running a high-profile union leader as its candidate there, in hopes of snatching the seat away from the Tories on May 2.

With files from The Canadian Press