By Joan Bryden, The Canadian Press
OTTAWA - Stephane Dion rolled the dice Thursday on his future as Liberal leader, unveiling a complex and politically risky plan to wean Canadians off fossil fuels.
The "green shift" would impose a carbon tax worth $15.4 billion a year - to be offset by an equivalent cut in income and business taxes and a boost in tax breaks for poor, elderly, northern and rural Canadians who stand to be hardest hit by the increased cost of necessities like home heating fuel, electricity, food and travel.
In choosing to make the plan the centrepiece of the Liberal platform, Dion is setting up the next election as an epic battle over competing economic and environmental policies. But he's also triggering a debate over character.
Dion cast himself Thursday as a bold, visionary leader with the courage to do the right thing.
By contrast, he characterized Prime Minister Stephen Harper as a bully who is spreading lies about the Liberal proposal and indulging in juvenile attack ads rather than engage in an honest, thoughtful debate about the most serious crisis facing the planet.
"These attack ads are a sad joke and an insult to the intelligence of Canadians," Dion told an enthusiastic crowd of Liberal MPs, senators and staffers, most of whom sported green caps and T-shirts bearing the slogan "The Green Shift."
"They say much more about Stephen Harper's leadership than they do about me or my ideas."
But Harper was quick to strike back, delivering a withering critique of the plan and the sanity of its author.
"Mr. Dion's policies are, as I said, crazy. This is crazy economics. It's crazy environmental policy," Harper said at a news conference in Huntsville, Ont.
"All this is is a revenue grab to finance his program."
Other Tories jumped in to depict Dion as a deceitful flip-flopper who can't be trusted to honour his promise that the carbon tax will be revenue neutral and will not be applied at the gas pumps. They pointed out that only two years ago, Dion himself dismissed a carbon tax as "simply bad policy" and repeatedly vowed not to introduce one.
"This from a man who says he's never broken a promise," scoffed Jason Kenney, the Tories' designated point man on the Liberal plan.
Kenney accused Dion of using "weasel words" like green shift and revenue neutral to make the carbon tax sound more palatable. And he said the leader is masking the indirect costs of the tax.
For instance, Kenney said the tax will make it more expensive for energy companies to extract and transport oil and gas - a cost that will inevitably be passed on to drivers, already reeling from soaring gas prices, at the fuel pumps.
"It's a chain reaction and it doesn't stop. It's a tax on everything," Kenney asserted.
Dion did not dispute that industry will pass along the cost of the carbon tax to consumers. But he argued that the Tories' plan to regulate the greenhouse gas emissions of big polluters or the NDP plan to impose a hard cap on emissions would produce the same result.
Only the Liberal plan, he boasted, will help offset the cost to consumers with tax cuts and tax breaks.
Although the plan is ostensibly motivated by the need to combat global warming, both the Tories and NDP noted that it has curiously little to say about actually reducing greenhouse gas emissions. Indeed, the plan says only that Liberals "believe that our target should be" to reduce emissions by 20 per cent below 1990 levels by 2020.
NDP deputy leader Thomas Mulcair said nothing in the plan compels emission reductions. He characterized Dion's carbon tax as "a fine" on industry for continuing to pump out unlimited increases in greenhouse gas emissions.
The NDP favours imposing a hard cap on the emissions of big polluters, with a trading system for companies that exceed the cap to buy credits from companies whose emissions are below the cap.
Dion, who used to advocate the same kind of cap and trade system, allowed that his views on the matter have "evolved."
He said he still believes cap and trade should be instituted eventually. But since it would take years to get up and running, he's become convinced that a carbon tax is the best way to get immediate results.
While Dion's plan was panned by his political opponents, it won guarded praised from economists and environmentalists, some of whom suggested the carbon tax isn't high enough.
The Liberal plan would initially peg the price of greenhouse gas emissions at $10 per tonne, rising to $40 per tonne in the fourth year. At that point, the tax would boost federal revenues by $15.4 billion annually, offset by a host of tax cuts and credits.
Reaction was muted among provincial governments.
In British Columbia, which will introduce a carbon tax on all fossil fuels, including gasoline, starting July 1, Energy Minister Richard Neufeld suggested that Dion's decision not to apply the tax at the fuel pumps is "kind of a cheap way of going about it."
"They really are not actually taking the bull by the horns," he said.
In Saskatchewan, the provincial government called Dion's plan the start of a new National Energy Program that will see companies in the oil-rich West taxed and the money redistributed to central Canada.
"This Liberal tax grab called green shift, if it is fully implemented, Saskatchewan people will get the green shaft," said Energy Minister Bill Boyd, whose government has close ties to Harper's Conservatives.
Nevertheless, Dion is clearly hoping the bold initiative gives him a political boost and helps shake the Tory caricature of him as a weak, dithering leader.
"The environmental and economic challenges of the 21st century can only be solved by bold vision and courageous leadership," Dion said.
"I offer this leadership to my country. My party, the Liberal party, must do so because others will not."
Dion and key members of his team are expected to fan out across the country over the summer to sell the merits of the plan.
Liberal new Carbon Tax Plan.
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