The Conservatives will run on a fiscal platform of lowering taxes instead of increasing spending, Leader Stephen Harper said Monday.
During an address to the Frontier Centre for Public Policy in Winnipeg, Mr. Harper confirmed that a Conservative government would increase the GST credit by 25 per cent for low income Canadians.
"I cannot promise today to abolish the GST, but I can tell you that the time has come to significantly lessen its impact on those it hurts most, the poor and those on fixed incomes," Mr. Harper said in prepared comments. "Too many Canadians are suffering real hardship from price increases on such necessities as home heating, gasoline and automobile insurance."
Mr. Harper said the party would also eliminate the GST on the excise tax on gas and on the portion of gas price above 85 cents a litre.
"We have record gas prices. They are injuring key businesses. They are burdening consumers," Mr. Harper said. "In many cases, they are hurting some of the poorest people in our country. Only government is benefiting. In fact, through a series of taxes, like the GST, the federal government is simply rolling in revenue."
He tagged the cost of increasing the GST credit at about $1-billion annually and the removal of GST on federal excise tax at about $300-million annually. He emphasized that removing the GST on gas over 85 cents per litre would cost "next to nothing."
"These are revenues that no one foresaw even a few months ago," Mr. Harper said. "We are only depriving Ottawa of a massive windfall it didn't count on and that it doesn't need."
"This raises an interesting question. Why won't the Liberals do this themselves?"
The Conservative Party plan also calls for tax breaks to families with children instead of boosting spending on institutional daycare.
The party would also replace corporate welfare and business development subsidies with lower business tax regimes.
Mr. Harper touched on budget issues in his speech, saying his government would be more honest with Canadians than the Liberals have been about their finances.
In a speech that took various shots at the "incompetence and the corruption" of the federal Liberal government, Mr. Harper accused Mr. Martin of radically understating the size of the expected federal budget surplus in order to make funding announcements with "wild abandon" in the runup to the election.
"Paul Martin virtually admitted this when only days after a budget that allowed for no new spending on health care, he announced that he was ready to fund a new 10-year plan to save the health system - although it's a plan no one has actually seen," Mr. Harper said.
"Remember that this is the same government that only weeks before the federal budget said it didn't even have the money to fund the health care commitments it had already made in last year's health accord with the provinces."
The Conservatives pledge to take a balanced approach to surpluses, using some to pay down some debt, some on spending in areas like national defence and health care, and some to help reduce taxes.
"Unlike the Liberals, we will not just spend money," he said. "We will also use these surpluses to get money out of Ottawa and into more hard-pressed levels of government, into the productive activities of the economy, and back into the pockets of ordinary taxpayers."
The Conservative tax-cut plan got a premature debut on the weekend with leaked copies circulating in Ottawa before the party platform could be officially unveiled by Mr. Harper.
Liberal strategists say the Tory tax cuts will cost the treasury $32.3-billion when fully implemented, money that will have to come from social programs.
