Bob Rae accused Finance Minister Jim Flaherty of playing a "Pollyanna" game, charging that only days ago he was denying the possibility of another recession.
The Statistics Canada numbers that came out Wednesday show a darker picture than the one painted by Mr. Flaherty – for the first time the recession the Canadian economy has contracted.
"The focus for the country, the focus for this government, has to be jobs and not cuts," the Interim Liberal Leader told reporters after his party's four-day summer caucus retreat wrapped up in Ottawa.
Mr. Rae noted that just 12 days ago, Mr. Flaherty told a summer sitting of the House finance committee that "Canada was somehow an exception to all this stuff going on around the world" and there was " no reason to change the government's plans or approach."
In fact, at that meeting the Finance Minister reassured Canadians he was monitoring the global economic situation but that Canada was "well positioned to face global economic challenges as we have done successfully in the recent past."
On Wednesday, Mr. Rae repeated his view that the government rethink its plan to cut $4-billion from government spending and instead "listen to the facts."
"The facts are the European and American economies are having great difficulties. ... Naturally, Canada is not an island and it's simply essential for Mr. Flaherty to come up with more plans, more approaches that say we are going to put jobs first," Mr. Rae charged.
In addition, the Liberal chief challenged Prime Minister Stephen Harper and Mr. Flaherty to a "fight of ideas" over how to weather a recession. He defended his record as Ontario premier during the 1990s recession, arguing that his government made some very tough decisions and tried to save jobs.
"I am not backing away from any fight with Mr. Harper," he said before invoking the names of Mike Harris, who succeeded him as premier, his protegé Tim Hudak (who is now vying to replace Dalton McGuinty) and several current federal cabinet ministers who served in Ontario's Progressive Conservative government "Mr. Harris, Mr. Flaherty, Mr. Hudak, Mr. Baird – all of that group, all of the horsemen of the Apocalypse – we're going to have a real argument."
He then accused the former Harris government of cutting welfare, social housing and shutting down subway lines in Toronto that are now finally being completed. "If you want to compare records ... bring it on. I am ready for it."
The federal Conservatives responded in kind. "Bob Rae's promise to hike taxes will kill jobs, pure and simple," said Andrew MacDougall, the Prime Minister's spokesman. "Higher taxes are the last thing the Canadian economy needs during this fragile recovery."