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Tories go on offensive to defend corporate tax cuts

The Harper government will launch a cross-country campaign to defend its corporate tax cuts, trooping out cabinet ministers and MPs across the country to counter Liberal Leader Michael Ignatieff's efforts to exploit the cuts as a potential election issue.

The political offensive was signalled to MPs in a memo from the Prime Minister's Office on Sunday, but many of them, and especially a large part of the cabinet, have already been enlisted: On Wednesday, the biggest day of the campaign, 10 ministers will attend events to defend the cuts.

Many of the events will be held at businesses in various parts of the country, in an effort to convince Canadians that the corporate tax cuts are good for ordinary firms - not a gift for big banks, as Mr. Ignatieff asserts. Tory MPs across the country have been briefed with combative arguments to sell the cuts as good for "Main Street."

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"We will not sit back and let Mr. Ignatieff spread lies and misinformation about our tax cuts for job creators," says a four-page memo sent to Conservative MPs and senators by Prime Minister Stephen Harper's communications staff, a copy of which was obtained by The Globe and Mail.

"That is why this week, we will take steps to illustrate to Canadians the benefits of our tax reductions for job-creating businesses by meeting with workers and job creators at their workplaces across the country."

The Tories' efforts to co-ordinate a counterattack is an attempt to seize an issue that the Liberals intend to focus on in an election campaign - if Finance Minister Jim Flaherty's March budget is defeated, triggering an election. The Liberals released new ads last week attacking the Tory government over the cuts, and Mr. Ignatieff blasted them in CBC interview broadcast Saturday as a "gift to large corporations."

It's not clear if that election is coming, especially as NDP Leader Jack Layton has sounded conciliatory notes. Both Mr. Ignatieff and Mr. Layton have attacked Mr. Harper over corporate tax cuts - but they have already been approved by Parliament and no new vote is needed in Mr. Flaherty's budget. The cuts reduced the corporate tax rate from 18 per cent to 16.5 per cent on Jan. 1 of this year; another cut is scheduled to take effect next January, reducing the rate to 15 per cent.

The Conservatives, however, will argue at events this week that by rolling back the tax reductions, the Liberals will "stall our fragile economic growth, kill jobs and put the financial security of hard-working Canadian families at risk," according to the PMO memo to MPs. "Raising taxes on job creators is a recipe for economic disaster. It will kill jobs and hurt economic growth."

The Tory events will be spearheaded by Mr. Flaherty and his junior minister, Ted Menzies, but even cabinet members in non-economic portfolios, like Justice Minister Rob Nicholson, will take part.

At a time when Canadians are recovering from the recession, and many face uncertainty about their personal finances, the counterattacks now pit two high-profile narratives about the best way forward against each other. The Conservatives say cutting companies' taxes will create jobs to help Canada out of the recession, while the Liberals argue they will cost public coffers too much and will merely go to higher profits.

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Mr. Ignatieff has argued that the country can't afford big corporate tax cuts and that they don't necessarily create jobs.

In Saturday's CBC Radio interview, he said he listens "to Mark Carney, the Governor of the Bank of Canada" and bank studies that show cutting corporate taxes don't necessarily create jobs or improve productivity. Mr. Carney has, however, spoken in past speeches of low corporate taxes as part of Canada's sound macro-economic policies; in a March, 2010 speech, he said Canada's are "now among the most attractive in the industrialized world."

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About the Author
Chief political writer

Campbell Clark has been a political writer in The Globe and Mail’s Ottawa bureau since 2000. Before that he worked for The Montreal Gazette and the National Post. He writes about Canadian politics and foreign policy. More

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