A bitter fight that has been simmering between the federal Tories and Ontario's provincial Liberals turned into a war of words Tuesday.
Federal Finance Minister Jim Flaherty accused Premier Dalton McGuinty's Liberals of showing a "lack of leadership and vision" by not giving tax breaks to businesses. Flaherty said that has hurt the province's manufacturing sector.
"This isn't an academic discussion. It makes a difference in job creation,'' Flaherty said during a Toronto speech to the Canadian Federation of Independent Businesses (CFIB).
"If we don't attract more investment in the province of Ontario, we're going to have more job losses in the province."
On CTV Newsnet's Mike Duffy Live Tuesday evening Flaherty took direct aim at McGuinty.
"The only ideas he brings forward are Band-Aid solutions," Flaherty said, adding, "He has got his fundamentals wrong."
Flaherty said Ontario has to reduce its provincial tax rate on business to 10 per cent. Critics said Flaherty's comments may indicate that Canada's manufacturing sector won't be getting much help in next week's federal budget.
"It's obvious from his budget that there is not enough in his upcoming budget to deal with the major economic issue across Canada -- that is the manufacturing sector," Greg Sorbara, a former finance minister in the McGuinty government, told Mike Duffy Live.
"In the absence of that, what he's done is (create) an unprovoked attack on the Ontario economy ... which continues to be strong, except for certain areas of manufacturing."
Responding to Flaherty's speech to CFIB, Ontario Economic Development Minister Sandra Pupatello called his words bald-faced "lies.'' She said the province's economy is showing growth even in the face of challenges from its manufacturing sector.
"These are words of war, and if he wants a war, he's going to get one,'' said Pupatello, who was at Flaherty's speech.
In the past, McGuinty has accused Ottawa of abandoning the province's manufacturing industry by not providing enough money to offset downturns due to a slowdown in the economy and a strong dollar. McGuinty said Ottawa's budget should include funds to match a $1.1-billion Ontario plan to help create manufacturing jobs.
Flaherty said he would like to see the province:
- Get rid of business-input taxes
- Reduce inter-provincial tax barriers
- Offer no subsidies or bailouts to specific businesses
The NDP challenge
Meanwhile, the federal New Democrats appear to be throwing down the gauntlet for a spring election by challenging both the Conservatives and the Liberals.
NDP finance critic Thomas Mulcair held a press conference Wednesday afternoon saying that the NDP has sent a letter to Tory Finance Minister Jim Flaherty stating that his budget -- which is expected to be tabled next week -- is on the "wrong track."
"Change directions or we won't support it," said Mulcair.
He said the NDP doesn't agree with Conservatives when they give what he called "huge (tax) cutbacks" to major corporations that negatively affect the forestry and manufacturing sectors.
Speaking in French, Mulcair said, "We expect that the government make choices that are in the interest of the population in terms of health, infrastructure, and communities."
After challenging the Conservatives, Mulcair shifted gears and took on the Liberals, who he said are not acting like an opposition party. He said that unless Stephane Dion's party votes against a Tory budget that does not adhere to the terms the NDP has laid out, they will lose credibility.
"What Mr. Dion is saying in his door-to-door pamphlets is 'we're a bunch of tough guys standing up to the Conservatives,'" Mulcair said.
"In fact, yesterday and the day before (Dion) said he is probably going to abstain again on the budget... they're abandoning all claims to being the official opposition."
Dion has not said whether his party will support the Conservative government's federal budget, setting up a possible election trigger when Parliament votes on the document in March.
With files from The Canadian Press
