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Harper hopes carbon tax not in Canada's future, but won't rule it out

OTTAWA - Prime Minister Stephen Harper has refused to rule out a carbon tax for sometime in the country's future, sending Conservative spin doctors scrambling to reframe his comments.

OTTAWA - Prime Minister Stephen Harper has refused to rule out a carbon tax for sometime in the country's future, sending Conservative spin doctors scrambling to reframe his comments.

Harper was asked point blank in a year-end interview with CTV News whether Canadians will ever see a carbon tax applied to their consumption of greenhouse-emitting fossil fuels.

"I hope not," he replied. "We're going to have to see what the regime in the United States looks like. We're going to have to harmonize a lot of our efforts with their efforts to be truly effective on a continental basis.

"But obviously we're looking to avoid any additional taxes on Canadians. That's a pretty firm priority of this government."

The prime minister's office had no comment Tuesday other than to refer back to Harper's quotes.

However, the Conservatives put out an internal memo telling MPs and other Tories that The Canadian Press story on Harper's interview was "false and misleading" and "inaccurate reporting."

The memo included some of Harper's quotes but left out the "I hope not" answer about a carbon tax and his reference to watching what the United States does.

The Tories are sensitive about the matter because Harper hammered former Liberal Leader Stephane Dion during the last election campaign for proposing a carbon tax to fight climate change. The idea become so contentious that Dion's successor, Michael Ignatieff, quietly dropped the plan, and even NDP Leader Jack Layton has avoided entertaining it.

However, many high-profile economists and environmentalists insist such a tax is the only way to change the behaviour of industry and consumers.

The Conservatives are waiting to see what the Americans do before charging ahead with their own plans. Greenhouse gas emissions limits for industry promised in 2007 have yet to be unveiled as Ottawa tracks the moves in Washington.

"We've seen in the past decade and half that if the Americans don't take realistic actions on emissions, it's difficult for Canada to do much because, quite frankly, factories and economic activity will simply relocate south of the border if the Americans are not harmonized with us," Harper said.

"Likewise, if the Americans are prepared to act it's essential we act."

On the economy, Harper hesitated to declare that Canada is in a full-blown recovery, but said he's optimistic for 2010. He said the government will move into deficit-slaying mode, which it hopes to accomplish without any deep spending cuts or tax hikes.

"I think that's the way to do it, exercise sustained discipline and not engage in radical approaches of program cuts or tax increases, but simply to try and live within a disciplined, sustained-growth spending pattern."

He warned Canadians that interest rates, at record lows, are sure to rise and people should be prepared for that. He also hinted that the government may continue the popular home renovation tax credit for another year.

Would the government shut down Parliament early in the New Year to come back with a fresh slate of policies and a reconfigured Senate that would have more Conservatives than Liberals?

Harper said he hasn't made a decision yet, but did refer to the "timing of a throne speech." A Speech from the Throne is presented at the beginning of a new session of Parliament.

"We will be bringing forward a new budget in March and we are working on the planning of a new spring session now but haven't taken any decisions on a number of those things - on timing of a throne speech, of filling senators, and all the things I'm reading in the paper that I've supposedly decided."