UPDATE 1-Canada opposition Liberals vow crackdown on tax loopholes

(Adds government reaction)
By David Ljunggren and Randall Palmer
OTTAWA, Sept 26 (Reuters) - Canada's opposition Liberal
Party, under fire for promising to run budget deficits if it
wins an Oct. 19 election, said on Saturday it would raise
billions by cracking down on tax loopholes and trimming
expenditure.
Most recent polls show the center-left Liberals stuck on
around 30 percent with both the rival New Democrats and the
ruling right-of-center Conservatives, who are trying to pull off
a rare fourth consecutive victory.
The Liberals say they need to run deficits for three years
to help finance a national infrastructure program needed to
bolster a sluggish economy. Rival parties, who promise to keep
the budget balanced, say the Liberals will run short of money
and the deficits would be crippling.
In a detailed costing of their program, the Liberals said
that by the 2019/20 fiscal year they would raise C$3 billion
($2.3 billion) annually by cutting expenditure and boosting
personal income tax revenue.
"We are very confident we can find these savings ... I think
it is the responsibility of any government to continue to seek
ways to spend taxpayers' money prudently," said Liberal
legislator John McCallum, a former national revenue minister.
The Liberals promise to cut tax benefits for those earning
more than C$200,000 a year, cap how much people can claim
through stock option deductions and clamp down on tax evasion.
The Conservatives, who insist they are the only party
capable of managing the economy, said careful study of the
documents revealed Liberal leader Justin Trudeau was in fact
hiding a $6.5 billion hole.
"(His) recklessness means $6.5 billion in new tax hikes on
top of the billions in tax hikes he has already promised, all
while running massive deficits," said Employment Minister Pierre
Poilievre.
Trudeau has already promised to raise taxes on the top 1
percent of earners and cancel child benefits paid to all
parents, focusing relief instead on those who need it.
The costing said the deficit under a Liberal government
would be C$9.9 billion in 2016/17, C$9.5 billion in 2017/18 and
C$5.7 billion in 2018/19. The budget surplus in 2019/20 is due
to be C$1.0 billion.
The party said it would lower the federal debt-to-GDP ratio
to 27 percent from the current 31 percent.
The New Democrats - who have never governed federally - say
they will raise the corporate tax rate to 17 percent from the
current 15 percent and crack down on tax avoidance.
ID:nL1N11M0WE
($1= 1.33 Canadian)