Liberal leader Stephane Dion "thinks this is the right time to impose a new massive tax on energy consumers. We, as conservatives, consider that the last thing Canada needs now is a new tax," Harper told some 1,500 supporters in St-Agapit, Quebec. The event was broadcast on television.

Harper said a tax on fuels that cause global warming at a time of spiraling fuel prices would have a "devastating effect" on the national economy.

The Liberal Party presented the tax initiative in June, and Dion has made it clear he is prepared to challenge Harper's minority government over the issue.

Harper boasted about his government's achievements since he took office in February 2006 and said he was also willing to face a general election on the issue of national economic security.

Upcoming by-elections should provide some insight on Canada's political climate, as several analysts expect Stephane Dion trigger early general elections later this year.

Harper, however, does not appear to be worried.

"Friends, fellow conservatives, whatever Mr Dion does we will be ready," he said.