FREDERICTON - Prime Minister Stephen Harper took aim at the Liberal party's carbon tax policy Thursday, suggesting the so-called Green Shift proposal is really a "green shaft" that will stifle the Canadian economy.

Harper, wrapping up a two-day tour of Newfoundland and New Brunswick, described the Liberal policy document as a "hidden agenda" that is finally out in the open.

In a campaign-style speech to about 400 party supporters, Harper told Conservatives the carbon tax will be a major bone of contention in the next federal election - one that will clearly separate Tories and Grits.

"We have got to fight it with everything we've got," Harper said in a partisan speech at a Fredericton hotel.

"Put simply, we cannot let the Liberals take this country back to the tax-and-spend policies of the past."

Harper said the Liberal policy was a tax increase masquerading as environmental policy.

"It will drive up the price of everything - transportation, groceries, electricity, heating, even propane for our BBQs," he said.

He said the policy would hurt the Canadian middle class while making the cost of living "unbearable" for fixed-income seniors and low-income families.

The Liberals say Harper is misrepresenting their key policy, stressing that the carbon tax will be largely offset by income-and business-tax breaks, which the Conservatives fail to mention.

The complicated climate-change plan would also offer tax benefits to the poor, elderly and rural dwellers.

Harper's speech highlighted Tory accomplishments stretching back to Confederation, and the prime minister boasted that he now presides over the longest-serving minority government in Canadian history.

He reminded the crowd that his government is committed to cutting taxes, getting tough on crime, paying down the debt, strengthening the military and reinforcing sovereignty over the Arctic.

Meanwhile, he said the country's economic fundamentals are strong, with low and stable interest rates and inflation, high employment levels and a balanced budget.

Earlier in the day, in a speech to the Conservative Atlantic caucus at a meeting west of Fredericton, Harper claimed the Liberals failed to mention the Green Shift in a statement issued after they concluded their own Atlantic caucus meeting last week in Nova Scotia.

"There's a reason it didn't mention the carbon tax policy," he said. "That's because it's a bad policy for Atlantic Canada. It would hurt families here, it would hurt industries here and that's why they're not talking about it."

Before heading to New Brunswick, Harper fuelled election speculation after a funding announcement in Newfoundland by obliquely musing about the possibility of engineering the defeat of his own government.

In Newfoundland and again in New Brunswick, he suggested Liberal Leader Stephane Dion is responsible for creating chaos in Parliament and he urged his foe to make up his mind about whether the Conservatives should continue governing.

"I see Mr. Dion has been threatening to defeat the government again this summer - I am starting to feel like I am starring alongside Bill Murray in the movie Groundhog Day," he said.

"As humorous as Mr. Dion's behaviour has been, this spectacle of his threatening to defeat the government, then backing down, has to end."