The pricing system is designed to give people an incentive at the point of purchase to consume less greenhouse gas-emitting gasoline and natural gas.

The federal version includes quarterly rebates of $92 for a single person and $184 for a family of four. Next year, rural residents will start getting a 10 per cent top-up, including a retroactive one for this year.

Last week, Higgs called the tax "the major issue driving inflation," though Statistics Canada figures show it only contributed 0.1 percentage points to September's 3.8 per cent annualized inflation rate.

Holt slammed the Higgs government's throne speech last week for not including any new measures designed to help people cope with the high cost of living.

But after the premier responded by goading her to join him in a lobbying effort to have the tax scrapped, Holt conceded she has objections to the tax, too.

"It doesn't reflect our reality, so I think it needs to change in a way that is a policy properly developed for the people of New Brunswick and our realities," she said Friday.

Change of heart

In 2018, Holt, then a Liberal candidate, said she favoured the provincial carbon tax proposal by then-premier Brian Gallant.

It would have used accounting sleight-of-hand to leave consumers paying no extra tax at the gas pump.

That was contrary to the requirements of the national policy and Ottawa rejected the plan.

Higgs came up with his own version, which complied by taxing consumers at the federally required rate but used the revenue to fund environmental projects and cuts to both income and gas taxes.

Holt said in a tweet in 2022, when running for the Liberal leadership, that the Higgs version "should continue," but that "its level, application and how the funds it generates are spent should be reviewed."

Higgs says a better way to help people emit less is to spent money on programs like the provincial heat pump program. (Spencer Gallichan-Lowe/CBC)

She said in an interview Monday that this should involve increasing the rural top-up beyond 10 per cent, to recognize that people living in those areas don't have the option of public transit or cycling to get to work.

"My position on this has been consistent. We need a carbon program that recognizes New Brunswick's reality," she said.

But Holt said it was "a good question" whether all the carbon tax revenue should be rebated or whether some of it should be spent subsidizing the transition away from fossil fuels. 

She said it was also "a good question" whether rebates to urban residents should be reduced so that rural rebates can be increased. 

Regardless, Higgs says Holt's offer to collaborate with him on federal lobbying doesn't go far enough because it would leave the tax in place for no good reason.

"If you can't validate what it's achieving other than to add to the affordability concerns of every New Brunswicker, get rid of the thing," he said.

A better way to help people emit less is to spent money on programs like the provincial heat pump program, he said, installing units that help residents consume less electricity to heat their homes.

Prime Minister Stephen Harper has testified that he personally authorized an offer made to late MP Chuck Cadman in 2005 in exchange for his help defeating the Liberal government.

But he maintained he knew nothing about an alleged offer of a $1 million life insurance policy to get Cadman's vote, saying he only approved an offer of campaign financial support in the event of an election.

In sworn testimony filed Wednesday in Ontario Superior Court, Harper said he authorized his campaign manager, Doug Finley, to approach Cadman after Finley told him he had heard Cadman was willing to side with the Tories but couldn't because of financial distress and fear of losing an election.

The testimony given two weeks ago was Harper's first detailed account of his role in the so-called Cadman affair. During four hours of testimony, he offered two different versions of when he learned about Cadman's financial troubles.

Harper said he approved the overture to Cadman on May 18, 2005, the day before a crucial confidence vote, after receiving a message from Finley through one of his assistants.

The prime minister has launched a $3.5-million libel suit against the Liberal party. His testimony was part of a cross-examination by a lawyer working for the Liberal party. Harper's testimony was given under oath in Ottawa in the boardroom of the law firm that is representing him. Officers of the court as well as lawyers for all sides were present.

He testified that he gave permission for Finley to speak to Cadman, a former Conservative, even though he was sure Cadman was going to support the Liberals in the confidence vote.   

Lengthy explanation

This is Harper's only lengthy explanation of his actions in the Cadman affair. Cadman's family has asserted that the Conservatives offered Cadman a $1-million insurance policy to help defeat the Liberals. Harper has said he knew nothing of an insurance policy and sued the Liberals for defamation when they posted an article on their website suggesting otherwise.   

The prime minister has also sought a court order to prevent the Liberal party from using or distributing copies of an audio tape at the centre of the libel suit.

The tape contains an interview a British Columbia author conducted with Harper in 2005 about attempts Conservative party operatives made to persuade Cadman to help defeat the minority Liberal government in the Commons.

Harper is heard telling author Tom Zytaruk in 2005 that he was aware Conservatives had discussed "financial considerations" with Cadman as they tried to coax him into opposing the Liberals during a confidence vote.

Harper testified that he personally met Cadman on April 1 that year in an attempt to coax him back to the Conservative fold, after having authorized a similar approach by former Tory MP John Reynolds as early as the previous fall.

Under cross-examination by the Liberal party lawyer, Harper initially said Finley informed him about Cadman's worries over finances and life insurance the following September.

Cadman terminally ill

Cadman had terminal cancer at the time of the 2005 confidence vote, which the Liberals survived thanks to Cadman's support. He died later that summer. Harper is suing the Liberals over suggestions posted on their web site that he was aware of a bribery attempt in the affair.

But Harper testified during the examination that the only offer to Cadman he authorized was the one requested by Finley the day before the May 19 confidence vote.

He said he first learned of the insurance policy, as well as Cadman's financial straits, when Dona Cadman told him of the offer during a personal visit he made to her house on Sept. 9, 2005, where, after his talk with Dona Cadman, he was interviewed by Zytaruk.

"When I talked to Doug subsequent to my conversation with Dona and Tom Zytaruk, and I started to inquire, we started to bang heads together about where this story was coming from," Harper said. 

"Doug told me, you know, he didn't source it, but he told me that he had heard stories about Chuck being concerned about his finances and being concerned about insurance, but he said, in fact, Chuck had never raised any such matter with him," Harper said.

"My first reaction to the story was it sounded preposterous to me. I couldn't understand how or why anyone would offer a man with cancer a life insurance policy … and Doug Finley certainly wouldn't have done it because Doug is not a … personal benefits man".

PM offers new details

But as Liberal lawyer Chris Paliare pressed Harper about whether he had been told by anyone earlier that Cadman was worried about financial security, the prime minister offered new details.   

"Maybe I should add to you where this came up firstly," he said. "This is when Doug Finley called me through my executive, Ray Novak, on the 18th, and he asked permission to approach Chuck Cadman on behalf of the party to get him to rejoin the caucus, and that the story was that Chuck wanted to vote with us in Parliament as he usually did, and that he would want to rejoin the caucus and fight with us in an election campaign, but that he couldn't because he didn't have, you know, he didn't have the financing, he would have lost the election, et cetera, et cetera."

Harper testified that his initial response was that he believed Cadman was going to vote with the Liberals, based on his earlier April 1 discussion with Cadman.

The prime minister said party members were conveying the message "aggressively" to him that then-prime minister Paul Martin and other Liberals had approached Cadman seeking support in the Commons vote and that he "had a responsibility to make sure that Chuck was formally approached and that it was clearly understood that he could rejoin the caucus, that he could get the nomination, there was no doubt about that, and that he would be a priority for the party in terms of re-election and financial support. And on that basis, I authorized the meeting on the 19th."

Though Harper has not taken any legal action against Zytaruk, he has contended since last June the tape of the interview Zytaruk conducted with him outside Dona Cadman's home was doctored.

He has since said the financial considerations included campaign expenses and support, but added more detail about Finley's offer during the cross examination.

"[Finley] said he had no offer of a policy of insurance, he was there to lay down for Chuck that he could join the caucus, that he would automatically get the nomination, and the party would take care of squaring that away in the riding, that he would become — this is the detail that Doug gave me at the time — that he would become part of what we call the target seed voter program which has a number of various benefits for candidacy that is high priority for the party in terms of financial support, in terms of services and other kinds of campaign support".

Under further questioning, Harper said the assistance would have included a repayable loan to Cadman's riding association  not to the candidate personally.

Lawyer presses for details

The Liberals' lawyer pressed Harper about whether the insurance policy Dona Cadman described may actually have been a top-up to Cadman's life insurance as an MP should he lose his seat in an election. Harper said he was unaware of those kinds of details. 

Paliare also probed Harper over the difference between offers of financial assistance or aid to reimburse candidate expenses and offers made "for securing a vote to bring down a government."

Harper rejected the comparison, saying his party "cannot agree under any circumstances to provide a personal benefit" to a candidate before or after an election. He said the party can only agree to transfer money  in accordance with electoral law  to its own candidate.

Paliare also questioned Harper over the prime minister's claim the Zytaruk tape had been doctored and Harper said several times during the examination that he believed Zytaruk himself altered the tape.

A Superior Court hearing is scheduled for Sept. 22, likely in the midst of a federal election campaign, where expert evidence on the authenticity and integrity of the tape will be heard.

Prime Minister Stephen Harper was cross-examined last week in his $3.5-million libel case against the Liberal party, it was disclosed in an Ottawa court Friday.

Harper agreed to the sworn testimony in his unprecedented suit against the Liberals even though he claimed parliamentary privilege last year to avoid testifying in a libel suit a former Conservative filed against him after the 2006 federal election.

A lawyer for the Liberals confirmed in response to a question from Justice Charles Hackland that Harper had been cross-examined over an affidavit he filed in the case, but she would not reveal any details later other than to say the examination took place last Friday.

Harper's lawyer, Richard Dearden, also declined to comment on the prime minister's testimony.

But Dearden revealed that the next hearing in the case — a potentially explosive court drama that could take place in the midst of an expected federal election campaign — may now have to be postponed.

Former Conservative candidate Alan Riddell sued Harper over statements the prime minister made about an agreement struck between Riddell and the Tories that had him step aside as a candidate for the 2006 election.

As Riddell pressed the suit against Harper, the prime minister argued he could not be compelled to testify when Parliament was in session, citing an 18th-century British law that protected MPs from lawsuits by creditors.

A court master accepted the argument, but Harper later agreed to an out-of-court settlement with Riddell.

Meanwhile, Dearden argued Friday that an expert opinion comparing Harper's suit to one of the biggest scandals in Canadian history should be tossed out of court.

The Liberal party filed the opinion by a political scientist as part of its defence in the defamation suit Harper launched against the party over the Chuck Cadman affair.

The prime minister's reputation has been smeared by the comparison between a 19th century political scandal and allegations Harper was aware Conservatives may have tried to bribe the late MP Cadman, Dearden argued.

The opinion by University of Toronto professor Peter Russell compares the Cadman allegations to the railway scandal that brought down Canada's first prime minister in 1873.

Dearden told Justice Charles Hackland the comparison — which Russell used as one example in arguing Harper is the first Canadian prime minister to sue political opponents — is "absurd" and unfairly taints Harper's reputation.

In the lead-up to another court battle scheduled for Sept. 22 over a journalist's taped interview of Harper that is at the centre of the lawsuit, Dearden argued there is no comparison between the Pacific Railway scandal and allegations that Conservatives offered Cadman a bribe to help defeat the Liberal minority government in 2005.

Dearden stopped short of accusing Russell of attempting to smear Harper by associating him with the Pacific Railway scandal and other controversies, but said: "There is an association, there is a link there."

Harper launched the defamation suit against the Liberals in the wake of a biography of Cadman that quoted his widow saying Conservatives fruitlessly offered Cadman a $1-million life insurance policy to vote against the Liberals in the Commons on a confidence measure.

The prime minister based his lawsuit on Liberal party web postings that suggested Harper was aware Tories had offered Cadman financial considerations, and an audio recording the party posted of an interview Harper had with Cadman's biographer, B.C. author Tom Zytaruk.

Dearden told Justice Hackland that Russell's affidavit contains "scandalous" suggestions that taint Harper's reputation and has no place in arguments over whether the injunction should be issued.

Russell cited the railway scandal as he tried to argue that, unlike any previous prime minister, Harper filed his libel action in an attempt to silence the opposition. He cited another famous scandal that erupted in 1931 over allegations the Liberal party had received large sums of money from a company proposing a massive diversion of the St. Lawrence Seaway for a hydroelectric project.

It emerged that the company received a bill from a Liberal senator for payment of the cost of a holiday former prime minister Mackenzie King had in Bermuda.

Dearden said the examples of scandals where misconduct was discovered has no bearing on Harper's case.

"It's scandalous to do that," Dearden argued, calling it an "absurd and ludicrous" proposition to compare the earlier scandals with the Cadman affair.

He also asked Justice Hackland to strike out portions of Russell's essay that accused Harper of launching the libel suit to force an end to political debate over the bribery allegations.

Though Harper earlier had insisted on a speedy hearing of his request for a court order to stop the Liberals from distributing or quoting the Zytaruk tape, Dearden complained Friday about delays receiving records from the Liberal legal team and revealed a sound expert Harper has retained to examine the tape will be on a European holiday for two weeks prior to the Sept. 22 hearing.

Lawyers for the Liberals filed a 14-page essay from Russell as expert evidence. The essay says it would be a blow to freedom of expression for politicians and free discourse in politics if Harper succeeds.

Justice Hackland questioned Dearden several times about Harper's objections to the affidavit and suggested it might be best to let the judge who will hear the injunction application next month decide.

A Liberal lawyer at the hearing, Odette Soriano, said Russell's viewpoint is relevant once the case reaches a stage where Harper's libel allegations are argued.

Prime Minister Stephen Harper has dropped a $3.5-million libel lawsuit against the Liberal party over statements published on the party's website suggesting the Tories offered a bribe to the late Independent MP Chuck Cadman.

Lawyers for both parties issued a joint news release late Friday, saying they've settled all issues in the case. 

Neither side will make any further comment.

Harper launched the lawsuit in March 2008 after the Liberal party posted website headlines alleging two senior Conservatives attempted to bribe Cadman to secure his co-operation on a crucial budget vote that threatened to topple the Liberal minority government in May 2005. The headlines claimed Harper also knew about the alleged bribe.

Back in March, Harper called the allegations "absolutely false" and "despicable."

In a book published earlier in 2008, B.C. author Tom Zytaruk quotes Cadman's widow, Dona, as saying her husband told her that Conservatives offered him a $1-million life insurance policy in return for his vote against the Liberals.

In an interview for the book, Harper can be heard on tape saying: "I don't know the details, I know that, um, there were discussions, um, but this is not for publication?"

Tape was edited, Harper testified

During cross-examination during libel proceedings in August, Harper said that the tape had been edited.

Harper testified that he only authorized for Cadman to be approached with an offer of financial help for his election campaign if Cadman would vote against the Liberals, defeating the government, and then run for the Conservatives.

Harper also testified that he told Zytaruk he did not know about the offer of an insurance policy, and he said Zytaruk edited that response out of the recording.

But a court-ordered analysis of the tape found that the first part of Zytaruk's interview with Harper, which contains the portions the prime minister has contested, had not been altered.

The second part, beginning roughly one minute and 41 seconds into the tape, was a new recording that was made over the final part of the original recording, the audio expert found.

Cadman ultimately cast his vote in 2005 with the governing Liberals. With his support, the House voted evenly, 152 to 152, on Bill C-48. That left Speaker Peter Milliken, who is a Liberal MP, to break the tie with a vote for the budget.

Cadman died of cancer soon after.