The Opposition parties are primed to pounce on Prime Minister Paul Martin in the final TV debates tonight and tomorrow over ongoing controversy over Liberal ethics.

Just as the RCMP investigation into a possible income trust leak got underway last week, the Liberals found themselves with a new scandal to worry about. Heritage Canada has called in the RCMP to probe a $4.8 million grant to a pro-Canada group called Option Canada during the 1995 referendum campaign. The group has since been disbanded.

A key Martin supporter in Quebec, Claude Dauphin, had been associated with this group.

Complicating things further was the fact that Foreign Affairs Minister Pierre Pettigrew accepted a $12,000 consulting contract from this group before he entered politics.

However, controversy about Option Canada has been around for several years and the Opposition may not be able to leverage this story as they were with income trusts. And the Conservatives themselves may have exposed a weak flank over the weekend.

They were forced to acknowledge a CBC Television report that their proposed cuts of the GST will be at the expense of the income tax cut for lower income Canadians announced by the Liberals in this fall’s mini-budget.

If the Conservatives form the next government, the low income tax rate will be reduced to 15% from 16% for the 2005 tax year as the mini-budget proposes. But the Conservatives would lift the rate back to 16% in 2006.

They defend this rollback by saying that because the GST cuts are worth $32 billion to Canadians compared to $29 billion for the Liberals’ tax cuts, the voters are still $3 billion ahead.

NDP Leader Jack Layton, who just days ago was telling voters he could work with Conservative minority government, said he was shocked that low income Canadians would be made to pay for tax cuts enjoyed by those in higher income brackets.

The Conservatives newfound preference for GST cuts over lower income tax rates has generally been criticized in the economics and business community has bad policy.

The Liberals may have found the opening they have needed to get their economic record on the election issue agenda, particularly as the Conservatives had been withholding details of the rollback until a leak to the media.