OTTAWA–Prime Minister Stephen Harper's office went after one of Bay Street's top figures – TD Bank CEO Ed Clark – for saying senior Canadian executives favour higher taxes to slay Ottawa's deficit.

It all started when Clark said at a a conference in Florida last week how much Canadians despise the budget deficit.

Although Canadians are "fiscally unbelievably conservative," Clark said, the government went into a "big deficit position" to stimulate the economy.

"The Canadian population is extremely unhappy to see these deficits," he added.

A member of the Canadian Council of Chief Executives, Clark recounted a recent meeting of the high-powered, 150-company group.

"We had a meeting two weeks ago, and almost every single person said raise my taxes. Get this deficit done," Clark said during a question-and-answer session at the TD Ameritrade Inc. conference.

He spoke about a prebudget consultation he recently had with Harper.

"He doesn't listen, but you get to chat with him," the TD Bank chief executive remarked. The comments did not go unnoticed in Harper's office.

A day later, an email labelling Clark a rich supporter of Liberal leader Michael Ignatieff went out from the PMO to senior Conservatives.

Entitled "Millionaire Ignatieff Economic Czar Calls for Higher Taxes," the email pointed out that Clark had been one of several financial experts who attended a dinner last spring to provide economic advice to Ignatieff.

"Yesterday, another member of Liberal party leader Michael Ignatieff's so-called `economic brain trust,' Bay Street banker Ed Clark, lectured Canadians from sunny Florida on our need to pay higher taxes," the PMO note said.

It went on to say that Ignatieff will use statements from "his well-heeled economic advisers" to justify massive tax hikes for "working- and middle-class Canadians."

The email ended: It's been reported "that Michael Ignatieff's Bay Street buddy Ed Clark earned $11 million in 2009. He can afford higher taxes. Can you?"

Sources said TD Bank was aware of the PMO email about Clark, but TD spokesman Mohammed Nakhooda declined to discuss it.

PMO spokesman Dimitri Soudas said: "This government will not entertain raising taxes on hard-working Canadians or cutting transfers to provinces."

John Manley, the former Liberal MP who now heads the Canadian Council of Chief Executives, said last week that the Harper government needs to have a "realistic conversation" with Canadians about balancing Ottawa's books, including the option of higher taxes. But the council has not taken a position on how the Conservatives should address the deficit.

The email to senior Conservatives about Clark was one of a series fired out of the Langevin Block, home of the PMO, on the subject of the deficit and possible tax hikes.

In a note earlier last week, the PMO cited remarks by former finance department official Scott Clark as proof that Ignatieff plans to raise taxes.

Clark, who has occasionally given advice to Ignatieff, prompted the response from the PMO by saying that the Conservatives will have to slash programs or raise taxes to trim the deficit.

"Today at an economic forum, Scott Clark, a member of Michael Ignatieff's so-called "economic brain trust," called for tax hikes. This is not the first time this Ignatieff adviser has argued for higher taxes," the email said, citing a newspaper op-ed article.

Fear of reprisals from the Harper government has made some people reluctant to take part in Liberal hearings on Parliament Hill these past few weeks, Ignatieff said Wednesday.

"I'll be frank with you. We've had a little of that," Ignatieff said, without providing details on who backed out of the events.

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The Liberal leader hinted, however, that some people were afraid of possible damage to their business or livelihood.

"Let's be clear. Most of the people we asked were only too happy to come.

"But I will not deny that there were a few who were concerned. I think it's regrettable. I think everybody should come to the House of Parliament, give their testimony and go home, secure in the knowledge that whatever business they have with the government of Canada is unaffected."

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