A Liberal government would increase funding for research and support of post-secondary students and universities by hundreds of millions of dollars, party leader Stéphane Dion pledged on Wednesday.

Speaking at the University of Western Ontario in London, Dion said the measures that he would introduce if he wins the Oct. 14 federal election would ensure that Canada continues to have top-class universities with excellent research facilities, and make a post-secondary education more affordable.

The plan calls for a 60 per cent increase of funding for university-based research, to $500 million a year. It also proposes a $100-million fund to enable scientists, researchers and graduate students to take on projects that extend beyond the barriers of their disciplines.

"The Canada we Liberals want is not the Canada where only the upper middle class and the rich are able to broaden their minds with a degree or diploma," Dion told a crowd of students at the school.

A Liberal government would ensure all students can receive guaranteed loans of $5,000, regardless of parental income, Dion said, while adding his party would work with provinces and territories to reduce "punitive" student loan interest rates.

Dion also said he would create a $1,000 education grant that would be delivered to students four times annually instead of complicated tax credits that are often only available at the end of the year.

At an event later in the day, Dion also pledged a Liberal government would spend $1.25 billion towards the creation of a national child-care program.

Liberal proposals would create 'large deficit': Harper

Meanwhile, NDP Leader Jack Layton began his day at a children's centre in Toronto, where he proposed a $1.45-billion plan that would initially create 150,000 national child care spaces in the first year of a New Democratic Party government.

During a campaign stop in Welland, Ont., on Wednesday, Conservative Leader Stephen Harper again took aim at the various programs promised daily by his opponents, calling the level of spending proposed by Dion and Layton "mind-boggling."

"Our government will not preside over disastrous financial policies; that is not why we are here," Harper told reporters.

"I would rather lose an election, and I would rather lose a vote in Parliament than do something that I know would put the Canadian economy into deep jeopardy."

Harper cited Dion's announcement on Tuesday of a proposed catastrophic drug plan, saying estimates done by provincial premiers put the projected cost of such a plan at $6 to $10 billion a year, a far cry from the $800 million Dion had said would be needed.

He also accused Dion of siding with Green party Leader Elizabeth May on calling for a GST increase.

"People should be under no illusion — raising consumer taxes, carbon taxes, the GST is the policy of these two parties," Harper said.

In his blistering criticism of the Liberal spending plans, Harper then invoked the name of Bob Rae, the current Liberal MP and former Ontario NDP premier who has taken on a more visible role in Dion's campaign in recent days.

"In this province in the 1990s, Bob Rae and the NDP took a slowdown and turned it into the biggest recession since the 1930s," Harper said.

The Conservative leader's comments came after he spoke to a group of parents about tobacco and children's health, and announced his party would ban the use of candy-flavoured tobacco additives such as bubble gum and cotton candy.

Harper will head to Quebec later in the day to campaign in Chicoutimi — the birthplace of the sovereignty movement and long considered a bastion of the Bloc Québécois, the CBC's Paul Hunter reported from the campaign.

NDP looking to get more seats in Toronto

The NDP is looking to pick up more of the 22 Toronto-area seats in election, said the CBC's Julie Van Dusen, who is covering the campaign from Ottawa. The NDP currently holds three seats in the area, including Layton's.

"Basically their theme is going to be … that the Liberals have taken Toronto for granted for too long," said Van Dusen.

Also on Wednesday, Bloc Québécois Leader Gilles Duceppe continued to press his message that the Bloc was the only party that can prevent a Conservative majority, the CBC's Tim Duboyce reported from the campaign.

Duceppe reiterated his comments to a small group of supporters during a breakfast in Sept-Îles, Que. The Bloc leader will head to a campaign event in Baie-Comeau later in the day.