Liberal leader Michael Ignatieff is pledging $1 billion to help Canadians care for sick or elderly relatives, a key part of his party's election platform.

Ignatieff said Tuesday he plans to pay for his family-care program by eliminating corporate tax cuts proposed by the Conservative government, including a 1.5 percentage point cut slated to kick in Jan. 1.

The Liberal plan would include:

n A new refundable family care tax benefit of up tp $1,350 a year. The Liberals predict some 600,000 families would be eligible for the refund, costing the state about $750 million each year.

n A broader and longer-lasting family care benefit that would replace the compassionate-care benefit awarded under the Employment Insurance program. As many as 30,000 Canadians could qualify for the new benefit, for a total cost of roughly $250 million a year, according to Liberal estimates.

The current benefit grants six weeks of EI to Canadians caring for a relative determined by a doctor to have less than six months to live. About 5,000 people receive the benefit each year.

The new system would offer up to six months of EI to those caring for gravely ill – though not necessarily dying – relatives. Family members could split the benefit among them, and the six months could be spread over the course of a year or used all at once.

Ignatieff unveiled his proposal in Gatineau, Que., at the home of a family struggling to care for a sick relative.

Conservatives shot back, saying the Liberal plan to squash corporate tax cuts would compromise the nation's economic recovery and trigger more job losses.

Government House leader John Baird said his party's commitment to bolstering the economy will bring more relief to families than the Opposition's proposed program.

He noted the Harper government has continued to increase transfer payments to the provinces for health care, even at the height of the economic crisis.

Ignatieff's pledge falls short of a national homecare program, which many experts say will become increasingly vital as baby boomers age. Liberals say that kind of program will have to be discussed with the provinces, who oversee all healthcare services.

Until today, Ignatieff has vowed to fund his platform promises by freezing corporate taxes at the current rate of 18 per cent, indefinitely suspending a reduction to 16.5 slated for 2011 and a second drop to 15 per cent the following year.

But with no sign of an election this year, the Liberal leader has had to clarify that his government would effectively reverse the upcoming reduction to retain some $1.8 billion in tax revenue.

Liberal strategists maintain that the homecare crisis is more pressing than further lowering the corporate tax rate. They say some 2.7 million Canadians are providing care for relatives and 40 per cent of them are drawing on their life savings to get by.

With files from The Canadian Press