In another signal the battle for voters is revving up, the federal Conservatives and Liberals are both promising to do something about rising gas prices.

In Winnipeg on Monday, Conservative Party leader Stephen Harper said he wouldn't apply the GST to the portion of gas prices that exceeds 85 cents a litre.

The move wouldn't cost taxpayers a dime, he explained, because there's no way budgets were calculated with such high prices in mind.

"These are revenues that no one foresaw even a few months ago. We are only depriving Ottawa of a massive windfall it didn't count on and that it doesn't need," Harper said in Winnipeg on Monday.

A Conservative government would also eliminate the tax-on-tax that drives many motorists crazy, he said. The federal excise tax currently rolled into pre-GST fuel prices would be made GST-exempt.

"I think the main thing is that Canadians know that their government isn't trying to gouge them at the same time they're having trouble affording the cost of filling their tank."

The Opposition leader also told the lunchtime crowd his party told the lunchtime crowd at the Frontier Centre he plans to increase the GST credit for low-income earners by 25 per cent.

All told, the tax breaks would total about $1.3 billion a year.

Liberals switch gears

In Ottawa, reaction to the Conservative leader’s promises was swift. When asked about the proposal, Finance Minister Ralph Goodale told reporters that lowering the GST on gas prices would create an administrative nightmare.

The savings, he added, would be negligible -- amounting to no more than a penny or two a litre.

Calling gas prices "an international issue driven by global forces that are far beyond anyone's national control," Goodale said, "It's very tough both for individuals and for governments to be able to cope with this domestically."

The government is working on solutions, he said, that aren't ready yet.

Within hours, however, the finance minister's office had made an about-turn.

"The government obviously shares the concern of consumers with respect to these higher prices," Goodale said in a statement released hours after telling reporters he had yet to come up with any suggestions.

The Liberals plan to "ensure that any additional money supports the number one priority of Canadians: health care," the release said, announcing a plan to allocate excess GST from gas sales to a medical equipment program.

GST revenues from gas sales already exceed last year's by $15 million, the finance minister said. At that pace, the excess could be $230 million by year's end.

"This money will help finance the purchase of MRI machines and other needed equipment in hospitals right across the country."

With the prime minister widely expected to drop the writ this weekend, for a trip to the polls on June 28th, Goodale's late-in-the-day announcement combines two issues expected to dominate the campaign agenda.