The Canadian Press

Liberal leader Stephane Dion speaks as Bob Rae (back) listens during a campaign speech in Halifax, N.S. on Tuesday Sept. 16, 2008. (THE CANADIAN PRESS/Frank Gunn)

OTTAWA -- A combative Stephane Dion took aim at both his chief political rival and critics from his own party Tuesday with a salvo designed to make virtues of his two greatest weaknesses -- his unpopularity and halting English.

Dion appeared at a rally in Halifax flanked by Bob Rae, a leading light in the party and former leadership hopeful, to highlight the strength of his team in contrast to Stephen Harper's one-man campaign.

And he tackled his language problem head on, saying his English may be poor but his words ring true -- unlike those of the well-spoken Conservative leader.

"Mr. Harper, he speaks better English than me, OK. But I speak the truth better than him in English and in French."

Dion saved his best counter for critics inside the party whom newspaper reports suggest have been grumbling about Dion and the campaign he has waged so far.

"When I did the Clarity Act, I had a lot of anonymous sources against me," Dion said. "When I saved the Kyoto protocol I had a lot of anonymous sources against me. A lot."

Rae's presence beside Dion seemed designed to not only take a bit of the spotlight off the rookie leader, but also to quell rumours of internal dissent, particularly from Rae and Michael Ignatieff, both of whom many believe still harbour leadership aspirations.

Rae played his role to the hilt, pronouncing unequivocal support for Dion and unmitigated disdain for Harper, whom he compared to U.S. president Herbert Hoover, who lost the 1932 election after failing to manage the economic fallout from the Great Depression.

"I'm not an anonymous Liberal. I'm Bob Rae. I'm tremendously proud of our leader" and the substantive campaign he has waged, Rae said.

"From Mr. Harper ... we have ideology, we have personal attacks, we have negativity and we have Herbert Hoover in a blue sweater."

Dion was in Halifax promising a $900-million catastrophic pharmacare program, and again selling his vision of a Canadian economy focused on green technology, with taxes based on carbon usage instead of income.

With the economy and financial markets entering uncertain territory, Dion's complex Green Shift proposals have become a major concern for Liberals, and a key area of differentiation with Harper's Conservatives.

But the Tories believe it is a political millstone dragging down the Liberals at a time when Canadians are more concerned with pocketbook issues.

The collapse Monday of two Wall Street titans, Lehman Brothers and Merrill Lynch, sent markets reeling and elevated the economy to the top of the list of concerns for voters.

Canada's major stock market in Toronto shed 516 points on Monday, nearly five per cent of its value, and continued to bleed Tuesday morning, dropping another 150 points.

Harper was in Kitchener, Ont., to unveil a new tax credit proposal that he said could save first-time home buyers up to $750 on closing costs.

He again repeated his warning to Canadians not to take a chance on what he called the "crazy" Liberal plan to shift taxes away from income and towards carbon usage.

The economy has slowed, but Canada has continued to perform better than most industrialized countries, Harper said. Employment is growing, not falling, and the economy is advancing, not retreating, he added.

Dion mocked Harper's approach, which he said has given Canada the worst economy in the G8 of industrial nations and the weakest since Brian Mulroney was prime minister in 1991.

"He's saying, `Don't worry, be happy.' In his words, `There is no bloodshed,"' Dion said of Harper.

"Well, tell that to the hundreds of people who lost their jobs at Ford last week. The hundreds who lost their jobs at John Deere."

Enter NDP Leader Jack Layton, who was outside that very same John Deere plant Tuesday in Welland, Ont., blasting the government for failing to protect manufacturing jobs in Ontario.

Layton assailed the government for cutting corporate taxes without insisting that jobs be protected at the same time.

"No politician can guarantee jobs, but what you can guarantee is that you are going to fight for those jobs," he said.

Bloc Quebecois Leader Gilles Duceppe was campaigning Tuesday in Chibougamau, Que., and Chicoutimi, Que., while Green Leader Elizabeth May continued her effort in her central Nova Scotia riding.

May made noise Tuesday as she attacked Peter MacKay, Harper's defence minister and her Conservative rival in the riding of Central Nova, for dropping a major military contract with a local knife supplier.

Grohmann Knives have been used for decades by Canadian paratroopers to cut their harnesses, but the contract has suddenly gone to a company in China, May said.

She said Grohmann's reputation for quality, durability and reliability is "exceptional and unquestioned" and wondered what other "shoddy, non-Canadian goods" are being purchased for Canadian soldiers under federal cost-cutting measures.