Interim Liberal Leader Bob Rae said Wednesday that Finance Minister Jim Flaherty is downplaying the potential impact of Europe's economic crisis on Canada as he laid out his own vision for the country's economic prosperity.

A day after Flaherty gave a fall economic update in Calgary, Rae said the finance minister didn't acknowledge the seriousness of the situation in his speech to the Calgary Chamber of Commerce or that Europe's problems are not going to be solved quickly.

"In fact, I think one has to say that even in his statement yesterday, Mr. Flaherty seriously underestimated and understated just how serious this crisis is, and its potential for truly catastrophic results from an economic standpoint," Rae said during his own speech to the Economic Club of Canada in Toronto.

Flaherty confirmed that the federal budget won't be balanced until 2015, a year later than the Conservative government had planned. The adjustment came as no surprise to Rae.

"He hasn't met a target he's set since 2006," he said, referring to when the Conservatives took power.

Flaherty was preaching prudence during his economic update, Rae said, but he called Prime Minister Stephen Harper's Conservatives one of the most imprudent governments he's ever seen.

He cited the government's omnibus crime bill and plan to buy 65 F-35 fighter jets as top examples of how the government is wasting taxpayer dollars. He later told reporters that the G8 and G20 summits hosted in Ontario last year are further examples of waste. He said the Conservatives allowed spending to grow "very dramatically" even before the last recession hit and that the country is now paying a price.

"We have to come back and say to Mr. Flaherty, 'If you want to be taken seriously as a manager of the economy, you're going to have to deal with the waste in your government.' We are certainly going to be focusing more and more of our attention on how wasteful some of their spending is and how it's not productive," Rae said.

Liberals call for EI premium freeze

Rae also criticized the government in his speech over the employment insurance premiums for employees and employers that are slated to increase on Jan. 1, 2012. Flaherty announced Tuesday that the planned hike would be cut in half and the premiums will instead rise by up to five cents per $100 for employees and seven cents per $100 for employers.

The Liberals say the premiums shouldn't be going up at all, and should be frozen.

"This is the wrong time to be raising direct taxes on jobs," said Rae. "A premium is a tax and payroll taxes discourage hiring. The additional burden of $600 million on businesses is coming just as the economy is slowing down. We still think the Conservatives should change course even further."

As part of his vision for job growth and economic growth, Rae called on the government to reform the income tax regime and put an end to "endless boutique tax credits and changes that respond to the flavour of the month politics that is now the hallmark of the political right."

The income tax credits do nothing to help the eight million Canadians who are exempt from paying income tax because their incomes are too low, said Rae, adding that the tax system has become a "haven for loopholes."

Liberals would aim to create a simpler and more clear tax code, he said.

The Conservatives shot back in reaction to Rae's economic policy speech and comments, criticizing his record from when he was the NDP premier of Ontario. Conservative MP Ted Menzies, minister of state for finance, said in an email to CBC News that Canadians know Rae's "dreadful economic record."

Menzies said Rae's policies in Ontario in the 1990s caused higher debt, taxes and unemployment.

"Rae's economic mismanagement was a complete disaster for workers and taxpayers," Menzies said, adding that Rae continues to pursue policies that would "kill jobs" and raise taxes.

Rae's speech outlined a number of other broad policy directions. He called for the government to commit to long-term infrastructure projects, mass transit for cities, new national strategies on health, education and poverty, better education, housing and health services for aboriginal communities, more greening of the economy and encouraging businesses to find new markets abroad.