OTTAWA - The federal government is certain to offer a multibillion-dollar economic stimulus plan in its upcoming budget, but an intense debate is developing over whether tax cuts should constitute a key part of the package.

Finance Minister Jim Flaherty made clearer Tuesday that the Jan. 27 stimulus budget would contain some form of tax cuts for Canadians to spur retail and other spending and get the economy moving again.

Spending billions of dollars to build roads and bridges is one way to create jobs and stimulate the economy, he said prior to a day of pre-budget consultations in Montreal.

"But also we need to look at tax reductions, additional tax reductions, as another way of supporting the economy," he added.

A few minutes later in Ottawa, analysts from the left-leaning Canadian Centre for Policy Alternatives called on Flaherty to reject broad-based tax cuts, but not income supports directed at low-income Canadians.

"The least efficient fashion you can spend stimulus dollars is on tax cuts because those tax cuts are much more likely to be spent on savings and debt repayment as well as purchasing inputs" on imported goods, said David MacDonald, co-ordinator of the centre's alternative budget project.

Among private sector economists there is a fierce debate about the effectiveness of tax cuts as a short-term stimulus and - if they are to be adopted - what kind and what portion of the total package they should represent.

The vast majority of private sector economists that have spoken out on the subject place cuts to taxes well back on the string of priorities that Ottawa should consider in the budget, with infrastructure spending - lots of it and quick - leading the parade.

The benefits are clear. Many of Canada's roads, bridges, sewers, ports and other forms of infrastructure need repairs or require expansion, so doing it now not only addresses a long-term requirement for the economy but creates jobs and puts money in the pockets of families to spend when the stimulus is most needed.

The centre estimates a $33-billion stimulus package with infrastructure spending as a centrepiece would create 407,000 jobs and grow the economy by $50 billion in additional GDP.

Although some disagree, most economists don't see the same bang for the buck on tax cuts. First, individuals may choose to save the money rather than spend it, and there is little help for troubled Canadian manufacturers if the goods consumers buy - flat panel TV sets, DVD players or cellphones - are imported.