TORONTO - Finance Minister Jim Flaherty is making a "big mistake" by picking on Canada's most populous province while it's facing economic hardship, Liberal Leader Stephane Dion said Friday.

Prime Minister Stephen Harper needs to rein in his finance minister, who's been embroiled in an escalating war of words with the Ontario Liberals, Dion said following a Toronto campaign rally for Bob Rae.

If a federal finance minister had attacked Quebec in the same way that Flaherty has warred with Ontario, Quebecers would have condemned him unanimously in the National Assembly, Dion said.

"You have a slowdown of the economy internationally," Dion said. "It's not the time to bash a province that represents 40 per cent of the Canadian population."

The Ontario Liberals and federal Conservatives have been trading personal insults and barbs in recent weeks over how to handle the province's economy.

While one Ontario cabinet minister called Flaherty a "cartoon character" after he criticized the province's handling of Ontario's economic downturn, Flaherty retaliated by saying the province's high business taxes make it the "last place" in Canada to start up a new business.

Ontario Premier Dalton McGuinty, once dubbed the "small man of Confederation" by the federal Conservatives, shot back with a sharply worded letter to Harper on Sunday accusing Flaherty of undermining confidence in Ontario and failing the province by not using the hefty federal surplus to stimulate its economy.

Flaherty responded in kind Monday, saying his comments weren't a personal attack but "a wake up call" as he urged McGuinty to use the coming budget to slash business taxes.

McGuinty has so far dismissed Flaherty's calls for lower taxes, saying he's cut corporate income taxes already and won't go any further if it means reduced funding for health care, education and social services.

But Flaherty hasn't backed down from his scrap with McGuinty, despite a recent poll indicating the spat is hurting Tory fortunes.

McGuinty's refusal to cut taxes further is discouraging investment in Ontario, Flaherty said following a post-budget speech in London, Ont.

"I'm not going to be quiet about that," he said.

"I'm going to talk about that because I don't want Ontarians not having jobs. I don't want our economy not to grow in the province of Ontario. I don't want the jobs to go to other places in the country to the detriment of the people of the province of Ontario."

Flaherty also dismissed suggestions that his battle with McGuinty is about settling old scores from his days in the former provincial Conservative government of Mike Harris and Ernie Eves.

"I don't care whether Mr. McGuinty is premier or not," said Flaherty, who's calling for provinces to reduce corporate income taxes to 10 per cent.

"I would be raising this issue with a Conservative government in Ontario."

Insiders say Flaherty's attacks are strategic, with the Conservatives try to pin the blame for job losses and a struggling economy -- a key issue in any upcoming federal election -- on McGuinty's shoulders.

The premier has also attracted considerable attention since winning a historic second majority government in the October election, becoming a symbol of Liberal might in Canada as Dion struggles to rebuilt the federal party.

The timing of Dion's attack on Flaherty couldn't have been better, as the party's slate of prominent candidates head into the final stretch before the March 17 federal byelection.

But Friday's rally was disrupted by a group of chanting, placard-waving anti-war activists, who had to be pulled off the stage as organizers scrambled to regain control of the event.

The group didn't target Harper's Toronto speech earlier in the day because they know they won't change his mind about Canada's military mission in Afghanistan ahead of the crucial March 13 vote, said protester James Clark.

"We're targeting the Liberals because we think there is a possibility that if we can put pressure on them before next week, if they vote against this mission, it will end Canada's mission in Afghanistan," he said.

"That's why we're going after the Liberals."