Canada PM fights off election attacks on economy

Canadian Prime Minister Stephen Harper defended his government's economic record through two recessions, a month before legislative elections and at a time when polls show his Tories neck and neck with center-left parties.

The two main opposition parties -- the leftist New Democrats and the centrist Liberals -- charged in a televised debate that the Conservatives have made the economy too dependent on raw materials, including oil.

"Mr. Harper put all of his eggs into one basket, then he dropped the basket," said New Democratic Party leader Thomas Mulcair.

The economy contracted in the first half of this year, posting the weakest figures since the 2008 global financial crisis.

But despite the plunge in oil prices it was announced this week that Canada -- the world's fifth-largest oil producer -- posted its first budget surplus since 2008.

Harper hailed the result as evidence his government's low tax and spend policies were delivering jobs and economic growth.

Seeking his fourth mandate in nine years, he urged voters not to support any shocks to a "fragile economy."

The New Democrats have vowed if elected to roll back Conservative tax credits and raise corporate taxes in order to pay for a national daycare program.

Justin Trudeau's Liberals are the only party to propose plunging Canada back into deficit to finance new transit and road infrastructure spending.

"Mr. Harper has not only the worst growth job creation record since World War II, his is the worst record on economic growth since the Great Depression," Trudeau blasted, adding that the economy needs a "kickstart."

There are currently 1.3 million Canadians out of work, wage rates have not kept up with inflation and household debt is at a record high.

Harper blamed external forces, saying: "We're not saying in this fragile global economy everything is great."

"Right now a portion of our economy is hard hit by the fall in oil prices. That concerns me," he said.

- 'Undignified, fear mongering' -

The nationally televised debate was held in Calgary, the focal point of Canada's oil industry.

The three party leaders exchanged barbs on the Trans-Pacific Partnership, immigration, soaring housing prices and the environment.

Mulcair appeared calm, needing to convince voters he can be trusted to steer the economy as his party vies for its first chance to govern.

The former lawyer was unapologetic about wanting to tax big business more: "Yes, Canada's largest corporations are going to start paying their fair share, and it's high time they did."

At the same time he chastised Harper for what he said was a muted response to the Syrian refugee crisis and for linking it to security concerns, calling it "undignified" and "fear mongering."

"Canadians want a prime minister who understands the sense of urgency that we all feel when we see the current crisis in Syria," Mulcair said.

Harper, who desperately needed to re-energize his campaign, stuck to his message of "keeping our taxes down and keeping our budget balanced."

He bashed the New Democrats' plan to introduce an emissions cap and trade system, saying: "Carbon taxes are not about reducing emissions. They're about raising revenue for the government."

In May, Canada announced it will aim to reduce greenhouse gas emissions by 30 percent below 2005 levels by 2030.

It is more ambitious than a previous goal but was panned by environmental activists as not going far enough and the weakest pledge of any industrialized nation ahead of a Paris climate summit in December.

Many groups have also criticized the government for not having a plan to reduce emissions from the oil sands -- the nation's largest source of CO2.

"That sector needs a government that is on its side," Harper said.