POLITICS

Harper: Canadian Economy Ready To Respond To 'More Serious Circumstances'

08/24/2015 11:29 EDT | Updated 08/24/2016 05:59 EDT

DRUMMONDVILLE, Que. — As turmoil gripped stock and commodity markets around the world Monday, Stephen Harper insisted the Canadian economy has the "tools" it would need to fend off the escalating threat of global instability.

The Conservative leader's comments appeared to acknowledge that a serious economic situation remains a possibility.

Harper's remarks came as the federal election campaign rolled into its fourth week in front of an increasingly gloomy economic backdrop.

On Monday, markets plunged, the Canadian dollar sank to its lowest level in more than a decade and crude oil prices — a critical component of the country's economic health — slipped below $40 per barrel for the first time in six and a half years.

The problems have already arrived on Canadian shores, where the economy shrank during the first five months of 2015 and tumbled closer to the edge of a technical recession.

"We have a range of tools with which we can respond were we to face some obviously much more serious circumstances," Harper said during a news conference at a campaign stop in Drummondville, Que.

"I don't speculate on more serious circumstances."

He said the hobbled Canadian economy would be able to withstand a global downturn thanks to its strong banking system, low level of public debt, lower taxes and his government's insistence it will balance this year's budget.

Widespread pocketbook concerns are right in Harper's campaign wheelhouse; an economist by training, his party and his government have long championed themselves as sound managers of the economy.

That message, however, has been strongly disputed by critics who note the Harper government has run seven — and could be closing in on eight — straight deficits.

The bad economic news Monday also helped Harper avoid another barrage of questioning related to the politically damaging testimony that has emerged at the ongoing trial of Sen. Mike Duffy.

Harper's campaign has tried to steer the pre-election discourse back to the economy.

The prime minister even took part in a 25-minute

question-and-answer session about the economy Monday with Richard

Voyer, the executive vice-president of a manufacturer that produces

waterproofing products.

Harper told his interviewer in French that his party wants to "garder le cap," a phrase he repeated several times Monday during campaign stops in Quebec. It translates to "stay the course."

Relying on lines from his well-worn stump speech, Harper urged voters to stay away from the economic strategies of his opponents and noted how forecasters predict the economy to resume growing this year.

"The most important thing facing this country are economic challenges because we are living in an unstable global economy," he later said.

The 2015 campaign conjures memories of the lead-up to the 2008 federal election, a time of deep concern about the state of the world economy.

The so-called Great Recession struck shortly after Harper — who had denied during the campaign that a crisis was on the horizon — was re-elected.

"My own belief is if we were going to have some kind of crash or recession, we probably would have had it by now," Harper said in September 2008.

He followed it up the next day by saying, "The Canadian economy's fundamentals are solid."

On Nov. 29, 2008, six weeks after his re-election, Harper was sending a much more dramatic message.

"The financial crisis has become an economic crisis," he said at the time. "The world is entering an economic period unlike — and potentially as dangerous as — anything we have faced since 1929."

Politically, the stock slide couldn't have come at a better time for the Conservatives, who were anxious for a channel-changer big enough to overtake Duffy. Not only did it prompt questions better suited to Harper's preferred narrative, it offered a pointed reminder that he's still the man in charge.

On Monday, the Prime Minister's Office said in a statement that Harper spoke by phone earlier in the day with Bank of Canada governor Stephen Poloz about external economic threats — and how they could affect Canada.

The PMO said they discussed sliding commodity prices, sinking stock markets and growth slowdowns in China and emerging markets.

Conservative Party spokesman Kory Teneycke said Harper phoned Poloz following his morning news conference in Drummondville.

He declined to discuss what Poloz told Harper, but he underlined how the prime minister is closely monitoring the situation in China, where problems have bled into North American markets.

"It's a concern," Teneycke said.

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