Federal leaders spar on economy, balanced budgets

A global stock market slide and the falling loonie have shifted the campaign conversation to the economy and drawn a new battle line on the left over which leader will or won't run a deficit.

Liberal Leader Justin Trudeau said his plan is to "grow our way out" of deficit by investing in programs for the middle class, but would not commit to any timeframe for when he would balance the budget.

Meanwhile, Conservative Leader Stephen Harper took pokes at both leaders, warning that neither the NDP nor the Liberal Party can be trusted with the nation's finances.

• Analysis: Leaders' tours offer a glimpse at campaign strategies
• Trudeau accuses Mulcair of 'austerity' while Harper urges sticking to his economic plan

Trudeau accused NDP rival Tom Mulcair of making big promises he can't afford, and again warned that the NDP would wind up ushering in "austerity" measures.

"He needs to come clean with Canadians which promises he's made are now off the table because of his commitment to balance the budget in a recession, which will take the money out of pockets of Canadians and quite frankly, his poor economic policy in a time of recession," Trudeau said during a campaign event in Newmarket, Ont.

Trudeau also took a shot at the Conservative leader, accusing Harper of promising to balance the books while running eight consecutive deficits.

"You just have to look at recent history. Conservatives run deficits, Liberals know how to grow the budget into balance," he said.

Mulcair's plan is to scrap the Conservative income-splitting program and increase corporate taxes to pay for a $15-a-day child-care program and tax breaks for small business.

But he insisted the NDP program will be implemented without going into the red.

"We've been categorical. We will not be running a deficit," he said during a campaign stop in London, Ont. "No, we will not be entertaining any thought of that. Our choices are different from Mr Harper's. We will not be running a deficit."

Harper takes shots at rivals

Continuing his campaign in Ontario on Wednesday, Harper again warned the economy would be "ruined" if either the Liberals or the New Democrats formed government in October.

They say they'll balance the budget but the real plan is they will bring in an avalanche of tax increases.- Stephen Harper on opposition leaders Tom Mulcair and Justin Trudeau

"Justin Trudeau now says, now that's he's realized that budgets won't balance themselves, he says he's just given up trying," he said. "He's just going to run deficits all the time anyway. And we know what the NDP plan is. They say they'll balance the budget but the real plan is they will bring in an avalanche of tax increases that in theory will balance the budget and in reality wreck the economy."

Green Party Leader Elizabeth May, who weighed in on the deficit debate on Tuesday, said austerity measures to eliminate a small deficit are "shameful and bad economics" if the country is teetering near a recession. A $1-2 billion deficit in a $2-3-trillion economy is "not a big deal."

"Running deficits to ensure we stay healthy as an economy is sensible," she said during a campaign event in Burnaby, B.C.