(Releads with debate starting, quotes from leaders)
By David Ljunggren and Randall Palmer
OTTAWA, Sept 17 (Reuters) - Canadian Prime Minister Stephen
Harper, taking the offensive after an election campaign marred
by setbacks and missteps, on Thursday said his rivals would
badly damage the economy if they took power.
With polls showing a tight three-way race ahead of the Oct.
19 vote, Harper needs to break away from his two center-left
opponents if his right-leaning Conservatives are to have any
chance of extending their near 10-year term in office.
Harper has long portrayed himself as the only leader able to
handle a sluggish economy amid global weakness. This week
trumpeted the fact the federal budget had returned to surplus a
year earlier than predicted.
"The other parties are trying to tell us they will deal with
the challenges of our economy, of our labor market, of
international markets, by raising taxes and running deficits to
finance vastly increased amounts of spending," he told a
televised debate about the economy.
"That is not the way to protect our economy in this
environment," he said in often testy exchanges with New
Democratic Party leader Thomas Mulcair, 60, and Liberal leader
Justin Trudeau, 43.
Harper says Canada should stick to Conservative policies
designed to keep taxes low and attract investment. He brushes
off calls for more government spending.
The Liberals are proposing to run budget deficits for three
years to help finance a major national infrastructure program.
"Mr Harper wants to hit the snooze button while Mr Trudeau
is hitting the panic button," said Mulcair. His party - which
has never held power federally - said this week it would raise
the corporate tax rate. .
The debate, the second of the campaign, was sponsored by the
Globe and Mail newspaper.
It took place in Harper's adopted hometown of Calgary in the
western energy-producing province of Alberta, which has been
hard hit by slumping crude prices.
Mulcair accused Harper of relying far too much on oil
exports to buoy government finances. The price of crude has
dropped by more than half since mid-2014.
"Mr. Harper put all his eggs in one basket and then he
dropped the basket," he said.
Trudeau said Harper had presided over the worst growth rate
of any prime minister since the Great Depression.
"Canadians are worried about their jobs, and that's what
this election is about," said Trudeau.
Green Party leader Elizabeth May, who performed well in the
first televised encounter, was left off the roster and could
only offer commentary on Twitter (NYSE:TWTR).
(Editing by Bernadette Baum and Ken Wills)