UPDATE 2-Canada PM pledges rebound as recession rocks reelection bid

(Recasts with quotes from analysts, opposition)
By Leah Schnurr
OTTAWA, Sept 1 (Reuters) - Having staked his reputation on
strong economic management, Canadian Prime Minister Stephen
Harper has decided that the best way to win re-election when the
headlines say recession is to convince the country it is no
longer in one.
Tuesday brought the worst kind of news for a prime minister
campaigning for a rare fourth term in office: government data
that confirmed Canada's economy contracted for the second
quarter in a row, the technical definition of recession.
But Harper shrugged off the data from the first half of the
year, saying Canada had a "couple of weak months," and pointed
to June growth numbers that suggest the future is brighter than
the past.
"The Canadian economy posted very strong growth in June.
Strong growth is expected for the balance of the year ... (and)
we will have good growth prospects for the years to come," he
told reporters during a campaign stop in Burlington, Ontario.
To be sure, the June rebound also spurred some economists to
predict growth would return in the third quarter.
While Harper has been quick to argue that the slump in
Canada's energy sector is due to global forces beyond his
control, the risk is voters will blame the incumbent as they
head to the polls Oct. 19.
"Governments do poorly historically when going to the polls
in or soon after a recession, regardless of whose fault it is,"
said Robert David, an economist and professor of social sciences
at the University of Ottawa.
In a tight three-way race between Harper's right-leaning
Conservatives and two center-left opposition parties, the
economy has emerged as a defining issue. Harper has presented
himself as the steady hand on the tiller; his opponents argue
he's the one who sank the ship.
"Mr. Harper keeps repeating that his plan is working, but
this is the second recession he's had," Liberal leader Justin
Trudeau said during a campaign stop in Quebec.
New Democratic Party (NDP) leader Thomas Mulcair said the
numbers showed Harper's plan wasn't working and Canada was ready
for change.
A recent poll by Ipsos put the left-leaning NDP ahead with
33 percent support, followed by the Liberals with 30 percent and
the ruling Conservatives with 29 percent.
"The announcement today is not helpful for the prime
minister, but the mood of Canadians about the economy was
already darkening - and a darkening mood was definitely
weakening the prospects for the Conservatives," said Bruce
Anderson, chairman at pollster Abacus Data.
The recession that has gripped the country has been felt
most acutely in the resource-rich western province of Alberta,
which elected a left-leaning NDP government in May to end a
44-year Conservative reign - a grim harbinger for Harper.
Manufacturers in Ontario, the most populous province, have
also felt the pinch, with many employers too uncertain to invest
and boost jobs. Voters in Toronto and Vancouver are also
struggling with record housing costs.
An Abacus poll ahead of the GDP report showed 59 percent of
voters thought the economy was in poor health, while 41 percent
said it was in good shape.
Both opposition parties have accused the Conservatives of
focusing too narrowly on the energy industry, leaving the
country overly dependent on oil.
With recession dominating the headlines, the parties are now
trying to convince voters they have the best solution: spend and
stimulate, keeping the federal budget in deficit for a few more
years, or tough fiscal discipline to guard a balanced budget.
Trudeau is the farthest out on a limb in terms of backing
stimulus. The son of former Prime Minister Pierre Trudeau
announced last month he would run deficits and use the money for
a national infrastructure program - a plan Harper has derided as
foolish and risky.
Both the Conservatives and the New Democrats have said they
will balance the budget, though Harper's forecast for a balanced
budget this fiscal year has been challenged and the NDP has also
made a number of spending promises.