Harper, who had faced election criticism for being slow-footed on the economy, took the initiative yesterday, unveiling a six-point strategy and declaring that the number one job for the prime minister is to protect the country's economy, "our earnings, our savings and our jobs."

And on a day when stock markets again posted dramatic drops, Harper hinted that Ottawa may be taking further steps to protect the banks.

"We're looking at constantly what needs to be done to ensure the availability of credit for Canadians, Canadian businesses, families, individuals," Harper told reporters in Calgary.

"I won't go through the options we are looking at but let me just say the options we're looking at do not involve significant outlays of taxpayers' money," Harper said.

His comments came as a report from a Merrill Lynch economist suggested Canada risks running a $10 billion deficit in the 2009-2010 fiscal year.

With a credit crunch squeezing banks and consumer lending, and reported discussions about further measures to shore up the banking system, providing loan guarantees or other measures of support, Harper said Ottawa is watching what other governments are doing to prop up their financial institutions. More...