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RICHMOND, British Columbia (Reuters) - Canadian Prime Minister Stephen Harper, battered over his response to the worldwide financial crisis, acknowledged on Thursday he could lose next Tuesday's election he looked set to win handily only two weeks ago.
Until the global problems struck, polls showed the governing Conservatives would retain power with a chance of turning their parliamentary minority into a majority.
As the crisis struck home and Canadians saw their stock portfolios take a beating, Harper said initially they should not panic. Opposition parties said that showed he was out of touch with voters' concerns and the Conservatives started to slide in the polls.
"I've said from the outset that I believe this is a close election that can go any way ... we were behind in the polls two weeks before this election began," a somewhat subdued Harper told supporters at a rally in British Columbia.
Opinion polls show the Conservatives between 4 and 11 percentage points ahead of the official opposition Liberals. The Conservative lead has grown a little in the past couple days but it is a much tighter race than earlier in the campaign.
Liberal leader Stephane Dion, long mocked by the Conservatives as being too weak to be a leader, is proposing a carbon tax to cut greenhouse gas emissions -- the cost of which he says would be offset by income tax cuts. Harper says the tax will trigger a recession.
"There will be one of two outcomes. There will either be Prime Minister Dion who will tackle our economic problems by increasing spending that we can't afford and increasing taxes to pay for it," said Harper.
"Or (there will be) our government which will keep spending under control and keep taxes going down. ... Do Canadians want, at a time of economic trouble, to take economic policies which common sense tells us will drive us into recession?"
Harper later cited a botched interview Dion gave to ATV television in Atlantic Canada on Thursday as an example of why the Liberal leader could not be trusted to manage the country.
A tired-looking Dion, asked what he would have done to help the economy if he were already prime minister, misunderstood the question repeatedly and twice asked for the interview to be started again.
"When you're running a C$15 trillion economy, you don't get a chance to have do-overs, over and over again. ... What this incident indicates very clearly is that Mr. Dion and the Liberal Party really don't know what they would do about the economy," Harper told reporters in Winnipeg, Manitoba, after a political rally.
"I don't think this is a question of language at all. The question was very clear and was asked repeatedly," he said.
Dion's first language is French and he can find it hard to make himself understood in English. He said on the first day of the campaign that he suffered from a hearing disorder.
"This is a shameless attempt to embarrass Mr. Dion, who has a slight hearing impairment. Whatever happened to ethics?" said Liberal spokesman Mark Dunn.
In Halifax, Dion was asked to comment on the fact that Harper had referred several times to the possibility of a Prime Minister Dion.
"It's because I think he realized -- " Dion said before interrupting himself. "I will agree with him on something: there's a choice between him and me as prime minister, and I call on all Canadians that don't want Stephen Harper to vote for me."
Additional reporting by Randall Palmer; Editing by Peter Cooney