On Tuesday, Stephen Harper talked to Finance Minister Jim Flaherty about the European debt crisis. Bank of Canada governor Mark Carney was there too. As Harper spokesman Andrew MacDougall explained later, this is “standard practice.”

Yet the government went out of its way to publicize the meeting. And the mere fact that it occurred (although not what was said in it) topped television newscasts.

What’s going on?

The answer seems to be that the Prime Minister is continuing to soften up the public — and his own Conservative party — for a shift in economic direction. Exactly what this shift will entail is murky, perhaps even to the government itself.

But what does seem clear is that the deteriorating world economy has made untenable Harper’s election promise that he could balance the federal budget by 2014 without affecting significant programs like health care and without cutting transfers to the provinces.

That’s because the anemic U.S. economy and Europe’s debt crisis threaten Canadian exports, Canadian jobs and therefore Ottawa’s tax revenues.

And this in turn means that Harper will either have to postpone his target for reaching a balanced budget or — if he sticks to his current timetable — make more draconian spending cuts. (He could raise taxes too, but that’s most unlikely.)

So far, government signals have been decidedly mixed. In the Commons last week, Flaherty pledged to meet his deficit targets, saying, “We are going to stay the course and go back to a balanced budget.”

And then, a few minutes later, he promised to be “practical and flexible” if the crisis in Europe and America hits Canada.

“We would act as we have acted before,” he said — an apparent reference to the government’s 2009 U-turn, when it decided to temporarily abandon balanced-budget orthodoxy and spend to stimulate the economy.

The most logical path for the Prime Minister — and the one recommended by the International Monetary Fund — would be, at the very least, to put off deficit reduction.

Last week, the influential multinational agency warned that if the world is to avoid another catastrophic recession, countries with manageable debts, such as Canada, should postpone plans to balance their budgets.

Canada’s government, the IMF noted, has “policy room to pause (in its deficit reduction strategy) if downside risks to growth keep rising.”

In plain language, that means that Ottawa should be prepared to put its balanced budget fixation on hold until Canada’s economy and that of the world improve.

Harper’s political problem, however, is that a good chunk of his party and caucus are adamant about eliminating the deficit.

That was evident when British Prime Minister David Cameron spoke to Parliament last week. The official video of the occasion shows Conservative MPs and senators applauding wildly every time Cameron talked about his hard-nosed spending cuts.

In 2008, when Harper last strayed from the party’s balanced-budget mantra, many Conservatives were grumpy. Some senior party members even began muttering about a putsch.

Given Harper’s election triumph in May, such talk is improbable now. Still he knows from the experience of Brian Mulroney’s Progressive Conservatives what can happen when a party’s leadership strays too far from its base.

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For the Prime Minister, November’s G20 summit promises to be critical. Last year, under Harper’s prodding, the world body urged member states to halve their deficits by 2013. But the G20 has taken its cue from the IMF before. And if the group’s consensus this year is that solvent countries like Canada should slow their efforts at fiscal retrenchment, the Prime Minister will be granted political cover.

Assuming, that is, that he wants to use it.

Thomas Walkom’s column appears Wednesday, Thursday and Saturday.

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