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Stephen Harper begins his second term of office today facing a political challenge that has not been seen in this country since the early 1980s and 1990s: governing in a period of slowing economic growth and rising anxiety.

But unlike Pierre Trudeau and Brian Mulroney before him, he needs to navigate these fast and dangerous waters without the benefit of a parliamentary majority, while also being hobbled by a vow to keep out of deficit.

He will have move decisively and deftly if his government is going to avoid the same fate as the Liberals of 1984 and the Conservatives of 1993, both of which lost badly in elections after recessions. That means overturning the notion that he is unsympathetic to the economic fears of Canadians and staying in step with other Western leaders who are intervening in their economies.

To be certain, there are differences from the governments that ran Canada during the recessions of the 1980s and 1990s. Unemployment was in double digits back then and governments were already in deficit before the recessions hit. But when confronted by shrinking revenues, the governments of the day let the deficit balloon in a classic Keynesian response to cushion the economic blow.

Will Mr. Harper, who spent much of the campaign insisting the economic fundamentals are sound in Canada, be willing to do the same?

If revenues begin to drop, some experts say the PM should throw away his play book, and condition voters to the possibility that a short-term period in the red is the most welcome of a number of bad options.

“We have taken it almost to the point of sickness in Canada that you can't run a deficit,” said Don Drummond, chief economist at TD Bank Financial Group who was a federal Finance official during the turbulent early 1990s.

“We almost seem more interested in the deficit than we are in jobs and income growth, which is pretty bizarre.”

Given the current financial crisis, the federal Finance Department is almost certainly looking at a far more sobering set of books today than when the budget was released earlier this year, with a projected surplus of $2.3-billion.

The first economic decision facing Mr. Harper concerns his election promises. Even though the promises are modest, sources say they are prepared to delay their introduction until late in the mandate if a recession threatens.

But that may well be the easy part. Should Mr. Harper choose to stick with his vow not to run a deficit, he could be faced with the unfortunate choice to either cut spending or raise taxes.

But he has surprised Canadians before, and he could change his mind.

One way to prepare the public for such a shift on the deficit would be to adopt a trick that he has used in the past: change ministers.

If Mr. Harper feels the need to change his message on the economy, the perfect occasion presents itself with the building of a new cabinet and the replacement of Jim Flaherty. Mr. Flaherty was criticized last week for comments about the capital reserves of two unnamed banks at the height of the financial crisis and a move would not be a surprise. A less combative choice would be the discreet Industry Minister, Jim Prentice.

Another move the Tories are considering is a quick recall of the House of Commons. One senior Tory said a new Speech from the Throne would be cautious, but would also signal to Canadians that it will be flexible where needed.

There are risks though, if Mr. Harper is seen to be out of step in a world that has come to accept public intervention. A potential contrast will be on display later this week, when Mr. Harper attends the Francophonie summit in Quebec City with France's Nicolas Sarkozy, who has injected $491-billion into the banking system.

Finally, a slow response carries the threat that Mr. Harper will cede the initiative to the opposition.

“Does Stephen Harper want to go to the electorate with a stance that says ‘We're in economic straits but we're just going to stay the course?' ” asked Peter Woolstencroft, a political scientist at the University of Waterloo. “Or does he say, ‘We've cleared off a lot of debt over the past few years during good times. These are bad times and we're going to add some [debt].' ”