UPDATE 1-Canada concerned by stock market slump - PM aide

 

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LAVAL, Quebec, Oct 6 (Reuters) - The Canadian government is concerned by the slump in the Toronto stock market, which at one point on Monday fell more than 10 percent, the chief spokesman for Prime Minister Stephen Harper told Reuters.

The remarks were the most serious expression of worry on behalf of Harper, who has said he is optimistic that Canada will survive the crisis without going into recession.

"What we're seeing in the stock market is obviously concerning to Canadians. It's concerning to the government as well," said Harper spokesman Kory Teneycke.

Harper -- campaigning ahead of the Oct 14 general election -- says only his ruling Conservatives can be trusted to manage the economy as the world financial crisis grows.

"We are proposing targeted spending measures in areas of our economy that need a boost but we're not proposing wild spending initiatives that would risk attacking our economic fundamentals by driving Canada into deficit," said Teneycke.

He criticized the Liberal Party's plan to introduce a carbon tax, saying that would further pummel the stocks of energy firms and other commodity companies.

"If the global economy slows down, then demand for some of these commodities will soften -- I think that's part of what's leading this (slump)," he said.

The Liberals have promised that the carbon tax -- aimed at cutting greenhouse gas emissions -- would be offset by cuts to income taxes and other fiscal measures. They have sharply criticized the Harper government for doing little or nothing to offset the effects of the financial crisis. (Reporting by David Ljunggren; editing by Rob Wilson)