In a recession, government revenues fall with declining economic activity. In this economy, the more we try to cut funding to avoid a deficit, the larger the recession will become and the larger the deficit will be.
An effective stimulus will increase economic activity, which will increase government revenue and result in a smaller deficit.
Increased government spending is currently the most effective way to stimulate the economy. If we didn't have near-zero interest rates we could rely on monetary policy to stimulate the economy. Monetary policy is usually just what's wanted. But now that we're in a liquidity trap, monetary policy is ineffective. The IMF says, "the room for further monetary easing—at least in a traditional sense—is shrinking: in some countries, policy interest rates are approaching zero. Moreover, the effect of lower interest rates on demand is weakened by the disruption in credit markets."
In the words of Paul Krugman, Harper is being a Herbert Hoover.
There are two types of deficit: structural and temporary. Structural deficits are like the deficits that Brian Mulroney gave us: they are situations where government spending exceeds its revenue year after year, even in boom times. Jean Chretien and Paul Martin worked hard to rid Canada of structural deficits, and we do not now have one at the federal level. Temporary deficits are not problems in the same way structural deficits are, and if they are used to effectively stimulate the economy, they can actually avoid structural deficits.
For a more wonkish explanation of the deficit implications of fiscal stimulus, see here.
Fiscal Stimulus Part 1
Fiscal Stimulus Part 2: Size
Fiscal Stimulus Part 3: Federal Spending v Tax Cuts