Liberal management of government finances contrasts sharply with Poilievre’s lies about mismanagement

Canada’s fiscal position is among the strongest in the developed world, according to the International Monetary Fund . . . Poilievre’s claim of Canada's "lost decade" under Liberal mismanagement of the economy is an extreme distortion of reality.

 

By Fareed Khan

 

Since long before the federal election was called Canada’s political landscape has been a battleground for competing economic narratives, with Conservative Leader Pierre Poilievre repeatedly claiming that the Liberal government, under former prime minister Justin Trudeau and his economic advisor Mark Carney, has mismanaged the nation’s finances for the past decade.  These outrageous claims, however, crumble under further scrutiny.

 

Canada boasts one of the strongest debt-to-GDP ratios among G7 and G20 nations, a testament to prudent fiscal management by the Liberal government.  The debt incurred by the government of Justin Trudeau over the past decade, particularly during the COVID 19 pandemic, was not reckless spending but a necessary investment to safeguard Canadians and the nation’s economy.  If one looks objectively at Canada under Liberal rule since 2015, and then looks at the claims made by the Conservatives, it will reveal that the Liberals have a superior economic record when compared to the previous decade under the Stephen Harper’s Conservatives.   It also raises the question of whether Poilievre, with no experience outside politics, is equipped to manage Canada’s finances compared to Liberal Party leader Mark Carney, someone who has actually been a key player in managing a nation’s finances during global crises.

Canada’s fiscal position is among the strongest in the developed world.  According to the International Monetary Fund (IMF), Canada’s net debt-to-GDP ratio in 2023 was 13.1%, the lowest among G7 nations and significantly below the G7 average.  By 2024, the IMF projected Canada’s general government deficit at 2.0% of GDP, tied with Germany for the lowest in the G7.  For context, the gross debt-to-GDP ratio, often cited by critics, stood at 104.7% in 2023.  But this figure includes pre-funded pension obligations like the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP).  Net debt, which subtracts financial assets set aside for these obligations, provides a clearer picture of fiscal health, as it reflects liabilities not covered by existing assets.  Canada’s low net debt-to-GDP ratio underscores its fiscal resilience compared its peer nations in the G7.

This strength is not a fluke but a result of deliberate policy decisions.  Canada’s AAA credit rating from Moody’s and DBRS reflects global confidence in its ability to manage debt, securing lower borrowing costs and long-term stability despite massive spending during COVID.  Among G20 nations, Canada’s fiscal position is equally robust, with only a few resource-rich economies like Saudi Arabia occasionally surpassing it due to commodity windfalls.  The Organisation for Economic Co-operation and Development (OECD) confirms that Canada’s debt metrics remain sustainable, projecting stable debt-to-GDP ratios through 2030, even under conservative growth assumptions.

Canada’s fiscal record under the Trudeau government (2015–2025) outshines that of Conservative governments, particularly under Stephen Harper (2006–2015).  When the Liberals took office in 2015, Canada’s net debt-to-GDP ratio was 31%, a legacy of Harper’s tenure, which included deficits during the 2008 financial crisis and in the years that followed.  By 2019, before the COVID pandemic, the Liberals had reduced this to 14.8%, demonstrating fiscal discipline during economic expansion.

The COVID 19 pandemic necessitated unprecedented levels of government spending.  From 2020 to 2022, the federal government implemented the Canada Emergency Response Benefit (CERB) and wage subsidies which supported seven million unemployed Canadians and prevented economic collapse.  This deficit spending, which peaked at $407 billion in 2020–2021, which the Conservatives label as “mismanagement” was a lifeline to individuals and businesses across Canada that prevented a massive economic downturn.  The IMF estimated that without these government measures Canada’s GDP could have contracted by an additional 7–10%, and unemployment could have reached 20%.  However, by 2023, the deficit had fallen to 1.4% of GDP, and the debt-to-GDP ratio stabilized, reflecting a swift recovery.

Contrast this with Harper’s response to the 2008 crisis.  His government’s stimulus was heavily skewed toward tax cuts (which primarily benefitted higher income earners) and infrastructure spending, with less focus on direct income support to individual Canadians or businesses.  The deficit reached 3.6% of GDP in 2009, and recovery was slower, with debt-to-GDP peaking at 32.1% in 2010.  Harper’s subsequent austerity measures slowed growth and strained provincial finances, resulting in an average annual GDP growth rate of 1.6% during the Harper years, which was worse than all previous governments since World War Two.

Consequently, Poilievre’s claim that the Liberals have mismanaged the economy is a distortion of reality.  He points to the doubling of gross federal debt under Trudeau but ignores the context that it grew largely because of COVID 19 support programs.  The World Trade Organization (WTO) notes that Canada’s trade balance remained stable post-COVID, with exports growing 5.2% annually from 2021 to 2023, undermining claims of economic weakness.

Poilievre’s assertion that Liberal policies caused inflation is equally misleading.  The Bank of Canada attributes post-COVID inflation, which peaked at 8.1% in 2022, to global supply chain disruptions and energy price spikes, not domestic spending.  Canada’s inflation was mid-range among G7 nations, and by 2024, it had fallen to 2.5%, aligning with the Bank of Canada’s target.  Poilievre’s focus on gross debt figures, without acknowledging assets like CPP investments, manipulates data to paint a dire picture.  The IMF’s net debt metric reveals Canada’s true fiscal strength, a fact Conservatives conveniently ignore for political gain their effort to portray government finances as far worse than they actually are.

This raises the question of competency when you compare Poilievre to Carney.  As Canada faces economic challenges, brought on by US tariffs under President Donald Trump, the question of leadership is paramount.  Poilievre, a career politician with no experience outside of Ottawa’s political bubble, lacks the knowledge or understanding to navigate complex fiscal crises.  His policy proposals, such as deep tax cuts costing $75 billion, and increasing defence spending to 2% of GDP (an increase of over $40 billion over 2025 spending), and his overly optimistic projections of savings and economic growth, risks structural deficits without clear funding mechanisms.  His rhetoric, while appealing to a minority of voters, offers simplistic solutions — cutting taxes, red tape consulting fees, and foreign aid, etc. — that fail to address systemic issues like tackling trade diversification, funding Canada’s commitment to addressing climate change, and funding policies that will substantially increase affordable housing.

Carney, by contrast, has a record as an economic steward.  As Governor of the Bank of Canada (2008–2013), he was instrumental in being a key player guiding the country through the 2008 financial meltdown.   With his counsel the Canadian government maintained economic stability while peers like the US faced banking collapses.  His policies, including low interest rates and targeted stimulus, ensured Canada’s GDP contracted by only 2.8% in 2009, compared to 3.5% in the US.  Additionally, as Governor of the Bank of England (2013–2020), Carney managed the Brexit fallout, stabilizing the pound and the UK economy.  His experience dwarfs Poilievre’s, making him the clear choice to counter Trump’s tariffs and strengthen Canada’s global position.  

Canada’s fiscal health cannot be seen in the context of a maxed-out credit card, which is an analogy that Conservatives like to use, but rather as a strategic investment in its people and future.  The Liberal government’s record — low net debt, solid growth, and effective crisis response — stands in stark contrast to the Conservative record under Harper and Poilievre’s untested promises.  The government’s spending in response to COVID 19 was not a failure but a success, preserving jobs and businesses.  As Canadians weigh their options, they must ask: can Poilievre, with no real-world economic experience, match Carney’s proven leadership?  The data says no.  Canada’s fiscal strength, built by Liberal policies, is a foundation to build upon, not a myth to be dismantled based on the lies, misinformation and manipulation of a party leader who seems to be more interested in gaining power than doing the right thing of all Canadians, and not just those who support him.

 

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