Amid Massive Debt Binge, Canada’s Economic Performance Lagged Countries That Spent Far Less

More evidence of the rampant incompetence of Liberal fiscal management.

Since 2019, Canada’s debt burden has dramatically increased.

The initial emergency payments to Citizens made sense when the pandemic began and the virus was unknown. If the government is making you stay home/shutting down your job/closing your business they should compensate you.

However, the Liberals decided to keep those ’emergency’ payments in place far longer than most other countries.

This resulted in a massive surge in Canada’s debt, as the Liberals embarked on an experiment in a quasi-universal basic income enabled by the Bank of Canada massively expanding the money supply.

The Liberals have claimed that the long-term payments were ‘necessary’ to save the economy and that Canada has benefitted economically from their actions.

The evidence says otherwise.

A new report from the Fraser Institute indicates that while Canada’s debt burden surged by the second-highest amount among 33 countries covered by the IMF (trailing only Japan), our economic performance was closer to the bottom of the pack:

“Despite Canada’s comparatively high debt accumulation during the pandemic, which many argued would result in strong economic performance, we actually underperformed most of our peers,” said Tegan Hill, economist at the Fraser Institute and co-author of The Accumulated Debt and Economic Performance of Industrialized Countries during COVID.

Based on data from the International Monetary Fund (IMF), the study finds that from 2019 to 2021, Canada had the second-highest increase in its gross debt as a share of the economy out of 33 countries.

The gross debt-to-GDP ratio increased from 87.2 per cent in 2019 to 112.1 per cent in 2021—an increase of 24.9 percentage points. Despite leading our peers in debt accumulation, Canada underperformed when it came to economic growth, ranking 23rd of 33 countries in 2020 with -5.2 per cent growth in the economy (inflation-adjusted) and 22nd in 2021.

“It’s interesting to note that despite the borrowing by Canadian governments, particularly Ottawa, our recession in 2020 was deeper and our recovery in 2021 weaker than most other industrialized countries,” commented Hill.


Massive spending also didn’t help Canada’s employment picture, with our nation among the higher end in unemployment rates in 2020 and 2021:

“Canada also did not out-perform its peer group by achieving lower unemployment during the pandemic. In 2020, Canada had the third highest unemployment rate (9.58%) out of 33 industrialized countries, and the 8th highest unemployment rate (7.43%) in 2021.”

Additionally, countries that both accumulated debt and countries that reduced their debt-to-GDP-ratio managed better economic performances than Canada when it came to GDP growth and unemployment rates:

“It is telling that the United States, which also had a marked increase in its gross debt relative to the size of the economy, markedly out-performed Canada on both measures in 2020 and 2021. Moreover, Ireland, which reduced its gross debt-to-GDP ratio, also outperformed Canada on both measures and, in fact, led the group of 33 industrialized countries in the growth of real GDP in 2020 and 2021.”

Rank incompetence

While it has been evident for quite some time that the Liberals are completely incompetent when it comes to the economy and fiscal policy, this report makes that even more clear.

In effect, the Liberals managed to simultaneously give out way too much money – making it possible for many people to accumulate government payments rather than working, while shutting down tens of thousands of businesses, keeping economically damaging restrictions in place far longer than many other countries, all while constantly raising taxes.

With the help of the Bank of Canada, the Liberal government artificially increased demand, reduced the incentive to work, limited the supply of goods, crushed the tourist sector, and imposed inflationary carbon tax hikes.

There is no universe in which those policies don’t result in rampant inflation and the destruction of our earning power, which is exactly what we are seeing today.

The absolute rank incompetence of the Liberals has caused so much damage to our economy that we will spend years digging ourselves out of the mess, and the path to recovery can only begin once the Liberals are defeated, since every additional day they spend in power wrecks our economy even more.

Spencer Fernando


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