Former prime minister Stephen Harper says Mark Carney is unfairly taking credit for the previous Conservative government’s economic record as he campaigns in the Liberal leadership race to replace Prime Minister Justin Trudeau.
In a letter to Conservative supporters emailed by the party, Harper says Carney, who served as governor of the Bank of Canada during the 2008 global financial crisis, did not oversee the day-to-day management of the economy during that time.
Rather, he says it was the late finance minister Jim Flaherty, whose record Harper seeks to defend in the letter.
“I have listened, with increasing disbelief, to Mark Carney’s attempts to take credit for things he had little or nothing to do with back then,” Harper writes.
“He has been doing this at the expense of the late Jim Flaherty, among the greatest Finance Ministers in Canada’s history, who sadly is not here to defend his record. But let me be very clear: the hard calls during the 2008-2009 global financial crisis were made by Jim.”
Flaherty died of a heart attack three weeks after he retired from Harper’s cabinet in 2014.
He served as finance minister for eight years and eventually balanced the budget by the time he left office through a series of spending cuts and other measures.
Flaherty also cut personal and corporate taxes — including lowering the GST to the current five per cent rate — and introduced the tax-free savings account during his tenure.
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Canada’s year-long recession was shorter and less severe than those experienced by the United States and many European nations.
Carney has said on the campaign trail that his monetary policies as head of the Bank of Canada at the time, including rapidly lowering interest rates, helped Canada weather the financial crisis better than other countries.
His campaign website states: “As Governor of the Bank of Canada during the 2008 financial crisis, Mark guided Canada through one of the most turbulent economic periods in modern history, protecting jobs and helping ensure that Canada came out stronger.”
Government and central banks have different scopes of the policies that they can implement.
Central banks are responsible for monetary policy, which deals with the supply of money and uses tools such as setting the overnight rate to influence interest rates and try to keep inflation within the one-to-three per cent target range.
Governments are responsible for fiscal policy, which deals with how governments use spending and taxation policies to influence the economy. Fiscal policy would include measures like creating new spending programs through budgets and legislation or setting tax rules or regulations.
Harper argues Carney’s experience is not with leading Canada’s economic response during the financial crisis, but in the advice he’s given to Trudeau’s government on issues long opposed by Conservatives, including carbon pricing, spending increases and blocking pipeline projects.
“Carney has advocated for every one of these bad ideas,” Harper writes.
The letter goes on to make the case for Conservative Leader Pierre Poilievre in the next federal election, which has yet to be called.
Carney is widely seen as the frontrunner in the Liberal leadership race, the winner of which will become prime minister after Trudeau steps down. A winner is set to be chosen on March 9 after voting from Liberal members.
Recent opinion polls have seen the Liberals’ fortunes shift dramatically since Trudeau announced his resignation in January, after suffering double-digit deficits against the Conservatives for years.
An Ipsos poll on behalf of Global News released last week found the Liberals with a slight lead over the Conservatives for the first time since 2021.
Pollsters say the chance for a new Liberal leader other than Trudeau and U.S. President Donald Trump’s economic threats against Canada have led to fewer Canadians seeking a change in government.
In response, Conservatives have sharpened their attacks against Carney, painting him as a continuation of Trudeau’s policies.
“Make no mistake, Mark Carney is just like Justin,” Harper wrote in his letter.
Carney has yet to comment publicly on Harper’s letter.
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Harper says Carney taking undue credit for Canada’s 2008 recession recovery
