Conservative Party leader Pierre Poilievre sat perched on a riser in January with Jordan Peterson in a factory-style setting with concrete beams and supported steel window panes checkering the walls.
Using a wooden shipping crate as a coffee table, the politician and controversial psychologist talked for nearly two hours about the challenges facing Canada’s working class.
During the conversation, Poilievre said that “inflation is the single most immoral tax” and claimed the federal government sparked the rise in prices when it ordered the Bank of Canada (BOC) to print more money.
The claim
Poilievre discounted the usual suspects for the increase in the cost of living.
“You blame the grocer because groceries are more expensive, or your local gas station because gas is more, or your realtor,” Poilievre told Peterson. “But in fact, it was actually the government that bid all of those things with money printing, and you didn’t even know about it.”
During his run for the leadership of the Conservative Party, Poilievre repeatedly claimed Canada’s central bank sparked inflation when it printed money to finance federal spending.
But what is money printing? Can the government even do it?
And does it cause inflation?
The Calgary Journal turned to an economist to help answer those questions.
Breaking down the claim
Berhanu Kebede teaches economics at Mount Royal University (MRU). He says that while the federal finance minister works with the BOC to manage the nation’s economic health, only the central bank is responsible for ensuring quality banknotes — the money people carry in their wallets — are produced and borrowed.
The federal government doesn’t actually “print money,” stressed Kebede.
Poilievre also told Peterson in their interview that Canadians didn’t vote for the approval of money printing.
This lack of opportunity, he said, goes against Canada’s parliamentary system because “people must not get taxation without representation,” saying this caused inflation to be “adopted secretly.”
Kebede says the federal government does not, in fact, require voters’ consent.
When Poilievre started making these claims, the Bank of Canada took the rare step of refuting the fact that it actually prints money on X (formerly Twitter).
“We bought existing gov’t bonds from banks on the open market. Why? This helped unblock frozen markets at the start of the pandemic. It let households, companies and governments access funding when they really needed it,” said the BOC in a post.
“We did not print cash to pay for the bonds,” the central bank added.
Quantitative easing explained
When pandemic restrictions were well underway, the BOC took a quantitative easing approach. To help make it easier for Canadians and businesses to borrow money, the central bank sometimes purchases government bonds to raise “their price and lowers their return — the rate of interest they pay to bondholders.”
“There’s always been this expression of the bank printing money whenever they engage in these kinds of policies, but it’s not actually what happens,” Jeremy Kronick, the director of Monetary and Financial Services Research at the C.D. Howe Institute, told CBC News in 2022.
Kebede says Poilievre’s statement is inaccurate because he can’t remember a time in Canada’s history when this so-called money printing caused inflation.
During periods of global instability —like the pandemic, which triggered unemployment and recession— Kebede said developed economies like Canada, the United States, and Europe use quantitative easing to help boost sluggish economies.
Kebede says it’s a good thing.
“If you have a powerful economy, you can just press the button, and there’ll be money for everyone,” said Kebede. “If we have that kind of system, why don’t we print it when we have a problem?”
Bank of Canada pushes back on misinformation
In a series of X posts, the BOC stated that it did not produce additional banknotes to pay for the government bonds three years ago.
As the BOC explained in the thread, these settlement balances “don’t permanently add to the money supply” and “unlike cash, we can remove those reserves from the system.”
At the time, deputy governor of the BOC, Paul Beaudry, described how the COVID-19 response of buying Government of Canada bonds helped rejuvenate the economy by lowering interest rates. Ultimately, this made borrowing costs more affordable and ensured consumers and companies had the credit to stay afloat amidst mass job loss and financial disruption.
Most economists blame post-pandemic inflation on supply chain problems, higher energy, food, mortgage interest and rental costs.
Some research suggests quantitative easing “generates more inflation than conventional monetary policy,” but other studies concluded the opposite.
After a couple of years of stubbornly high inflation, Canada’s CPI rate has dropped back to the preferred two percent since last August, according to the BOC.
Warning it’s too soon to know if today’s high inflation rates are the direct cause of the BOC’s pandemic response, Kebede calls Poilievre’s claims misleading.
Misinformation or political strategy?
However, Duane Bratt, a political science professor at MRU, said Poilievre’s statements should not be taken literally.
Bratt taught Poilievre in the early 2000s during his undergrad at the University of Calgary. He considers Poilievre’s choice to call inflation a tax a metaphor, describing the similarity between how inflation and taxes impact consumers.
Poilievre coined “JustinFlation” to describe what he considered to be Trudeau’s failures following pandemic restrictions. Yet, Bratt noted that the post-pandemic economic demand was not unique to Canada’s Liberal government.
“We had inflation all around the world…that was not because of Justin Trudeau,” said Bratt.
From a political strategy standpoint, Bratt said Poilievre is “very politically astute” when linking taxes — something viewed poorly by the public — to inflation allegedly caused by the former prime minister, Trudeau.
“People don’t like taxes,” said Bratt. “So calling it a tax makes it more powerful.”
Bratt credits Poilievre’s political success to his focused message about the high cost of living and even who he talks with.
“Jordan Peterson is loved by Conservatives,” said Bratt. “He has a wide audience, and that’s why Poilievre went on there.”
The former University of Toronto psychology professor gained media attention in 2016 after publicly disputing gender neutrality and refusing to use his students’ preferred pronouns.
Peterson sparked further controversy when he attacked Canadian human rights legislation, which “gave him sympathy amongst the Conservative movement,” said Bratt.
While discussing Canada’s economy, from housing to the energy sector, Peterson summarized his conversation with Poilievre in the video’s description by writing that they discussed “how Justin Trudeau has walked the country off of a cliff.”
Since becoming leader, Poilievre’s political rhetoric has focused on attacking Trudeau’s carbon tax.
But Bratt predicts this strategy could backfire amidst recent tariff threats from the U.S.
When Trudeau resigned as prime minister in early January, Poilievre’s Conservatives’ nearly two-year lead in national polls seemingly vanished.
U.S. President Donald Trump’s 25 percent tariffs on Canadian goods diverted attention away from Poilievre’s “axe the tax” political message.
“The problem with Poilievre is that’s no longer going to be the ballot box issue,” said Bratt. “It’s now going to be about dealing with Trump, and Poilievre doesn’t quite know how to handle that.”
The Calgary Journal asked Poilievre to comment on this fact-checking report. We did not hear back before our deadline.
The accuracy of “money printing” claim
While Poilievre’s metaphorical “inflation tax” may have been clever political rhetoric—a vote winner—before Trump slapped tariffs on Canada, evidence shows that the Conservative Party leader’s claims that the federal government’s supposed “money printing” caused inflation are misleading.
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