After enjoying decades of relatively low and stable inflation rates, Canadians spent the year 2022 grappling with the highest inflation levels seen in nearly 40 years.

With the rising cost of living exacerbating existing affordability concerns, politicians raced to point fingers at what – or who – they believed was really causing the problem.

Sometimes, those fingers pointed at Prime Minister Justin Trudeau and the federal Liberals, with Opposition Leader Pierre Poilievre saying in the House of Commons in November in French: “The more the government spends, the more Canadians pay. That’s why we have the highest inflation rate in 40 years.”

The Conservatives, led by Poilievre, insisted that government spending was the cause of rising inflation. Meanwhile, the New Democrats say greedy companies are responsible for raising prices at Canadians’ expense.

Trevor Tombe, an economics professor at the University of Calgary, said the truth is more complicated, noting: “It’s nothing new that complex issues get simplified by politicians across the political spectrum.”

Inflation began rising for the first time in mid-2021, coinciding with the reopening of the Canadian economy after several pandemic lockdowns. As prices continued to rise in 2022, with the country’s annual inflation rate peaking at 8.1 per cent in June, inflation became a focal point in politics.

Stephen Gordon, an economics professor at Laval University, said most economists agree that a range of factors pushed inflation to a level much higher than the Bank of Canada’s 2 per cent target. Global events, including Russia’s invasion of Ukraine and pandemic-related supply chain disruptions, restricted goods supply and raised prices.

There is also growing debate about local factors that played into inflation, including fiscal and monetary stimulus during the pandemic.

The federal government also responded to COVID-19 with a range of pandemic support programs that provided billions of dollars to individuals and businesses to offset the financial losses caused by the lockdowns.

The Bank of Canada also injected stimulus into the economy by lowering interest rates to near zero and purchasing government bonds to further reduce borrowing costs and encourage spending, a strategy followed by other central banks around the world.

This stimulus was likely excessive, as the Bank of Canada now acknowledges.

In a speech at the University of Waterloo in September, Deputy Governor Paul Beaudry said a faster global withdrawal of fiscal and monetary stimulus during the pandemic recovery would probably have led to lower inflation.

The federal government remained committed to asserting that inflation is the result of global factors beyond Canada’s control.

In an interview with The Canadian Press this week, Prime Minister Justin Trudeau said “part of the lesson about this inflation crisis was the disruptions in global supply chains.”

Tombe said Ottawa can’t absolve itself of responsibility for the effects of its domestic policies, noting that rising housing costs also contribute to inflation. However, he said, the criticism of pandemic stimulus is being made with the benefit of hindsight.

Gordon also agreed that the effects of the programs were not expected at the beginning of the pandemic, saying: “No one knew at the time what the right amount was.”