Canada’s debt problem is not new and neither is the solution. When Stephen Harper was prime minister, Ottawa cut taxes, restrained spending and balanced the books.

His record points to two clear lessons. Taxes can be cut without driving up long-term debt. And deficits can be reduced and eliminated when governments are willing to restrain spending.

JAY GOLDBERG: Stephen Harper proved Canada’s current debt crisis was avoidable  Back to video

With the recent unveiling of Harper’s portrait in Ottawa, his government’s fiscal record is worth revisiting as Canada grapples with a cost-of-living crisis and persistent deficits.

Deliberate approach to fiscal management

During the 2008-09 global financial crisis, the Harper government ran deficits to stabilize the economy, but left office with the budget back in balance. That did not happen by accident. It reflected a deliberate approach to fiscal management rather than a reliance on favourable economic conditions.

At the same time, the Harper government cut taxes significantly.

One of Harper’s most visible moves was cutting the GST from 7% to 5%. Canadians continue to benefit from that decision.

This year alone, taxpayers are saving an estimated $21.8 billion because of the lower GST.

The government also lowered the lowest personal income tax rate, reduced the upper threshold of the two lowest personal income tax brackets, cut corporate tax rates and reduced taxes for small businesses.

Today, more than 40% of Canadians say they are within $200 of not being able to pay their bills. Businesses point to U.S. tariffs and an uncompetitive domestic environment as reasons for shifting investment elsewhere. Against that backdrop, the experience of Harper-era tax reductions remains directly relevant to today’s affordability and competitiveness challenges.

Critics argue that today’s $78.3-billion deficit, along with the deficits accumulated during the Trudeau government’s nine years in office, show taxes that were cut too deeply during the Harper years.

But the record tells a different story.

Deficits not driven by tax relief

In his 2015 budget, Harper’s final budget before that year’s federal election, then-finance minister Joe Oliver projected a $1.4-billion surplus and balanced budgets into the foreseeable future. Those projections assumed all existing tax reductions would remain in place.

The deficits Canada has experienced since 2015 were not driven by tax relief. They followed the Trudeau government’s stated plan to run a series of modest deficits that expanded far beyond their original scope and ushered in a prolonged period of elevated federal spending.

During the 2008-09 financial crisis, the Harper government ran significant deficits. But those deficits came with a clear plan to return the budget to balance.

The deficit declined from $55.6 billion in 2009-10 to $5.2 billion four years later, a reduction of more than 90%.

Some critics maintain that the pace of deficit elimination during the Harper years was too slow. When compared with current federal plans, however, that approach looks both more deliberate and more effective.

In his November 2025 budget, Finance Minister François-Philippe Champagne projected a deficit of $78.3 billion while offering limited detail on how the government intends to materially reduce, let alone eliminate, the deficit. Four years from now, the deficit is still expected to be $56.6 billion, a reduction of just 28%.

The Harper government’s deficit-reduction strategy was clear and achievable. It showed that governments can do more than simply slow the growth of red ink. With sustained spending restraint, they can restore fiscal balance.

The Harper era demonstrates that tax relief, deficit reduction and responsible fiscal management can coexist. As Canada confronts ongoing affordability pressures and persistent deficits, that experience offers a practical reference point for today’s fiscal choices. Jay Goldberg is a fellow with the Frontier Centre for Public Policy 

© Edmonton Sun