Former Bank of Canada Governor David Dodge is sounding off on criticism the central bank is “financially illiterate.”

In an interview on CTV’s Question Period, Dodge said such claims made by Conservative Party of Canada MP and leadership candidate Pierre Poilievre were without merit.

Poilievre has been critical of the central bank throughout his leadership campaign, questioning the Bank of Canada’s independence. He has also pledged to commission an audit of the bank – which is already subject to an audit under the Bank of Canada Act – in the wake of unprecedented financial measures during the pandemic.

In a tweet sent April 22, Poilievre said that the central bank missed the boat on inflationary pressures, saying “The @bankofcanada says #Bitcoin-ers lack financial literacy. This from the same people who promised we’d have ‘deflation’ right before inflation hit a 30 year high. It is our central bank that is financially illiterate.”

“That’s bull----. I’m very insulted by that,” Dodge said.

“Because [the Bank of Canada] understands what’s going on, they made a judgment call which I think was 100 per cent right and would have been claimed by people like Poilievre to be absolutely crazy in the spring of [2020]. But it was that judgment call in the spring of [2020] that saved us from a real depression coming out of the pandemic,” he said, referring to the central bank’s policy actions to cushion the blow of the pandemic.

Poilievre rebutted Dodge’s criticisms in a statement to BNN Bloomberg, saying he “should be embarrassed” by the current situation.

"Former central banker Dodge should be embarrassed he said nothing as the Bank of Canada became Trudeau’s ATM, inflating real estate by 50 per cent and consumer prices to 30-year highs.”

Dodge retired from the Bank of Canada on Jan. 31, 2008 after serving a seven-year term..

Dodge defended his stance - in an email to BNN Bloomberg, he said the cetntal bank acted prudently to backstop the domestic economy

"Faced with the uncertain impact of COVID-19 in 2020,  the Bank of Canada did exactly the right thing to mitigate the collapse of the Canadian economy. The actions of the Bank of Canada played a critical role in the achievement of a quick recovery of output and employment by 2021"

"What was anticipated by most economists (including those in central banks) was that the capacity," he said.

Poilievre has also touted cryptocurrencies including Bitcoin as a way for Canadians to “opt out” of inflation, an assertion Dodge dismissed out of hand.

“I have no idea what he’s talking about, and neither does he in that regard,” he said. “On the crypto issue, he’s just wrong. The issue of rising prices that you have to cope with out of your income is fundamentally, at the moment, a structural one.”

Dodge cited the ongoing Russian invasion of Ukraine, supply chain snarls, and aging demographics as significant contributors to inflation, which is running at a 31-year high of 6.7 per cent. There are expectations that Statistics Canada’s consumer price index will exceed eight per cent when April’s data is released, in part due to a change in methodology that will include used vehicles in the inflation basket.

While Poilievre has been pointed in his criticism of the central bank, private sector economists have also noted the Bank of Canada is playing catch-up when it comes to quelling inflation running at three-decade highs.

In an interview with BNN Bloomberg in late April after the Bank of Canada hiked its main policy rate by half a point for the first time in almost 22 years, National Bank of Canada Chief Economist and Strategist Stéfane Marion said the central bank had been “too permissive” in allowing inflationary pressures to run out of control.

“To allow your inflation rate to surpass the unemployment rate means that the Bank of Canada was a little bit too permissive, and as of last November they were claiming that the unemployment rate was not a good measure of potentially inflationary pressure,” he said.

“The last few months have proven the Bank of Canada wrong, so now it’s catch-up mode.”