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Former Governor of the Bank of Canada David Dodge. (Sean Kilpatrick/ Globe and Mail)
Former Governor of the Bank of Canada David Dodge. (Sean Kilpatrick/ Globe and Mail)

ROB Magazine

Welcome to Dodge City Add to ...

But at what point does demanding respect for Canada's professional policy makers and the cabinet it serves become a pretense to snuff out debate?

Even Kevin Page, the Finance veteran whom Harper installed in 2008 as the first head of the new Parliamentary Budget Office, is routinely dismissed each time one of his reports on the state of the country's finances contrasts with the government's message.

When he was in government, Toronto-Dominion's Clark was known as "Red Ed" for his leading role in designing the National Energy Program. He was promptly fired by Brian Mulroney when the Progressive Conservatives swept to power in 1984.

But Dodge's politics and philosophy are more difficult to define, making it harder to say his criticisms are simply those of a partisan.

Curtis locates his friend's philosophy at dead centre. Bill Robson, president of the C.D. Howe Institute, says Dodge's positions are "anchored in empirical work and pragmatics." Ideology means less to him than what his experience suggests will work. "He's a market-oriented person, but he's a strong believer in the need for public policy in a number of areas and he doesn't shy away from conclusions that are quite strong about what the role of government should be," says Robson.

At Finance, Dodge was every bit as much the advocate for Conservative Michael Wilson's Goods and Services Tax as he was for Liberal Paul Martin's deficit-reduction strategy. As central bank governor, Dodge, along with many of his peers around the world, experimented in the early part of the decade with keeping the benchmark borrowing rate lower for longer than had been the custom, seeing if the rules of inflation had changed, says David Laidler, an economics professor emeritus at the University of Western Ontario in London. But Dodge still showed relative caution, lifting Canada's benchmark rate sooner than Alan Greenspan at the U.S. Federal Reserve, perhaps saving Canada from some of the excesses that went on south of the border, says Laidler.

Not only can he not be dismissed as a knee-jerk free marketer or a knee-jerk dirigiste, but Dodge also has the benefit of often being on the right side of history.

Chrétien and Martin get much of the credit for restoring Canada's finances, but they were initially reluctant to make dramatic spending cuts. It was only after more than a year of steady prodding from Dodge that they made the leap in 1995, says Glen Hodgson, who worked as Dodge's executive assistant at Finance in 1992-'93.

Dodge identified the risk in Canada Mortgage and Housing's decision in 2006 to insure mortgages for 40 years and with no down payments. That was well before the U.S. subprime mortgage meltdown flagged the threat of loose housing policy and before Flaherty tightened the rules in 2008.

Also in 2006, Dodge gave back-to-back speeches in New York and at Princeton University explaining how the combination of debt-fuelled consumption in the United States and China's reliance on exports was a disaster waiting to happen, and how the International Monetary Fund should be overhauled to restore balance to the global economy. The U.S. consumption frenzy and China's massive purchases of U.S. debt to control the value of its exchange rate are now considered factors that brought on the financial crisis. And the IMF's board of directors agreed in Istanbul in October that the institution must become a more vigorous arbiter of what is going on in the global economy.

"David's track record is pretty good in terms of pointing to the big hairy issues," says Hodgson, who is now the chief economist at the Conference Board of Canada in Ottawa. "Now, if you are a current deputy minister, that might make your life more complicated. But you know, we're in a country where we haven't had enough informed debate about some of the big issues."





Read everything that's been written about Dodge over his career and you are left with a bit of a caricature: the voice, a gravelly drawl so distinctive that few who share anecdotes about him can resist invoking Krusty the Clown when recounting Dodge's dialogue; the trademark pipe jutting from his mouth as he strolls Ottawa's Sparks Street; the professorial manner; the uncanny ability to make conversations about monetary and fiscal policy sound like they are taking place over a couple of beers after a day of bringing in hay or fencing a new pasture. (Indeed, Dodge is a gentleman farmer, raising beef cattle on a farm outside Ottawa.)

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