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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 ...

This caricature is part of his power. His opinions stick because people feel they know him and can trust him. He served at the Bank of Canada at a time when central bankers, led by Greenspan, became rock stars, and paparazzi of financial news agencies and cable business channels emerged to hang off their every word. But unlike Greenspan, Dodge isn't trying to sell a book or defending himself from charges that he caused the deepest global recession since the Second World War.

That's not to say that Dodge is infallible.

In an article published in The Globe in January, 2001, Dodge, who was about to begin his tenure as Bank of Canada governor, had this to say about his time in Finance: "I guess I was always willing to take the risk that 5% of the time I would screw up in order to provide the information and get it out and get the debate out. And there were some screw-ups. So that's life, right? If they didn't like it, they could always fire me."

If Dodge has screwed up in the past year, it was in that "Technicolor" interview. Dodge suggested the central bank was too reliant on its economic models, and had failed to adjust for the cataclysmic events that had just crushed global economic growth. "Any economic model, if you don't tweak it, will in fact produce for you a fairly sharp rebound based on historic data," Dodge said. That sounds a lot like a former boss second-guessing the skills of the current one-and there is a particular code against that because maintaining the confidence of markets is key to any central bank's work, says Laidler, who was an adviser at the Bank of Canada for a year when Thiessen was governor.

But slips of those kinds are a big part of Dodge's appeal. Call them honest mistakes. Curtis says Dodge will never write a memoir about his time in government and at the central bank because he would never divulge the gossipy details and private discussions that people would want to read. "He never tried to play politician," adds Manley. "In other words, he would give us the facts and the politicians had to make the decisions about what to do about it."

Now, Dodge has returned to give all of us the facts. It's up to us to decide what to do with them.


On white-collar crime in Canada "This is a very common refrain that we hear when we visit markets in New York or in Boston or in London or in Europe, a perception that somehow, this is kind of a little bit more of a Wild West up here in terms of the degree in which rules and regulations are enforced and that perception doesn't really help us when we go and try to raise money on foreign markets." (December, 2004)

On taxing income trusts "Better late than never. In...the majority of Canadian businesses, where innovation and new investment are critical, then the income trust is not an appropriate form of organization." (February, 2007)

On the collapse of global credit markets "What we had was a financial system where leverage increased quite substantially while credit controls declined. Financial instruments were introduced and nobody had any idea about the risks." (September, 2008)

On the Harper government's approach to economic recovery "Successful investment, rather than pissing money down a rathole, really means that you are in for a period of three or four years for that to work.… The period of recovery is not going to be quick." (March, 2009)

Of the Fraser Institute's suggestion that Canada Mortgage and Housing Corp. be privatized "I haven't read their report, but if that's what it said, that's nonsense." (February, 2009)

On the U.S. deficit "The Americans are not yet sufficiently afraid. If you think back to where we were in '92-'93, it was scary times here and the Canadian public was the great ally of federal and provincial finance ministers because everybody understood you couldn't quite keep going. The debate on that issue in the United States has not really reached that level of fear, if you will, hence one shouldn't be surprised the politicians at the moment can't quite get themselves to the point where they could deal with it." (February, 2009)

On the auto-industry crisis "We've said for a long time that we had overcapacity in the automobile industry, and this is clearly going to cause a shrinkage of capacity. …Sure, we're going to lose some firms. That's what recessions are all about. They clean out the dinosaurs." (March, 2009)

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