‘That’s bull****’: David Dodge fires back at Poilievre’s criticism of the Bank of Canada

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Bank of Canada governor Tiff Macklem declined to comment on Pierre Poilievre’s gibe last month that the central bank was “financially illiterate.” David Dodge, one of Macklem’s predecessors, felt no such compunction to take the high road in an interview over the weekend, firing back at the Conservative leadership candidate with an expletive on Sunday morning television.

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“That’s bullshit,” Dodge said in a pre-recorded interview that aired during CTV’s Question Period on May 8. “I’m very insulted by that,” he continued. The Bank of Canada “understands what’s going on, they made a judgment call, which I think was 100 per cent right.”

Dodge added: “It was that judgment call in the spring of (2020) that saved us from a real depression coming out of the pandemic.”

The remarks come after Poilievre’s response to a Bank of Canada report from April 19 that observed that “bitcoin ownership remained concentrated among young, educated men with high household income and low financial literacy.”

Poilievre, who has been courting the crypto community throughout his campaign, seized on the report, though only one of three authors was associated with the Bank of Canada, and the paper stated that the research was produced independently from the Governing Council and the conclusions could differ from the views of Macklem and his deputies.

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“The Bank of Canada says Bitcoin-ers lack financial literacy,” Poilievre tweeted on April 22. “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.”

Career politician

Poilievre, a career politician and longtime member of the House finance committee, is the perceived frontrunner in the race to replace Erin O’Toole as Conservative leader. He’s been a vocal critic of the Bank of Canada’s pandemic-era policies, questioning Macklem’s independence from the federal government. He staged a press conference outside the central bank’s headquarters last month vowed to audit the Bank of Canada.

Bank of Canada senior deputy governor Carolyn Rogers focused her first remarks as Macklem’s No. 2 on the intensifying criticism and diminishing trust surrounding the central bank. She didn’t name Poilievre in her speech, but she did state that the central bank’s bond-buying program — a focal point of Poilievre’s innuendo — as already public on the central bank’s website.

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“We are acutely aware that, with some of the extraordinary actions we have taken during the pandemic and with inflation well above our target, some people are questioning that trust,” Rogers said, adding that she welcomes more scrutiny from concerned Canadians.

Dodge, now a senior adviser at Canadian law firm Bennett Jones LLP, stood by his remarks when contacted by the Financial Post.

“Well, there’s lots of blame (for rampant inflation) to go around,” Dodge said in an interview. “The Bank of Canada, like the Federal Reserve, like many other central banks, did what the playbook called for, which was to cut the overnight rate, cut the policy rate, and at the same time, provide liquidity in the form of expanding their balance sheet,” he continued. “Absolutely (it was) the correct thing to do.”

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Dodge added that by the following winter of 2021, the economy hadn’t fully recovered from the pandemic, but most of the danger had passed. Now that the economy has moved past the worst of the pandemic, the Bank of Canada’s actions have been subject to a critical postmortem, particularly with the role the institution played in boosting inflation.

“There are always going to be sensationalists on both ends of the spectrum out there that will muzzy it up and make it difficult for people to actually understand (complex financial topics),” Dodge said.

No apologist

Dodge isn’t an apologist for his former colleagues. Last summer, he questioned the Bank of Canada’s confidence that inflation would be temporary, a critique that has proven to be a good one, as the consumer price index is now growing at year-over-year rate near seven per cent.

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“Central banks made an enormous mistake in using the word ‘temporary’,” Dodge said in his interview with the Financial Post, adding that there is a lag before markets adjust to changes in policy. “That was a very unfortunate… position to espouse since there was tremendous uncertainty about how COVID was going to impact the ability of suppliers to supply.”

But the former governor has little use of Poilievre’s attacks over inflation.

The Conservative leadership candidate has been promoting cryptocurrencies as a way for Canadians to “take back their money” and “opt out of inflation.” When Question Period host Evan Solomon brought these remarks to the former governor, Dodge once again bristled.

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

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Dodge pointed to ongoing propellants for inflation, like supply limitations stemming from the Russian invasion into Ukraine, COVID-19 supply chain snarls, and an aging economy.

Poilievre responded in a tweet a few hours after the interview aired and his campaign provided comment to the Financial Post.

“David Dodge says he’s offended. Good,” he added. “You know who is also offended? The single mom who can’t afford food, the worker who can’t afford to fill his gas tank and the 32-year-old living in his mom’s basement because the government inflated the cost of living to generational highs.

“The establishment doesn’t want to be held accountable for the misery they caused our working class,” he wrote. “Too bad. Get used to it. I’m just getting started.”

• Email: shughes@postmedia.com | Twitter: StephHughes95