Bank of Canada governor misses point of mandatory retirement

Lana
Lana Payne
Send to a friend

Send this article to a friend.

David Dodge arguably the most controversial and outspoken governor of the Bank of Canada wont be staying on in the job until he reaches 65. He announced his retirement plans last week.

Ironically, it is Dodge who has pushed for the end of mandatory retirement, arguing that changing demographics mean people have to work longer or the economy will suffer.

But its unlikely Dodge will be gardening any time soon. He appears to like a good argument, to genuinely enjoy debate and be in the thick of things. After all, he never wavered when he advised former prime minister Brian Mulroney to bring in the highly controversial goods and services tax (GST).

But like far too many economists, Dodges lofty positions are often far removed from the reality of most working peoples lives. For example, with respect to the issue of mandatory retirement at age 65, Dodge hasnt had to work 30 or 35 years on a factory floor or in a job that required endless repetitive motion or hauling and fixing heavy equipment.

Advocating that people work longer is easy when the hardest surface in your life is the cushion on the boardroom chair or a first-class plane seat.

Like most colourful personalities, the media are drawn to Dodge like a moth to a headlight. Most of his press has been favourable. After all, Dodge has worked to take the mystery out of the Central Bank, attempting where possible to turn economic-speak into something the masses could and should understand.

Last week, the media once again sang Dodges praises. They lauded his steady economic hands since taking over the bank job in 2001, crediting him with steering Canada safely through some tough times including the aftershocks of 9/11, a U.S. recession, a soaring Canadian dollar and unprecedented oil prices, all of which could have proven disastrous for the countrys economy.

Dodge is also credited with crafting that infamous 1995 Paul Martin budget that drastically cut social spending in an effort to eliminate the deficit. This also included a plan to gut the countrys employment-insurance (EI) system so that it no longer met the needs of the nations unemployed, especially women workers. In essence, the countrys deficit was solved on the backs of average working people.

Making the EI rules tougher resulted in huge surpluses in the EI account and it was these surpluses which contributed to the federal governments overall improved fiscal picture and to the billions in tax cuts the federal Liberals would eventually hand over to big business and wealthy Canadians.

Dodge certainly broke out of the usual Central Bank governor role by commenting on a wide range of public-policy issues like early childhood education and public-private partnerships. He wasnt one to stick to interest rates and other dry matters of monetary policy.

And from all accounts, certainly from the business press, Dodge will leave the economy in great shape an economy characterized by low unemployment and low inflation.

On the surface, the indicators look good.

But to borrow one of todays overused buzz phrases, when you drill down, its not so great. Unfortunately, Dodges description of the Canadian economy operating at full capacity has given politicians and federal decision-makers an ill-advised sense of comfort.

Because beneath the surface, Canadians are losing well-paying jobs hand over fist. There is a crisis covered up by the creation of lower-paying, often part-time jobs. Alberta is, of course, the exception. But nearly everywhere else in the country the manufacturing sector is bleeding some might say hemorrhaging.

One in 10 manufacturing jobs in Canada has vanished since 2002 almost 250,000 jobs in total.

According to the Canadian Labour Congress (CLC), these jobs, on average, paid more than $20 an hour representing a loss to the Canadian economy of some $2.5 billion annually.

Several top labour leaders delivered this message, along with a few solutions, to the prime minister a few weeks back. But unfortunately, the federal government does not, according to the CLC, share the sense of crisis. So its likely the Harper Conservatives will do little about this job crisis, because doing more means admitting theres a problem in the first place.

And the prime minister certainly does not want Canadians doubting his ability to deal with the economy. He has enough problems with Afghanistan, the environment and his socially conservative views.

Dodge has a few months left in his job. He might consider taking on the manufacturing crisis before he departs for greener pastures.

But tackling this might mean the central bank boss will have to admit that maybe just maybe his economic steering has not been so perfect.



Lana Payne is a former journalist who is active in the labour movement.

Her column returns May 13.

Organizations: Bank of Canada, Central Bank, Canadian Labour Congress Harper Conservatives

Geographic location: Canada, U.S., Alberta Afghanistan

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments