David Dodge, former Bank of Canada Governor: recession will “fundamentally alter” capitalism

Rosy outlook from Harper and Carney ‘unrealistic,’ Dodge says

OTTAWA — Canada and the world are facing a long and deep recession that will fundamentally alter the nature of capitalism, former Bank of Canada governor David Dodge said in an exclusive interview a year after he left the bank.

Recovery “is not going to be as quick as everybody thinks,” he said on Tuesday. “I think anybody would be dreaming in Technicolor to think that you’re going to get through this by the third quarter of this year.”

The Bank of Canada has forecast a fast turnaround for Canada, with growth resuming in the second half of this year and soaring to 3.8 per cent next year, although downward revisions to that rosy outlook are in the works. Mark Carney, the current governor, suggested last weekend that the global economy was deteriorating faster than he thought and the next forecast in April will reflect that pessimism.

For his part, Prime Minister Stephen Harper has boasted that Canada will lead the turnaround. Ottawa expects a healthy recovery that will bring its books back into surplus by 2013.

“They’re not going to do that. It’s totally unrealistic,” said Mr. Dodge, who is now a senior adviser at law firm Bennett Jones LLP.

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