Former Bank of Canada governor David Dodge is strongly disputing Conservative Party MP and leadership candidate Pierre Poilievre’s claim the central bank is “financially illiterate.”
In an interview on CTV’s Question Period airing Sunday, Dodge, who was governor from 2001 to 2008, called the assertion “bull****."
“I’m very insulted by that…They understand what's going on,” he said, adding that the Bank of Canada’s navigation of the last two years has effectively kept Canada out of a “real depression” coming out of the pandemic.
Poilievre’s criticism of Canada’s central bank is a key pillar of his leadership campaign. He’s questioned its independence, has vowed to have it audited, and will bar it from using its own digital currency.
On April 22, he tweeted that the “Bank of Canada says #Bitcoin-ers lack financial literacy. 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. Restore sound money.”
That comment came after the release of a Bank of Canada report noting that there’s been a slight demographic shift in Bitcoin owners in terms of gender, age and income level from 2018 to 2020 compared to 2017.
“However, Bitcoin ownership remained concentrated among young, educated men with high household income and low financial literacy,” the report reads.
It goes on to say that at the same time, “Canadians who are financially literate are more likely to be aware of bitcoin [than the average Canadian] but less likely to own it.”
On another Poilievre stance -- that cryptocurrency allows people to “opt out” of inflation -- Dodge said “he has no idea what he’s talking about.”
“He’s just wrong because the issue of rising prices…that you have to cope with out of your income is fundamentally at the moment a structural one,” he said. “We have limitations on supply, in part because of a war, in part because of COVID, in part because of ongoing features of the economy – we’re all getting older – the labour force is not growing as fast.”
But Poilievre has said he isn’t trying to win over the opinions of past or current central bankers in his pledge to help every day Canadians suffering from the high costs of living.
"If you think I'm going to be silent about that to protect the ego of bankers and politicians, then you're in for a surprise," Poilievre told reporters on a campaign stop in Ottawa on April 28.
The Bank of Canada has been under fire as inflation continues to reach new heights. It currently sits at 6.7 per cent, far above the central bank’s two per cent target.
In a speech before the Women in Capital Markets this week, senior deputy governor Carolyn Rogers acknowledged Canadians’ uncertainty with the current economic climate.
“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,” she said.
“Tough questions, added scrutiny and informed debate are entirely appropriate in the current environment. We welcome them as an opportunity to engage with Canadians about what we do, how we do it and how we can improve.”
Dodge said the danger of losing public trust is “always there” and as such communication from the top is “very, very important in that regard.”
“But they have to be nervous. As does the ordinary citizen, has to be nervous about a future we do not know. We do not know how the geopolitical situation in the world is going to play out. We do not know how the pandemic situation is going to play out,” he said.
