The National Post writes an opinion column on David Dodge’s recent appearance before the House of Commons finance committee:
“David Dodge was like the grown-up handing out black coffee and aspirins the morning after a night of teenage bacchanalian excess.
The former Bank of Canada governor was testifying on Monday and his message was unequivocal: The party’s over.
The Liberal government has rarely encountered a problem it didn’t believe could not be solved by throwing borrowed money at it.
But Dodge painted a stark picture. Structural shifts are taking place, including an aging population, climate change and the introduction of new technologies like AI, that will require massive investment to manage.
Adapting to these changes will incur costs and require governments to spend a smaller share of their revenue on current services. “This is not a pleasant prospect,” he said.
These challenges could be managed more easily if real incomes were growing and borrowing costs were low. But, as Dodge pointed out, per capita real incomes have been falling and the cost of servicing debt has been rising.”
The full article is available here.