Former Bank of Canada Governor Expects 2024 Budget To Be ‘The Worst Since 1982’

Former Bank of Canada Governor David Dodge voiced concerns about the upcoming 2024 federal budget, warning that it could be “the worst budget in decades.”

Dodge, who served as Governor from 2001 to 2008, believes the budget being presented by Deputy Prime Minister and Finance Minister Chrystia Freeland on Tuesday is headed in the “wrong direction” in terms of supporting the incomes and economic well-being of Canadians.

“I think this is likely to be the worst budget since the MacEachen budget of 1982, in the sense of pointing us in the wrong direction as to how we go about raising the incomes of Canadians and actually making Canadians feel better over the medium term,” Dodge told Vassy Kapelos on CTV News Channel’s Power Play.

Dodge is referring to the budget presented by then-Finance Minister Allan MacEachen under then-Prime Minister Pierre Trudeau. Similar to today, interest rates and inflation were high at the time. The budget stoked public and political ire over spending, taxation, and the wage restraint measure that limited wage increases to 6% and 5% over the next two years.

A major concern for Dodge is the potential introduction of some form of wealth tax or excess profits tax, which he believes could slow economic growth rather than raise the funds needed to finance the government’s nearly $40 billion in new spending commitments.

“I think there is a very real possibility that they’ll do exactly the wrong thing and tax the very folks and the very corporations that are going to make the investments that will actually raise income over time,” Dodge said.

Dodge’s comments come as the federal government faces pressure to address affordability issues, particularly for younger Canadians. Prime Minister Justin Trudeau on Monday acknowledged that millennials and Gen Z now make up the majority of the workforce and feel that “middle-class stability is out of reach.”

However, Dodge also appeared to doubt that the government’s plans to address the supply side of the housing crisis, another key concern for younger Canadians, would be effective.

Information for this story was found via CTV News, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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