LAKE LOUISE, Alta. — Former Bank of Canada governor David Dodge says Canada must shift its attention to investing for economic growth as the world recovers from the COVID-19 pandemic downturn over the next few years.
In an online presentation at the virtual Bennett Jones Lake Louise World Cup Business Forum, the former central bank chief said Canadian governments and businesses will have to continue to borrow money in 2021 and 2022.
But he added borrowing of $400 billion to date this year for the federal government and $100 billion for the provinces — about 20 per cent of Canadian GDP — should be reduced going forward and directed to growth areas rather than “consumption,” as has been the case to date.
The business forum is normally held in Lake Louise, Alta., in conjunction with World Cup alpine ski races, but both the races and the in-person conference were called off this year because of the pandemic.
Dodge says he’s expecting about 3.9 per cent economic growth in Canada in 2021, assuming vaccines are widely available after the second quarter, and 1.9 per cent in 2022.
He says the pace of growth should return to 2019 levels by the spring of 2022, but national output will still be three per cent lower than it would have been without COVID-19.
Dodge said a key challenge for Canada going forward is to continue to develop its technology expertise to compete with the growing influence of China.
“COVID has accelerated the transformation to a truly digital world and to Asia as it’s epicentre,” he said.
“Canada can thrive in this world as long as Canadian businesses, workers and governments work together and focus on investing in the future, not in preserving the past.”
This report by The Canadian Press was first published Nov. 27, 2020.
The Canadian Press