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Dodge Says Canada Needs Higher Interest Rates

Former Bank of Canada Governor David Dodge said provincial and federal governments should run budget deficits to fund infrastructure projects, which would lift the economy and take pressure off the central bank to keep interest rates low.

Such investments would provide a productivity boost to a nation that will struggle as an aging population shrinks the workforce, Dodge told reporters after a speech Wednesday in Ottawa. Low interest rates aimed at boosting private investment are also leading to undesirable gains in consumer spending and housing, he said.