Feds shouldn’t add 'fuel to the fire' as inflation soars: David Dodge

The federal government needs to “postpone some of the expenditure enhancements” from the last budget in order to help get inflation back under control, according to former Bank of Canada Governor David Dodge.

The Bennett Jones LLP senior advisor said politicians “don't like the alternative of having to restrict spending in order to help control demand.”

“The best we can hope for is they don't add fuel to the fire by providing a bunch of tax cuts or expenditure increases along the way,” Dodge said in an interview on Tuesday.

Dodge said the federal government should postpone a number of spending initiatives announced in the latest budget for at least a year, such as the increase to Old Age Security for Canadians over 75 and home care services.