{"id":37918,"date":"2023-08-28T11:10:36","date_gmt":"2023-08-28T11:10:36","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2023\/08\/28\/will-trudeaus-government-breach-the-david-dodge-rule\/"},"modified":"2023-08-28T11:10:36","modified_gmt":"2023-08-28T11:10:36","slug":"will-trudeaus-government-breach-the-david-dodge-rule","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2023\/08\/28\/will-trudeaus-government-breach-the-david-dodge-rule\/","title":{"rendered":"Will Trudeau\u2019s government breach the David Dodge Rule?"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><p> \n<\/p>\n<div id=\"\">\n<header aria-label=\"Beginning of Article\" class=\"article-header article-header--story\">\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\" data-aqa=\"nav-breadcrumb\">\n<h2 class=\"visually-hidden\">Breadcrumb Trail Links<\/h2>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\"> News <\/li>\n<li class=\"breadcrumbs__item\"> Economy <\/li>\n<\/ol>\n<\/nav>\n<div class=\"article-header__detail\">\n<div class=\"article-header__detail__texts\">\n<p class=\"article-subtitle\"> Rising bond yields are putting Ottawa on a costly path when it comes to servicing the debt <\/p>\n<div class=\"article-meta\">\n<p> <span class=\"published-date__since\">Published Aug 28, 2023<\/span> \u00a0\u2022\u00a0 <span class=\"updated-date__since\">Last updated 2\u00a0hours ago<\/span> \u00a0\u2022\u00a0 <span class=\"published-date__word-count\">3 minute read<\/span> <\/p>\n<\/p><\/div><\/div>\n<figure class=\"featured-image\" data-aqa=\"featured-image\"><picture class=\"featured-image__ratio\"><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">Former Bank of Canada Governor David Dodge during a news conference in Ottawa, 2008.<\/span> <span class=\"credit\">Photo by Tom Hanson\/THE CANADIAN PRESS files<\/span> <\/figcaption><\/figure>\n<\/div>\n<\/header>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p data-async=\"\">The sharp escalation of global bond yields in recent weeks raises the prospect we may be in the middle of a structural shift to a world of permanently higher borrowing costs.<\/p>\n<p>If true, it would represent a fresh blow to Canadian government finances that only reinforces the need for much more careful budget management from Prime Minister Justin Trudeau\u2019s administration, including the reestablishment of some sort of fiscal anchor.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_2\">\n<section aria-describedby=\"advertisment2512273043392078018725596364800000\" class=\"ad\">\n<p>Advertisement 2<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-2\">\n<div class=\"ad__inner__container\" data-ad=\"[[6,6],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"6x6\" data-ad-loc=\"2\" data-ad-mobile=\"[[6,6],[320,50],[300,50],[300,250],[300,600]]\" data-aqa=\"advertisement\" id=\"ad-2\" style=\"--desktopHeight:250px;--mobileHeight:600px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<div class=\"article-block article-block-bg article-content__sign-in-group hidden\" data-aqa=\"identity-sign-in\" data-async=\"\" id=\"article-block\">\n<section class=\"row\">\n<header class=\"identity-intro col-xs-12 col-md-6 flex-justify-center\">\n<div class=\"col-xs-12 col-sm-10 col-md-10\"> <img loading=\"lazy\" decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 75w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 100w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 150w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 240w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 320w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 500w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 640w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 800w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 1024w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 1280w, https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg 1600w\" alt=\"Financial Post\" class=\"market-logo\" height=\"37\" fifu-data-src=\"https:\/\/dcs-static.gprod.postmedia.digital\/14.2.3\/websites\/images\/identity\/logo-identity-fp.svg\" width=\"280\"\/><\/p>\n<div class=\"intro-body__premium hidden\">\n<h2>THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY<\/h2>\n<p class=\"identity-intro__description\">Subscribe now to read the latest news in your city and across Canada.<\/p>\n<ul class=\"list-unstyled list-checkmark\">\n<li>Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.<\/li>\n<li>Daily content from Financial Times, the world&#8217;s leading global business publication.<\/li>\n<li>Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.<\/li>\n<li>National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.<\/li>\n<li>Daily puzzles, including the New York Times Crossword.<\/li>\n<\/ul>\n<\/div>\n<div class=\"intro-body__register hidden\">\n<h2>SUBSCRIBE TO UNLOCK MORE ARTICLES<\/h2>\n<p class=\"identity-intro__description\">Subscribe now to read the latest news in your city and across Canada.<\/p>\n<ul class=\"list-unstyled list-checkmark\">\n<li>Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.<\/li>\n<li>Daily content from Financial Times, the world&#8217;s leading global business publication.<\/li>\n<li>Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.<\/li>\n<li>National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.<\/li>\n<li>Daily puzzles, including the New York Times Crossword.<\/li>\n<\/ul>\n<\/div>\n<div class=\"intro-body__anonymous\">\n<h2>REGISTER TO UNLOCK MORE ARTICLES<\/h2>\n<p class=\"identity-intro__description\">Create an account or sign in to continue with your reading experience.<\/p>\n<ul class=\"list-unstyled list-checkmark\">\n<li>Access articles from across Canada with one account.<\/li>\n<li>Share your thoughts and join the conversation in the comments.<\/li>\n<li>Enjoy additional articles per month.<\/li>\n<li>Get email updates from your favourite authors.<\/li>\n<\/ul>\n<\/div><\/div>\n<\/header>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p data-async=\"\">Global interest rates have been marching higher all summer, with bond yields\u00a0up almost a full percentage point since April in both the U.S. and Canada to levels not seen since 2007.<\/p>\n<p>Even if they don\u2019t rise further from here, markets are signalling the era of super-low borrowing costs that has prevailed since the Great Financial Crisis may be over.<\/p>\n<p>This poses a problem for the federal government, whose heavy borrowing over the past three years was premised on the idea that interest rates would remain at historically low levels.<\/p>\n<p>Finance Minister Chrystia Freeland\u2019s budget earlier this year projected that government borrowing rates would settle in between 2.5 per cent and three per cent, depending on duration. Right now, bond yields are ranging from 3.5 per cent on the 30-year bond to 4.8 per cent on two years.<\/p>\n<p>Should these rates persist, the impact on the nation\u2019s fiscal path would be meaningful.<\/p>\n<p>According to the finance department\u2019s own sensitivity analysis,\u00a0a one percentage point increase in interest rates would add $3.8 billion in charges in the first year, with the cost rising to $10.3 billion in five years.<\/p>\n<\/section>\n<div class=\"js-widget-content article-content__widget-group article-content__widget-group--content-slot19 article-content__widget-group--newsletter-slot\">\n<section aria-labelledby=\"FinancialPostTopStories8650311582873107932649556239450112\" class=\"newsletter-widget fp-headlinenews background--primary-light-gradient\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-aqa=\"widget-newsletter\" data-newsletter=\"single\" data-newsletter-component=\"\" data-target-list=\"FP_HeadlineNews\" data-widget=\"newsletter\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Financial Post Top Stories Banner\" class=\"newsletter-widget__banner\" height=\"60\" loading=\"lazy\" fifu-data-src=\"https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/dcs-media\/images\/2023\/2\/3\/1675439373753-fp-topStories-signupBanner-01302023.jpg?ssl=1\" width=\"97\"\/><\/p>\n<div class=\"newsletter-widget__body\">\n<h2 class=\"newsletter-widget__title\" id=\"FinancialPostTopStories8650311582873107932649556239450112\">Top Stories<\/h2>\n<p class=\"newsletter-widget__text\">Get the latest headlines, breaking news and columns.<\/p>\n<div class=\"js-replace-main\">  <small class=\"newsletter-widget__disclaimer text-size--micro\"> By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300 <\/small> <\/div>\n<div class=\"js-submit-success\" hidden=\"\" id=\"submitSuccessFP_HeadlineNews\">\n<h3 class=\"newsletter__feedback--heading\">Thanks for signing up!<\/h3>\n<p class=\"newsletter-widget__text\">A welcome email is on its way. If you don&#8217;t see it, please check your junk folder.<\/p>\n<p class=\"newsletter-widget__text newsletter__feedback--last\">The next issue of Top Stories will soon be in your inbox.<\/p>\n<\/p><\/div>\n<p class=\"newsletter-widget__text js-submit-error\" hidden=\"\" id=\"submitErrorFP_HeadlineNews\"> We encountered an issue signing you up. Please try again <\/p>\n<\/p><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_3\">\n<section aria-describedby=\"advertisment8472942449955831550811976721498112\" class=\"ad\">\n<p>Advertisement 3<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-3\">\n<div class=\"ad__inner__container\" data-ad=\"[[7,7],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"7x7\" data-ad-loc=\"3\" data-ad-mobile=\"[[7,7],[300,250],[320,50],[300,50]]\" data-aqa=\"advertisement\" id=\"ad-3\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>The net impact on the bottom line would be lower than that, as higher public debt charges are partly offset by some additional revenue for the government that comes with higher interest rates.<\/p>\n<p>According to the same sensitivity analysis, a percentage point increase in rates would increase the deficit by $4 billion in year one and up to $6.9 billion by year five. The total cost would exceed $25 billion over five years, a not-insignificant amount.<\/p>\n<p>It would eclipse, for example, all the gains the government is expecting to make from its much-heralded efforts to find $15 billion in savings in the fiscal framework over the next five years.<\/p>\n<p>The federal government will continue to claim the trajectory is sustainable, since the debt to GDP ratio will still be on a downward path, albeit a slower one.<\/p>\n<p>There\u2019s little sign, after all, that Canada\u2019s access to capital markets is being constrained by its fiscal plan \u2014 which is the ultimate test of sustainability.<\/p>\n<p>Still, the higher interest rate environment will make it increasingly tougher to argue the current trajectory is a prudent one.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_4\">\n<section aria-describedby=\"advertisment1762200995539180425155411282231296\" class=\"ad\">\n<p>Advertisement 4<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-4\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"4\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-4\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>Prudence is the act of being cautious even if disaster isn\u2019t the most probable scenario \u2014 in part because no one really knows what lies ahead.\u00a0Prudent policy is the foundation of sustainable finances and it\u2019s a bar the Trudeau government was already struggling to hit even before the recent escalation in borrowing costs.<\/p>\n<p>Freeland\u2019s last budget in March has faced some criticism for being too optimistic in its revenue projections. There are some doubts whether the government will be able to keep future spending in check as much as promised in the face of surging population growth. The higher borrowing costs add to these concerns.<\/p>\n<p>\u201cThere is downside risk to their projection,\u201d Mostafa Askari, chief economist at the University of Ottawa\u2019s Institute of Fiscal Studies and Democracy, told me recently in a phone call.<\/p>\n<p>Trudeau\u2019s government emerged from their cabinet retreat last week talking tough about how fiscal responsibility is the foundation of their agenda.<\/p>\n<p data-async=\"\">As a guardrail for policy, former Bank of Canada Governor David Dodge has proposed a 10 per cent prudence rule as an anchor for the federal government, whereby debt service charges are kept at no more than one-tenth of revenue.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_5\">\n<section aria-describedby=\"advertisment1097020898048972591477510874595328\" class=\"ad\">\n<p>Advertisement 5<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-5\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"5\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-5\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<section aria-labelledby=\"moreTopicLabel1994959455972296939339053472415744\" class=\"more-topic\" data-aqa=\"embed-more-topic\" data-carousel-component=\"\" data-carousel-icon-button=\"\" data-carousel-type=\"list\"> <button aria-hidden=\"true\" class=\"more-topic__button-prev\" data-carousel-prev=\"\" tabindex=\"-1\" title=\"previous\" type=\"button\"\/> <\/p>\n<ol class=\"more-topic__items list-unstyled\" data-carousel-slide-list=\"\" tabindex=\"0\">\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"It's very possible Bank of Canada governor Tiff Macklem will need to hike again in order to complete the job. But how far he is really prepared to go remains an open question, writes Theo Argitis.\" class=\"lazyload\" fifu-data-src=\"https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=96&strip=all&quality=80&sig=-uzbS5wlviKC6E1C6b7sxA,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=192&strip=all&quality=80&sig=emUbrJZdlwMZDb0GdiqSkQ 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/06\/bank-of-canada-0608-ph.jpg?h=288&strip=all&quality=80&sig=pYdsOy3jlJDdS-svk77nWQ 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Rate hike shows BoC fighting to stay ahead of curve on inflation <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Bank of Canada\" class=\"lazyload\" fifu-data-src=\"https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=96&strip=all&quality=80&sig=HME8BCbn6VUBTIBnPI-oqA,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=192&strip=all&quality=80&sig=Hn_mgQKxVMu5_PCrzYVkxA 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2023\/07\/bank-of-canada-0713-ph.jpg?h=288&strip=all&quality=80&sig=Clw-zOlV_BFoPCcouwbAnw 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Why BoC is likely to overdo it in fight against inflation <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Canadians buy a lot of stuff from China, but our businesses have struggled to benefit and there\u2019s little cross-border investment.\n\" class=\"lazyload\" fifu-data-src=\"https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=96&strip=all&quality=80&sig=pnq4u8CthAOjUQf28ASwNg,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=192&strip=all&quality=80&sig=XTvH1DgIwphkX8NBGOhQlQ 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/05\/china-canada-0515-ph.jpg?h=288&strip=all&quality=80&sig=IV95DczFvMCKuZ0rv7PWjw 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Why Canada has plenty of leverage as China relations sour <\/span> <\/h3>\n<\/li>\n<\/ol>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-next\" data-carousel-next=\"\" tabindex=\"-1\" title=\"next\" type=\"button\"\/> <\/section>\n<p>The March budget had projected interest payments would remain below that threshold throughout the forecasting horizon. But the increase in global bond yields has put it on a path to breach Dodge\u2019s rule, perhaps permanently, without additional fiscal adjustments.<\/p>\n<p>The government flagging this breach as a key concern in its coming fiscal update would go a long way in displaying they are ready to back their tough talk with action.<\/p>\n<p><em>Theo Argitis is managing director at Compass Rose Group<\/em><\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<\/section>\n<section class=\"article-content__share-group article-delimiter\" data-evt=\"beforeunload\" data-evt-typ=\"page_scroll\" data-evt-val=\"{\" control_fields=\"\">\n<h2 class=\"visually-hidden\">Share this article in your social network<\/h2>\n<\/section>\n<div aria-label=\"Article Comments\" class=\"article-content__widget-group article-comment\">\n<section class=\"comments__section\" data-aqa=\"viafoura-comments\" id=\"comments\">\n<h3 class=\"widget-title comments-anchor\" id=\"comments-area\">Comments<\/h3>\n<p class=\"comments__section-disclaimer\"> Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications\u2014you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings. <\/p>\n<details class=\"expansion-panel comments__section__list\">\n<summary class=\"expansion-panel__summary\">\n<h4 class=\"expansion-panel__summary-label\"> <span aria-hidden=\"true\" class=\"article-card__comment-icon\"> <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" fill=\"none\" height=\"16\" viewbox=\"0 0 20 20\" width=\"16\"><path d=\"M19.99 2C19.99 0.9 19.1 0 18 0H2C0.9 0 0 0.9 0 2V14C0 15.1 0.9 16 2 16H16L20 20L19.99 2Z\" fill=\"#555555\"\/><\/svg><\/span> <span>Join the Conversation<\/span> <\/h4>\n<\/summary>\n<\/details>\n<\/section>\n<\/div><\/div>\n\n<br \/>Will Trudeau\u2019s government breach the David Dodge Rule?<\/a><br \/>\n<br \/>2023-08-28 11:10:36<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Breadcrumb Trail Links News Economy Rising bond yields are putting Ottawa on a costly path when it comes to servicing the debt Published Aug 28, 2023 \u00a0\u2022\u00a0 Last updated 2\u00a0hours&#8230;<\/p>\n","protected":false},"author":2,"featured_media":37919,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/08\/no0825dodge.jpg?quality=90&strip=all&w=288&h=216&sig=scejmqq1WI32jCqSWiMMmg","fifu_image_alt":"","footnotes":""},"categories":[31],"tags":[],"class_list":["post-37918","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/37918","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=37918"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/37918\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/37919"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=37918"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=37918"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=37918"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}