Amid the financial turmoil that descended on the world’s financial markets in January and caused the biggest drop in the Toronto stock market in seven years, there was one Canadian economist who was reassured by what he saw—Don Drummond.
As the senior vice-president and chief economist at the TD Bank Financial Group, Drummond was among the first to foresee a market downturn, recognizing in 2005 that the US sub-prime mortgage market was on weak foundations. “It was somewhat gratifying, having been on the pessimistic end of the forecast, to see the other banks racing to lower their forecasts down to our level,” says Drummond, BA ’76.
Drummond’s expert analysis of anything from government budgets to blips in the stock market features prominently in the national press, his razor-sharp commentary delivered with an Ontario twang that comes from more than 30 years of living in the Toronto-Ottawa corridor.
His forecasts often stagger some observers. Economics Prof. Don Ferguson, one of Drummond’s former instructors, recalls a prediction he’ll never forget. It was 2004 and the resurgent Canadian dollar had broken the 80-cent US barrier. “It was his view that it was going to stabilize at the 85-cent point and stay there for a long period of time,” Ferguson says. “What struck me was that was exactly what the dollar did.”
Drummond’s insight is almost certainly the product of his previous life as a federal bureaucrat. After earning his master’s degree at Queen’s University in 1977, he joined the Department of Finance in Ottawa, working alongside eight finance ministers and rapidly ascending the ranks, ultimately becoming associate deputy minister of finance before moving to the TD Bank in 2000.
He would work closely with the eccentric, pipe-smoking David Dodge who, in Chretien’s Liberal government of the 1990s, was the debt and deficit slashing deputy finance minister.
Compared to Dodge, Drummond was never one to draw attention to himself, choosing instead to quietly build his reputation. “He’s not a hail-fellow-well-met, he’s not gregarious,” says Jim Peterson, former minister of international trade in the Liberal government. “I don’t think he’s highly political in the sense that he goes out of his way to ingratiate other people. He lets his job speak for itself.”
Drummond’s proudest achievement would come during Paul Martin’s reign as finance minister, who he helped to eradicate the deficits racked up by the Trudeau and Mulroney governments. “I was there all through that period when the deficit was going up and up and up,” Drummond says. “I wouldn’t have been very happy with my career in the Department of Finance if I had left in 1993. I got a second chance to clean things up, things that I watched deteriorate.”
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