Tiff Macklem is the closest thing Mark Carney has to an understudy at the Bank of Canada.
But that’s where the obvious similarities end between the Governor and his top deputy, Mr. Macklem, now the leading candidate to replace Mr. Carney when he moves to the Bank of England next July.
Where Mr. Carney, 47, is brash and media savvy, qualities cultivated during a long career as a Goldman Sachs investment banker, Mr. Macklem, 51, is a bookish macroeconomist and productivity guru, who’s never worked outside government.
And yet bank watchers say Mr. Macklem is the perfect fill-in – steeped in the workings of the bank, global financial markets and the key players that inhabit this arcane world.
Mr. Macklem is the most likely successor precisely because he represents stability and continuity, said Sébastien Lavoie, assistant chief economist at Laurentian Bank of Canada in Montreal.
“He knows the people and how the machine works,” Mr. Lavoie explained.
“He’s obviously on top of things and up to date. It would make the transition very smooth if he’s the next governor.”
In many ways, Mr. Macklem is probably more typical of the Bank of Canada governors that preceded Mr. Carney, who did a short apprenticeship at the Finance Department, but spent most of his working life in the private sector.
Mr. Macklem, on the other hand, has never worked outside government, joining the bank after doing a master’s in economics at the University of Western Ontario.
He left to do his PhD, also at Western, and rejoined the bank in 1989.
Friends describe him as smart, but low-key and quietly ambitious – the antithesis of Mr. Carney’s swagger. An avid skier, he’s married, with three children.
After getting bored with downhill skiing, he mastered telemark skiing.
While Mr. Carney grew up in tiny Fort Smith, NWT, and Edmonton, Mr. Macklem hails from the moneyed Montreal enclave of Westmount, where he attended Selwyn House School, and later Lower Canada College. His father was chief financial officer of the Birks jewelry chain. Mr. Macklem declined to be interviewed for this interview, citing the bank’s blackout period leading up to next week’s rate decision.
As senior deputy governor, Mr. Macklem is now the central bank’s chief operating officer, and second in command, serving on the board of directors and on its governing council.
Over the past two decades, he’s been closely involved in nearly all of the bank’s major initiatives, including the move to an explicit 2-per-cent inflation target in the early 1990s, its angst about the country’s lagging productivity, its push for tighter global banking standards and greater financial stability, and of course, ultra-low interest rates. In recent speeches, Mr. Macklem has offered solutions to the productivity problem, including tapping older workers and better training.
Mr. Macklem has joined Mr. Carney in chastising companies for not investing enough in machinery, equipment and new technology.
He has also been a champion of inflation targeting. In a speech last month, he credited the bank’s 2-per-cent goal for helping people and businesses plan spending and saving, reducing strikes and smoothing out fluctuations in growth and unemployment.
Mr. Macklem cut his teeth among the world’s top monetary and economic policy makers, after moving in 2007 to the Finance Department as associate deputy minister, where he was the government’s liaison with the Group of Seven and the newly created Group of 20 during the financial crisis.
“Tiff” is actually a contraction of his middle name Tiffany – the name of a family doctor who delivered generations of Macklem babies. His first name is Richard.
Wearing a name like that wasn’t always easy for a studious, short kid at the all-boys high school he attended in Montreal. But Michael Shetler, a classmate and lifelong friend, said Mr. Macklem took it all in stride, and was well liked.
“He was balanced at a very young age,” Mr. Shetler said, pointing out that Mr. Macklem was a good student, but also athletic and very social.
Another friend described him as “a really smart, low-key guy.”
The one knock on Mr. Macklem is that he doesn’t have private sector experience in financial markets. Then again, neither did most of Mr. Carney’s predecessors at the central bank.
“It would be helpful for future governors to have that kind of private sector experience,” acknowledged Douglas Porter, deputy chief economist of BMO Nesbitt Burns.
Nor does Mr. Macklem have the oversized personality and media magnetism of Mr. Carney.
But that might not be a bad thing, suggested, Mr. Porter, who did a masters at Western alongside Mr. Macklem.
“A low profile may be a good thing,” Mr. Porter said. “It might be the best thing for the economy if monetary policy wasn’t a headline issue.”
Had he not accepted a job at the Bank of England, Mr. Carney’s rising star power might eventually have caused tension with Finance Minister Jim Flaherty and Prime Minister Stephen Harper. And for that reason, the low-key competence and humility of Mr. Macklem may now have new political currency.
Being the leading candidate is no guarantee of getting the job. A lot could happen in the seven months before Mr. Carney exits.
As Bank of Nova Scotia economist Derek Holt pointed out in a research note Tuesday, the pundits were dead wrong the last two times the bank was looking for a new governor, failing to predict the selections of Mr. Carney and David Dodge.
With files from reporters Tavia Grant and Paul Waldie