Finance Minister Jim Flaherty shocked Bay Street Thursday by forgoing the obvious choice to follow Mark Carney as governor of the Bank of Canada and instead named Stephen Poloz to the position.
For months, investors around the world have been almost universal in assuming the next governor of Canada’s central bank would be Tiff Macklem, the current No. 2.
But this isn't the first time the government has made an unpredictable appointment, and not every new hire has been well-received. We've delved into The Globe's archives to gauge how observers reacted to past governor appointments.
GRAHAM TOWERS, 1934-1954
Nearly eight decades after he became the first governor of the Bank of Canada, Graham Towers is still the youngest person to hold the position, which he assumed at 37. The Globe wrote in its front-page story of his appointment that despite his relative youth, Mr. Towers was “rated as one of the outstanding young bankers of Canada.” Toronto’s financial community was also pleased with the hire. “He has a worldwide knowledge of finance and social matters, and will make a very competent executive,” said the general manager of the Bank of Toronto.
JAMES COYNE, 1955-1961
Early reaction to James Coyne’s hiring was preoccupied with the incoming governor’s relationship status and pay rate. Here’s the opening sentence of The Globe’s front-page report: “A 44-year-old bachelor, James E. Coyne, was named today to the most highly paid post in the Government service, governor of the Bank of Canada.” Soon after, the article mentioned that Mr. Coyne would receive a $50,000 annual salary, which amounted to “$13,000 more than Prime Minister [Louis] St. Laurent draws in pay and allowances.” Of course, Coyne would later become the subject of much media attention in what was dubbed “the Coyne Affair,” a public battle with the Diefenbaker government that that concluded with Mr. Coyne’s resignation in 1961.
LOUIS RASMINSKY, 1961-1973
Louis Rasminsky received highly favourable press when he became the central bank’s third governor. An article in The Globe noted that Mr. Rasminsky’s hiring was “a popular one in Ottawa, for his name is well-known in international financial circles where Canada’s prestige was so badly damaged by the Coyne affair.” One of Mr. Rasminsky’s greatest skills, according to a Globe profile, was his ability to express complex economic ideas in simple language. Former classmates of Mr. Rasminsky at the University of Toronto remembered him “as one of the most brilliant students ever graduated by the university.”
GERALD BOUEY, 1973-1987
After the breathless coronation of Mr. Rasminsky, The Globe’s coverage of Gerald Bouey’s hiring was decidedly different. There was no boasting of his intellect from colleagues and no mention of Mr. Bouey’s personality. Instead, The Globe’s coverage was heavy on policy talk and how Mr. Bouey viewed the role of the central bank. “Mr. Bouey said yesterday the reduction of the level of unemployment in the country remains the bank’s No. 1 priority,” the article said. “He remarked that he has been very closely involved in the setting of central bank monetary policy over the past year and he feels its present direction is right for the current situation.”
JOHN CROW, 1987-1994
Bay Street was less than enthused when John Crow was named the central bank’s fifth governor. The Globe wrote that his appointment “was greeted with near-yawns” by those in Toronto’s financial community, who had hoped for an outsider. Mr. Crow also had a reputation for being abrasive, though The Globe’s report said “sources close to the central bank say he has improved his ‘people skills’ in recent years.” By the end of his tenure, any notion of better behaviour was long forgotten. “Crow routinely adopted an icy, lecturing tone reminiscent of Margaret Thatcher,” said a Globe story from 1994, which also described the British-born, Oxford-educated Mr. Crow as “aloof” and “arrogant.”
GORDON THIESSEN, 1994-2001
By all accounts, Gordon Thiessen was a breath of fresh air after Mr. Crow. “Gordon will come with a different style, a kinder, gentler style,” one Bank of Canada insider told The Globe. Another source said Mr. Thiessen was “sensitive” to other people’s positions on issues. “I’ve never heard him shout at anybody,” the person said. Just before Mr. Thiessen officially took the position, a Globe feature described him as having “a honeymoon halo that is already astonishingly bright” after the tumultuous Crow years.
DAVID DODGE, 2001-2008
To some degree, David Dodge’s appointment was a shock. He was the first governor recruited from outside the central bank, and early stories painted him as the outsider: “If Alan Greenspan brought a Wall Street pinstripe style to his job as the U.S. central banker, David Dodge will bring his professorial tweed jackets to his new role as governor of the Bank of Canada,” The Globe wrote. Most concerns weren’t about Mr. Dodge’s academic background, however, but about his independence: he had served previously under then-Finance Minister Paul Martin. Globe columnist Madelaine Drohan wrote that any such concerns were blown out of proportion. “Finance Department lore is replete with tales of flaming rows between Mr. Dodge and Mr. Martin over points of policy,” she wrote. “Some who know both men suggest that Mr. Dodge might savour going up against his old boss again in a more independent capacity.”
MARK CARNEY, 2008-2013
The Mark Carney lovefest was already under way when he was announced as the central bank’s next governor on Oct. 4, 2007. The following day, articles in The Globe described him as everything from “whiz kid” to “rising star” in our nation’s capital. “[Mr. Carney’s] been successful in athletics, academics and business, and there’s every reason to think he’ll be a resounding success at the Bank of Canada,” a former colleague of Mr. Carney’s told The Globe. More than five years later, it’s tough to argue otherwise.
STEPHEN POLOZ, 2013 -
Stephen Poloz is an unknown commodity outside Ottawa. Mr. Poloz, 57, is a respected economist with a PhD from the University of Western Ontario. As head of Export Development Canada, a Crown corporation that finances and insures exports, Mr. Poloz oversaw an expansion of the institution’s power to do more domestic lending. Mr. Poloz also served as EDC’s chief economist and as president of the Ottawa Economics Association.
With files from Kevin Carmichael and Bill Curry