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The Bank of Canada building is seen in Ottawa, Wednesday, April 15, 2020.Adrian Wyld/The Canadian Press

Finance Minister Bill Morneau is expected to announce a replacement for Bank of Canada Governor Stephen Poloz on Friday.

A senior government source, who was not authorized to publicly speak about the matter, said cabinet has decided on new central bank governor but would provide no further details.

A special committee of independent directors of the bank’s board conducted the formal search process for Mr. Poloz’s successor, which began in late December.

Two names were submitted to the cabinet for consideration.

Senior Deputy Governor Carolyn Wilkins, the bank’s second-in-command who appears regularly with Mr. Poloz at press conferences and parliamentary hearings, is expected to be on the shortlist and is widely considered the front-runner.

That status has only been enhanced during the COVID-19 crisis, as Ms. Wilkins has overseen the central bank’s emergency measures to stabilize financial markets and keep credit flowing – perhaps the most complex web of market actions the bank has ever undertaken.

“A few months ago, it seemed like picking someone to engineer a smooth transition from a fairly stable position. Now, it is to carry on unprecedented action in a crisis," Queen’s University economist Don Drummond, a former senior official in the finance department, said in an e-mail.

“The crisis argues for someone with deep market experience … it may also argue for someone who is thoroughly tested. Not the time to take a chance on someone who might ‘grow into the job.’ All points to Carolyn to me.”

The Bank of Canada has never had a female governor. Katie Telford, the Prime Minister’s chief of staff, has encouraged the appointment of women to senior roles in government.

Another leading candidate is Deputy Governor Paul Beaudry, one of the country’s top authorities on monetary policy. He would be the first francophone to hold the job.

The top contender outside the bank is Tiff Macklem, who lost out to Mr. Poloz in 2013. Mr. Macklem, then the senior deputy governor, was considered the front-runner to replace Mark Carney when he left to run the Bank of England. Mr. Macklem is now the dean of the Rotman School of Management at the University of Toronto.

Former Bank of Canada Governor David Dodge said Mr. Poloz’s successor faces enormous challenges in managing fiscal and monetary policy markedly different from the 2008-09 economic crash. In particular, he said, the central bank’s first foray into quantitative easing – the large-scale purchasing of government bonds in the open market, announced two weeks ago – will complicate the job for the next governor.

“It’s an enormous challenge when in fact we are going beyond just the provision of liquidity that the bank is supposed to do, to taking essentially a permanent position and blowing up the balance sheet of the bank,” Mr. Dodge said.

The new governor will also have to work co-operatively with other central bankers, particularly in the United States, Europe and China, to manage the situation, he said. “It is a global problem where in fact we are all creating liquidity and the balance sheets of the central banks are building around the world to try to deal with this problem … how does that affect us and where do we fit and how [do] we participate in that global challenge?”

Mr. Poloz, who turns 65 in October, announced late last year that he wouldn’t seek a second term when his current seven-year mandate ends on June 2.

In recent weeks, the central bank has launched a flurry of measures as the Canadian economy plunged into recession, with shuttered businesses and mass unemployment, caused by the spread of the novel coronavirus.

However, there was no indication that the government wanted Mr. Poloz to extend his stay, according to sources.

A confidant of Mr. Poloz told The Globe and Mail that the governor is a public servant at heart and he would have remained at the helm of the central bank had Ottawa asked him. The Globe is not revealing the names of the confidant and other sources because they were not authorized to speak publicly about sensitive discussions involving Mr. Poloz.

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