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Stephen Poloz used his first public appearance as Bank of Canada Governor Thursday to establish that he is like his predecessor Mark Carney in one very important way – but very much unlike him in another.
Speaking to the House of Commons finance committee, Mr. Poloz clearly stated, to the surprise of no one, that he plans to keep to the bank's long-standing monetary policy script. So the bank will continue to aim for inflation at the midpoint of a target range of 1 to 3 per cent. Interest rates will rise "at some point" – but evidently not until the economy shows sustained improvement.
So, same core message. Where Mr. Poloz differed from Mr. Carney was that he seemed determined to show he was a central banker, full stop – not a rock star high priest of the economy who would use his pulpit to advocate for appropriate economic behaviour, as Mr. Carney frequently did.
Committee members seemed a bit puzzled by the UnCarney before them. There were a few things missing from Mr. Poloz's opening remarks, so they asked: What did he think about high household debt levels? Income inequality? Dead money on corporate balance sheets? On Twitter, Liberal MP Scott Brison made fun of other committee members for asking dumb questions, but then he inquired what Mr. Poloz thought about unpaid internships.
If these seem like funny topics to put to a central banker, they certainly weren't for Mr. Carney. He often strayed from the script, opining on the Occupy Movement, income inequality and corporate strategy. He chimed in along with Finance Minister Jim Flaherty in expressing alarm over rising household debt levels in Canada, and made the term "dead money" famous when he exhorted corporations last August to stop hoarding cash on their balance sheets. "Their job is to put money to work and if they can't think of what to do with it, they should give it back to their shareholders," he said. After being widely criticized, Mr. Carney first stood by his statements, then, tired of the hounding, glibly declared in April that the alleged problem was solved. "Dead no longer," he said. "Resurrected money, there you go."
Now, compare that with Mr. Poloz on Thursday. Was household debt one of the biggest risks Canadian banks face?, he was asked. It "would certainly make the list" he said, though he seemed more impressed by the "very fortunate" effort by households to "step up and expand their spending" when rates were slashed. But is it the most important risk? He wouldn't bite. "It is obviously an important risk," he said, following with an answer that was so nonchalant I put my pen down. Later, he said simply it was up to indebted young people to "do the arithmetic" to ensure they can manage their debt when rates do rise. That's hardly an alarmed pitch to delever. Asked about income inequality, Mr. Poloz replied central bankers "really only have a modest influence on this" by which he meant, keeping inflation under control. Yawn.
Mr. Poloz may yet change his style – as a former economics journal editor and chief economist, he's a veteran of sounding off on a range of topics. For now, he's content to do the job for which he was hired: to keep a steady hand on the Canadian economy. In that sense, he's no different than Mr. Carney. That may cause dismay for headline writers, but it should be reassuring to all Canadians.
Sean Silcoff is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights , and follow Sean on Twitter at @seansilcoff .
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