Skip to main content
sean silcoff

ROB Insight is a premium commentary product offering rapid analysis of business and economic news, corporate strategy and policy, published throughout the business day. Visit the ROB Insight homepage for analysis available only to subscribers.

Official Ottawa and Bay Street are supposedly agog that the government has gone with a "surprise" choice in hiring Stephen Poloz to replace Mark Carney as Governor of the Bank of Canada, bypassing heavily-favoured Tiff Macklem, Mr. Carney's No. 2. One look at Mr. Poloz's résumé should be enough to calm anyone's nerves. He is a well-rounded choice for several reasons.

One reason is that, despite being an outsider, he is highly unlikely to take a different tack than Mr. Carney on monetary policy. While Mr. Poloz, CEO of Export Development Corp., asked Thursday for a bit of time to get acclimatized to his new gig, he offered his unqualified blessing for the bank's most recently updated policy stance.

Some questioned whether his experience at EDC meant he'd be sympathetic to exporters who have suffered the effects of a strong loonie. But don't forget monetary policy in Canada is made by committee and there seems little reason why the bank's goal will change from its current objectives of supporting economic growth, increasing employment and maintaining price stability.

Mr. Poloz's views appear to align with those of Mr. Carney: the economic recovery is not as robust as anticipated, continued stimulus is required – for how long, we don't know. Mr. Poloz said he thought the outlook for the economy was "promising," but don't confuse that for unrealistic optimism.

So why is Mr. Poloz the best choice to be Governor? Three things stand out. First, he spent 14 years at the central bank earlier in his career, including a stint running its all-important research division. So he's hardly an outsider to the bank, even if his tenure predated the Great Recession. Mr. Poloz has private-sector experience, having worked for five years at Montreal-based economics research firm BCA Research. Mr. Poloz served as managing editor of its world –renowned publication International Bank Credit Analyst – where he presciently warned in June 1999 that global equity valuations were as stretched as they had been prior to the 1987 stock market crash.

Most importantly, he has spent the past 14 years at Export Development Canada, first as chief economist and senior vice-president of corporate affairs and for the past two years as chief executive officer. Mr. Poloz has been the export agency's top communicator – no small consideration heading into his next appointment. He has also held the top job at a significant Crown corporation that has close ties to the nation's corporate leaders and deep institutional understanding of the underpinnings of trade and global economics and how major Canadian exporters fit within that mix.

His experience is well-rounded compared with that of Mr. Macklem, who other than a three-year stint as associate deputy minister of finance, has spent his non-academic career at the bank. Mr. Poloz may lack the close working relationship Mr. Macklem has with other central bankers through their dealings since the credit crisis – presumably just a temporary shortcoming – but the incoming Governor did meet last year with 75 Canadian CEOs and brings what he described as "in the field" knowledge to the job of top banker.

Come to think of it, that kind of broad exposure to corporate leaders was viewed as an asset when Mr. Carney was named Governor. That choice turned out pretty well.

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.