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OTTAWA, May 1 (Reuters) - Canada’s new central bank governor, Tiff Macklem, may be seen by market watchers as an outsider, but the Montrealer is no stranger to the institution and brings with him a background that could prove helpful as the Canadian economy is pounded by the coronavirus pandemic and low oil prices.
A former senior deputy governor and chief operating officer at the Bank of Canada, Macklem, 58, left the country’s central bank in May 2014 and is the current dean of the Rotman School of Management at the University of Toronto, a top Canadian business school.
Macklem is also credited with helping then Finance Minister Jim Flaherty frame Canada’s response to the 2008 global financial crisis.
Born in Montreal, Macklem graduated from Queen’s University with an honors undergraduate degree in economics in 1983 before pursuing a masters and PhD in economics from the University of Western Ontario. He takes over as Bank of Canada governor on June 3.
“He’ll do a good job of reflecting the traditional views of the Bank,” said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets.
Macklem has worked for the central bank on and off since 1984 and is known for his interest in the transition to a green economy, a file he has worked on for Canada’s current finance minister.
In April 2018, Macklem was named chair of the Expert Panel on Sustainable Finance, a four-person panel that reported to Finance Minister Bill Morneau. The panel was instructed to look at ways mainstream finance could help with the transition to a low-carbon economy.
SECOND TIME LUCKY
Macklem told reporters he got to know about his appointment on Thursday, and assured Canadians the central bank will provide liquidity to the system and keep credit flowing.
“It’s going to be important that the Bank of Canada understand how climate change is affecting the Canadian economy, how it’s affecting the economy’s productive capacity ... and ultimately how it’s going to affect prices,” Macklem told a news conference where Morneau announced his appointment.
In recent months, Macklem has also spoken publicly about Canada’s economic recovery from the pandemic, which has seen non-essential businesses shuttered and officials urge people to stay at home.
“When you look forward a few months from now, hopefully the virus has receded and we’re getting back to work. Clearly that’s not going to be a snap back to normal,” he told Reuters in an interview last month.
Climate change policy could also feature in Canada’s economic recovery plan as officials grapple with the economic punch leveled by the coronavirus pandemic, Macklem told Reuters, as Ottawa looks to make big investments to spur economic recovery.
Transitioning to a greener economy could fit that mold.
“Climate change similarly is impacting Canadians all over the country. We are already seeing temperature changes and more extreme weather impact Canadians across the country,” Macklem said.
He was considered by many to be a leading contender to succeed retiring Bank of Canada Governor Mark Carney in 2013 but was passed over in favor of now-outgoing Governor Stephen Poloz. Carney would go on to serve as governor of the Bank of England.
Macklem is also a former associate deputy minister for Canada’s finance department, while also representing Canada at the G7, G20 and Financial Stability Board.
He has been a member of Scotiabank’s board of directors since June 2015. Macklem told reporters he planned to resign from the board next week.
Reporting by Kelsey Johnson, additional reporting by Steve Scherer in Ottawa and Nichola Saminather in Toronto; Editing by Denny Thomas, Steve Orlofsky