EDC’s Stephen Poloz the next Bank of Canada governor

Expects a need to stimulate the economy: says we’re “not out of the woods yet…”

OTTAWA — Finance Minister Jim Flaherty has named Export Development Canada chief executive Stephen Poloz, 57, Bank of Canada governor, replacing Mark Carney.

Until speculation began to build about the long time it was taking to name a successor for the departing Carney, most markets and economists were convinced the job would go to the bank’s second-in-command, Tiff Macklem.

Analyst offered reactions ranging from “mild” to “huge” surprise, and offered several explanations for the choice, including Poloz’s superior private sector experience.

Flaherty refused to compare candidates, but said after an exhaustive search and a “wealth of talent to choose from,” Poloz, 57, emerged as an “excellent choice to lead the Bank of Canada into the future.”

He cited Poloz’s management experience running EDC, an organization of similar size to the Bank of Canada, adding that his position with the agency also brought him in direct working relation with Canada’s corporate sector.

Carney is leaving to take over the top job at the Bank of England, also praised his successor.

A trained economist, Poloz has been president and chief executive at EDC since 2011, joining the Crown corporation in 1999 as vice-president and chief economist. He also spent five years with Montreal-based BCA Research, and 14 years with the Bank of Canada in various capacities.

Macklem, a career public servant, has worked primarily at the bank and in the Finance Department in senior positions.

Poloz was one of three candidates interviewed by the finance minister in recent weeks on the recommendation of the bank’s directors. The identity of the third candidate to make the shortlist was not disclosed.

The new governor is seen as a team player who worked well with the Harper government during the economic crisis in 2008-09 in helping free up financing for Canadian firms working overseas. He is also thought to have been a candidate in 2007, when Carney was chosen, but at the time was regarded as lacking management experience.

Poloz gave every indication he intends to follow in Carney’s policy footsteps, including adopting a “flexible” approach to reaching the two-per-cent inflation target, and in continuing the bank’s low interest rate approach.

“We aren’t out of the woods yet,” Poloz said of economic conditions. “We’re in a recovery mode, but in a recovery that is not as robust as was anticipated … and I think we will have to stimulate the economy for a certain amount of time. I don’t know how long, but we will have to assist this process to ensure there is job creation” and growth continues.

Poloz takes on his new duties starting June 3. According the Bank of Canada website, the 2012 salary of the governor ranges from $431,800 and $507,900.

© 2013 The Canadian Press