Conservatives caution Bank of Canada is becoming 'ATM for Trudeau'
Bank of Canada veteran Sharon Kozicki is the pick of economists to be the central bank’s next second in command.
Kozicki, currently an adviser to Governor Tiff Macklem, is the clear front-runner in a Bloomberg survey on who will replace Carolyn Wilkins after she steps down as senior deputy governor next week. Other contenders include two current deputies, Paul Beaudry and Toni Gravelle. Stephen Murchison, a bank veteran now seconded to a pension fund, is on the list, as is Jean-Francois Perrault, the chief economist at Bank of Nova Scotia in Toronto.
The transition in the top ranks comes at a critical time for the Ottawa-based central bank. Since taking the reins in June, Macklem has fine-tuned the nation’s first-ever emergency quantitative easing program while fending off political criticism that he’s financing Prime Minister Justin Trudeau’s deficit spending agenda. The bank is also in the homestretch of renewing its five-year mandate agreement with the government, a process Wilkins was leading.
Independent members of the bank’s board of directors are making the selection, and any appointment must be approved by Trudeau and Finance Minister Chrystia Freeland, though Macklem is expected to have significant input. Initial interviews should be concluded by the end of January, according to people familiar with the process. It’s unclear when the final decision will be made. A Bank of Canada spokesperson declined to comment on the timing.
Bloomberg asked 10 economists to rank the three mostly likely candidates for the senior deputy role, by order of plausibility. Six named Kozicki as the favorite, and all but one had her name on their list.
Before joining the Bank of Canada in 2006, Kozicki, 56, worked as an economist for the Federal Reserve Board in Washington, D.C., then as a vice president at the Federal Reserve Bank of Kansas City. She holds a Ph.D from the University of California, San Diego.
In her current role, she was a key player in the bank’s work on the monetary policy framework during the 2016 mandate renewal. She has conducted research into unconventional monetary policy, housing price dynamics, inflation and productivity.
In addition to serving as adviser to the governor, Kozicki is secretary to the policy setting Governing Council. To become Wilkins’s replacement, she would need to leapfrog the deputy governor role -- but that’s happened before. Wilkins was an adviser to the governor and governing council secretary before she became senior deputy under Stephen Poloz.
In selecting Ottawa-born Kozicki, the bank has the opportunity to redress a gender imbalance in its senior leadership. Wilkins’s departure means Governing Council will be all male for the first time in more than a decade.
That’s sure to raise eyebrows at a time when the bank has been vocal about achieving more representation of women and minorities in its top ranks, and with diversity being a key pillar of the Trudeau government’s agenda.
Beaudry, 60, who holds a Ph.D from Princeton, joined the bank in 2019 as a deputy governor after a lengthy academic career, most recently at the University of British Columbia. He has written extensively on business cycles and the labor market.
Beaudry received five votes in the economist survey, the most after Kozicki. Everyone else received two votes or fewer.
Gravelle, 56, joined the bank in 1996 and became deputy governor last year. Prior to that, he was seconded to the department of finance in 2013 before returning to lead the bank’s financial markets department. He holds a Ph.D. from Western University in London, Ontario.
Murchison, 49, is currently on secondment from the Bank of Canada working for Caisse de Depot & Placement du Quebec, but is due to return to the bank in January. Like Kozicki and Gravelle, he has extensive experience at the bank, having joined as an economist in 1997. He was appointed adviser to the governor in 2015 before taking the consultant job at the Caisse.
He led the bank’s digital currency research, has a masters degree in economics from Wilfred Laurier University in Waterloo, Ontario, but doesn’t hold a Ph.D, which could weigh against him.
Perrault, 49, is a francophone with private-sector expertise. He worked for the central bank and federal government earlier in his career and has held positions at the International Monetary Fund and World Bank. He has a masters degree from the University of Ottawa, but like Murchison -- and Wilkins, in fact -- doesn’t hold a Ph.D.
Other names on the list included:
- Jean Boivin, head of economic and markets research at the Blackrock Investment Institute
- Mark Chandler, former head of Canadian fixed income and currency strategy at RBC Capital Markets
- Ed Devlin, former head of Canadian portfolio management at Pacific Investment Management Co.
- Sheryl King, adviser to the governor at the Bank of Canada
- Tim Lane, deputy governor at the Bank of Canada
- Rhys Mendes, managing director of the international economic analysis department at the Bank of Canada
- Eric Santor, adviser to the governor at the Bank of Canada
- Larry Schembri, deputy governor at the Bank of Canada
- David Wolf, portfolio manager in the global asset allocation group at Fidelity Investments
The bank is looking for a bilingual candidate who has a “sophisticated understanding of economics and finance, a deep knowledge of Canada’s financial system and its major players, and superior analytical and communication skills,” according to the job post. Recruiting firm Boyden is assisting in the search process.