Former Bank of Canada Governor David Dodge says whoever succeeds Stephen Poloz when his term ends next year needs to have a good understanding of the changing global economy.

“I think central banks around the world –  including ours –  have been appropriately struggling to understand what the implications of the changing structure of our economy are … and how monetary policy should be conducted,” said Dodge, now senior advisor at Bennett Jones, in an interview Monday with Jon Erlichman.

Dodge said Poloz, who will be stepping down from his role as Bank of Canada governor in June 2020, made good judgment calls throughout his six-year tenure.

“I think that the judgment – and I think that’s the right word to use – of Stephen Poloz and his colleagues at the Bank of Canada in this regard has been very good.”

“There was the period from 2012-17 when, normally, one would have thought that interest rates would start to come back up and the Bank of Canada held them down, judging that there was actually more capacity in the economy than we had thought based on past models – and it turned out they were right in that judgment. I think they were [also] right when they started to finally move the rate up as things strengthened.”

However, Dodge said the central bank will continue to struggle to calibrate its models to reflect changes in the economy, and will still need to weigh in on the changing digital landscape and how that will impact payment systems. He also said climate change will be an important issue for future central bankers to address.

Having a good understanding of these issues will be crucial for Poloz’s successor, Dodge said.

“I’d put it at the top of my list that issue of really understanding and continuing to build a team at the bank that can bring to bear a judgment in difficult times – and also as we move into a fully digital world, how the bank is going to operate in that regard.”

“But we know that at some point the issue of climate issue is going to perhaps reach a certain tipping point and that will change a lot of expectations in markets – and financial markets will have to deal with it, and central banks have to be prepared for that.”

The Bank of Canada announced Friday Poloz won’t seek a second term as Bank of Canada governor, and that a search for his successor is currently underway.