Former bank of Canada governor Gordon Thiessen once said that the ultimate duty of the top central banker was to deliver boring speeches in good times. To Mark Carney, the current governor, the times are far from good \u2014 and his speeches are far from boring.
In fact, Carney has become the leading spokesman in Ottawa on the economy, quite a departure from Canadian tradition.
Whether by design or happenstance, Carney has assumed a role formerly played by the finance minister. Neither the media nor the official Opposition seem to care much anymore what the finance minister thinks about the economy.
The finance minister in the past may have been the most important member of cabinet, next to the prime minister. But not anymore. Jim Flaherty, the current finance minister, is just another member of cabinet, while the profile of International Trade Minister Stockwell Day continues to rise.
That shouldn\u2019t be a surprise after last year\u2019s economic statement, in which Flaherty predicted continued budget surpluses and no recession while every credible economist in the country was forecasting the opposite. Given the outcry over that economic update, Flaherty was probably lucky to have kept his job. But he hasn\u2019t kept his credibility. Since the outcry over the economic statement, the Harper government has been routinely second-guessed by Kevin Page, the parliamentary budget officer.
Sure, the media still seek out Flaherty on matters involving the G-20 and other international matters. But Carney is probably getting more attention than any other BofC governor.
The overly partisan and flippant economic statement of last year will always be remembered for almost bringing down a newly elected government because the Opposition parties were incensed enough to form a coalition. But it also set in motion a change in mandate for Canada\u2019s central bank.
Media representatives tend to be very judgmental about the people they cover, and will avoid as much as possible anyone who may not be credible. It is a similar story with the Opposition, which wrote off the finance minister months ago. As a result, all eyes and ears are on Mark Carney and what the BofC governor is thinking about the economy.
In the short term, the Harper government probably doesn\u2019t mind the governor getting all this attention.
So far, Carney has generally been rosy in his forecasts as to when Canada will pull out of the recession, and the government looks good by association. Should Carney turn out to be overly optimistic, the governor can take the blame, not the government.
This government has had a comparatively easy time during this recession, and the attention on the BofC governor probably has been one of the reasons.
Overall, the current government hasn\u2019t had much to say about the recession beyond an expensive feel-good advertising campaign on how well its recovery plan has been working.
When the BofC was created 75 years ago, the central bank was intended to be well out of the political arena as a neutral agency that would remain independent of the elected government so that it could set interest rates, manage the money supply and defend the currency free of the cut and thrust of partisan politics.
From time to time, politicians have interfered with that independence. John Diefenbaker fired governor James Coyne. The Chr\u00e9tien government refused to renew John Crow\u2019s appointment and started the tradition of appointing governors from outside the bank.
Now, the perception that the BofC is the agency mainly accountable for the state of the economy has taken over the role formerly held by an elected minister and the Department of Finance.
How long can the central bank remain out of the political arena when it bears most of the accountability for the economy? And, of course, what happens when the recession is finally over? Will the BofC governor face the nation on key policy issues such as the deficit and pension reform? \tIE<\/b>
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