When Tiff Macklem (Artsci’83) started his new job as governor of the Bank of Canada in June 2020, it was two months after the country was shut down by the COVID-19 pandemic.
Forget about a honeymoon period to get used to the job. The world was, and still is, in crisis.
While doctors, nurses, and scientists work to get vaccines into the arms of Canadians, Mr. Macklem is focused on people’s wallets and employment. The main role of the central bank, according to the Bank of Canada Act, is “to promote the economic and financial welfare of Canada,” which is why Mr. Macklem is trying to steer the economy toward a resurgence.
“The sooner we beat this virus, the sooner large parts of our economy that have been badly affected can heal and start creating jobs again,” he says.
Normal activities such as eating in restaurants, shopping in malls, and taking vacations will hopefully resume in a few months. That’s why Mr. Macklem is predicting strong growth in the second half of 2021 and early 2022, although a complete recovery to pre-COVID-19 economic conditions will take some time.
This isn’t Mr. Macklem’s first experience helping the economy during a global crisis. He was Canada’s associate deputy minister of finance (under Minister Jim Flaherty) in 2008–09, when economic leaders around the world feared the global financial system was in danger of collapsing. (The collapse didn’t happen, but it was the deepest global recession we’d seen since the Great Depression of the 1930s.)
Mr. Macklem was the top international official in the Department of Finance at the time and learned some valuable lessons. “In a crisis you have to act quickly and you have to be bold,” he says. “You need to try [to] overwhelm the crisis.”
The pandemic has moved much faster than the 2008–09 financial crisis and is more global, affecting literally every person in the world. Mr. Macklem’s experiences in 2008–09 taught him the critical importance of collaborating with both Canadian and international officials, weighing the risks of various policy options, and listening to diverse opinions to come up with the best approach.
Fellow Queen’s alumnus David Dodge (Arts’65, LLD’02) knows exactly what Mr. Macklem is going through. Mr. Dodge served as the Bank of Canada governor from 2001 to 2008 and was on a plane flying home from Switzerland in 2001 when the Sept. 11 terror attacks happened.
Mr. Dodge feels Mr. Macklem is doing a great job leading the bank through this challenging time.
“The fact that he has spent the last six years or so in Toronto with the business community means he has a very good and open line of communication with the financial markets, which is always helpful,” says Mr. Dodge, referring to Mr. Macklem’s term as dean of the Rotman School of Management before taking the governor’s job.
The Governor of the Bank of Canada has been described as the third-most important economic figure in government, behind only the federal minister of finance and the prime minister. So it might come as a surprise that when Mr. Macklem first came to Queen’s in 1979, he had no idea economics was going to be a part of his future.
He started in geography while taking the odd economics course. He soon found himself drawn to economics because he liked the way it changed his perspective and made him think differently.
He cites an example of how rent control was used because of high inflation in the 1970s. As a student renting an apartment, he thought rent control was good. But when he went to his economics class, they discussed how capping rent would cause people to build fewer apartments, which would reduce the supply of available places to live.
“Economics really broadened the way I was thinking,” Mr. Macklem says.
“It makes you think beyond the direct and obvious consequences and think about what might be the unintended consequences of a policy.”
Soon he was reading C.D. Howe Institute policy papers and books by now-retired Queen’s economics professor Tom Courchene. By fourth year, he took only economics courses to have enough credits to graduate as an economics major and then went on to earn a master’s degree and a PhD from Western University.
The only thing more important to Mr. Macklem than discovering a love for economics while at Queen’s was starting to date Rosemary Cuthbertson (Com’83). The two were married three years after graduating. They have been together for more than three decades now and have three children.
Two of their children – Holly Macklem (Sc’17) and Richard Macklem (Artsci’13) – graduated from Queen’s, continuing the family’s long history with the university. Tiff’s father (Dick Macklem, Com’52) and uncle (Peter Macklem, BA’53) are among his many relatives who also called themselves Gaels.
Dick and Peter grew up in Kingston near campus at 18 Barrie St. Dick eventually moved to Montreal (where Tiff was raised), and Peter went on to a groundbreaking medical career that saw him posthumously inducted into the Canadian Medical Hall of Fame.
When Dick and Peter’s mother, Katherine Bermingham Macklem, passed away in 1993, the family donated the house to Queen’s, and it is now the administrative home for the Faculty of Health Sciences. Tiff Macklem is proud that his grandmother’s home, which he used to visit as a child, is now a part of the university.
“My uncle was a physician, so my grandmother had a soft spot for the medical school,” he says. “The idea that [Health Sciences Dean Dr. Jane Philpott] is in her house would make her very happy. I just think Queen’s has done so much for our family. It’s a wonderful feeling to give back.”
So, why do so many Queen’s grads become governors?
Mr. Dodge and Mr. Macklem point to the economics department’s connections to Ottawa in the 1960s, ’70s, and ’80s, when many professors were advising politicians and high-level civil servants.
“I do think in that era Queen’s had a strong economics department with a lot of people thinking deeply about economic policy. It was very connected to Ottawa,” says Mr. Macklem. “I am sure that rubbed off on all of us.” The economics department was also unique in that lessons went beyond the statistics and formulas that were taught in textbooks. There was a stronger focus on the real-world impacts of economic policies compared to other universities.
“If you are trying to explain why three of us from the Queen’s economics department from the 1960s, ’70s, and early ’80s became governors, you have to put it down to there was a policy activism at Queen’s that was really quite strong,” says Mr. Dodge. “[The lessons were] more engaging and less academic.”