The Bank of Canada, governed by five white men, has a long way to go with Macklem newly championing diversity

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Bank of Canada Governor Tiff Macklem did a brave thing on May 13: he delivered a speech that he knew would expose him and the institution he runs to charges of hypocrisy.

The title of his remarks was “Including everyone helps us all.” Macklem talked about the importance of diversity, noting that research on the question is settled: strategy and decisions made by leadership teams that feature women, racialized individuals, and disabled people do better than C-suites and boards of directors that are dominated by white men. “Diverse and inclusive groups make better decisions,” Macklem said. “That’s because they can avoid groupthink that happens when decision-makers all have similar backgrounds and approach problems the same way.”

All three of the Bank of Canada’s interest-rate decisions this year have been made by a group of five white men. Three of them are graduates of London, Ont.-based Western University. The Governing Council is the opposite of diverse.

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Does that make Macklem a hypocrite? No. He’s been waiting for his board of directors and Finance Minister Chrystia Freeland to choose a new senior deputy governor since Carolyn Wilkins retired in December. That choice will almost certainly be a woman.

Nor can Macklem do much about the systemic failings of a profession that has long been ruled by men and done little to tear down barriers faced by others. Universities and professional associations have finally started to address the barriers faced by women and minorities, but for now, the pool of non-white, non-male economists with the experience required to work in senior positions at a central bank is relatively small.

There were three women on the six-member Governing Council at one point during the tenure of Stephen Poloz, the previous governor. Poloz was largely responsible for putting Viola Desmond on the $10-bill, so he showed he was committed to diversity. But when Agathe Côté left in 2016 and Lynn Patterson resigned in 2019, Poloz decided male candidates would make the best replacements. (Cabinet chooses the senior deputy governor, but the governor selects the remaining four deputies.)

“We’re not as representative as we should be,” Macklem told reporters after his speech. “I am committed to making progress on that. It’s going to be difficult to give you a specific timeline, but as I said, it’s something that is important to me, it’s important to our board of directors and I do expect to see progress.”

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Macklem stopped there. His speech listed the various things the Bank of Canada is doing to encourage diversity in the profession, which might help in the longer term. If he is committed to doing something in the shorter term, he could expand the Governing Council. The governor and the deputy governor are the only leadership positions that exist in the Bank of Canada Act. Former governor Gordon Thiessen created the council in the 1990s to show the public that monetary policy wasn’t a one-man show. It might now be time to demonstrate that the central bank isn’t a five-man operation.

This article first appeared in the FP Economy newsletter. Sign up here to get it delivered to your inbox every Monday.