Rebekah Young is not your typical banking economist. Now, she doesn’t take on the typical job of banking economists.
Ms Young – a former mining engineer before joining the federal civil service, the International Monetary Fund and, finally, the Bank of Nova Scotia BNS-T in 2019 – was named the first head of the economy this month. the bank’s inclusion and resilience.
Concretely, this vague title means that the economics department of Scotiabank focuses more on research and the recommendation of public policies. Ms. Young will serve as a leading commentator on changing economic trends – such as climate change, technological transformation and demographic shift – and the inequalities and vulnerabilities these changes expose in certain segments of the population.
“I would liken it to ‘thought leadership’ – not hard-core economics,” Ms Young said in an interview last week. “I’m going to try to take a step back and look at some of the noise, look at the longer-term trends that aren’t captured in our [statistical] modeling.”
“In this role, I will not shy away from covering these trends, but also [asking] what governments should be doing in this space,” she said.
Traditionally, this has not been a strength of the economic departments of major banks. They excel in the timely analysis of what economists call “high-frequency” economic data, that is, the relentless stream of month-to-month economic indicators that come out of Statistics Canada. The banks’ message is generally aimed at investors and the financial community, ie their customers.
They left the deeper dives into social policy and its economic implications to think tanks and academics. They have not excelled in addressing issues that affect the country’s less fortunate and most vulnerable economic actors.
Yet in recent years economists at big banks have become more willing to go deeper into policy research. Most notably, Royal Bank of Canada, the country’s largest bank, operates a thought leadership team that has focused on these types of emerging policy issues over the past few years.
But the COVID-19 pandemic and the complex web of economic consequences that have run through the crisis have been a serious wake-up call. Economists have a new appreciation for the need to understand the uneven outcomes and risks of rapidly changing economic events and policy responses to them.
“It was striking to us that some of these concerns that we would typically have considered more social had really big impacts on people’s lives – and, ultimately, the economy. I felt that people in Bay Street were underserved,” said Jean-Francois Perrault, Scotiabank’s chief economist (and Ms. Young’s boss).
The first product of Ms. Young’s new term, slated for release this week, is a report on the underutilization of the academic skills of new immigrants. She notes that two-thirds of newcomers enter the country with college degrees, but only just over a third get jobs related to their degrees.
“When I do some quick numbers on the back of the envelope, I actually find it’s not that bad for the Canadian economy. But it’s really a big problem for households that suffer an annual salary of $25,000 to $30,000 because they don’t use their education.
She is working on another report regarding net zero carbon policies and the future of the oil and gas industry. She thinks we may be underinvesting in oil and gas development, based on realistic estimates of future supply needs that may not be as rosy as carbon-cutting advocates envision. .
“I would call it a bit like ‘the emperor has no clothes’,” she said. “It might rub some people the wrong way.”
Other issues Young has on her priority list include housing affordability, prospects for electric vehicle adoption and the potential impact of Ottawa’s promised changes to federal disability definitions and supports. .
“We need to have more discussions on some of these issues,” Ms Young said.
Mr Perrault said his economics group “got a bit of a taste” of the strong influence it could have on policy issues two years ago, when it published a report advocating universal child care and affordable. One enthusiastic reader was Deputy Prime Minister and Finance Minister Chrystia Freeland, who cited the document as having a “real impact” on the government’s economic case for moving forward with a national childcare plan.
“Rightly or wrongly, what banking economists say tends to register a lot more than what academics say. We’ll write some stuff, and it’ll end up in the [news]paper when it’s interesting,” Perrault said. “A lot more than a lot of people who have really good ideas, but who work in a more restricted setting or who don’t have access to the communication vehicle that we have.”
“I think it comes with a certain responsibility. Trying to talk about things that matter to the country and that matter to people – in a different way than when we talk to people about what they should be doing with their money.
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