John McCallum describes his new position in the Canadian government as: “junior finance minister”. He has held the position of secretary of state (international financial institutions) for a couple of months, having begun his political career just 15 months ago after leaving his post as chief economist at the Royal Bank of Canada.
Politics chose McCallum, rather than the other way around. He says he went into it not just because he’s crazy, but because he was approached by prime minister Jean Chrétien and his people while at RBC.
However, he says: “You’re not exactly a free agent in politics because you have to say things that are consistent with the government policy when you’re in the cabinet.” He seems to have experienced this at first hand. At RBC, he supported the proposed mergers of four big Canadian banks into two. Bank of Montreal with RBC and Canadian Imperial Bank of Commerce with Toronto-Dominion Bank. Officially, both deals were scuppered by Chrétien’s government because of competition concerns. Now it seems McCallum is singing the party tune. “The government is neither encouraging nor discouraging of bank mergers,” he says. In the government’s defence, however, Toronto-Dominion Bank has since successfully merged with Canada Trust.
Before RBC, McCallum spent 18 years at various Canadian universities. He says the move to the bank was difficult. “In academia you don’t really have a boss. You’re not exactly a free agent in a bank. Once in a while I got into a spot of trouble with the media and said things the bank didn’t necessarily agree with.”
He says: “Early in my Royal Bank career I said something I thought was harmless and not newsworthy. Something to the effect that the depth of Canada’s recession in the early ’90s might have had something to do with the very high interest rates of our central bank. The next I knew, the headline in our major national newspaper was: ‘Royal Bank rips into Bank of Canada’. That was a bit of a surprise.”
Again, when he began his political career, he received media attention he wasn’t expecting. “Going into my first cabinet meeting they asked me what I thought of the spread between bank rates at 2% and credit card interest rates at 18% and somehow the word ‘grotesque’ came into my mind and out of my mouth. The reaction from the media was quite a lot stronger than I expected,” he says.
McCallum studied in Cambridge, Paris and Montreal. Although he did the equivalent of an MA in Paris, he only learnt French during his five years at a university in Montreal, where he had to teach in French. This has come in handy, as Ottawa, the capital of Canada where parliament is based, is officially bilingual. “There are quite a lot of French people and in the Liberal caucus a good proportion are French-speaking people. Also, in the House of Commons you can get asked questions in French or in English so I use my French quite a lot,” he says.
This was not the only thing he picked up during his years in academia. McCallum proudly says: “I met my wife along the way at Simon Fraser. She’s from Malaysia and she was my student.” They have three sons aged 20, 19 and 12. His oldest son might just follow him into economics. “The oldest one is in his first year at McGill,” – where McCallum was himself previously dean of the faculty of arts – “and he has to decide by next year what his major will be. He’s debating between economics and media,” he says.
And does McCallum expect to end up as Canada’s finance minister? “I don’t know,” he says. “Six months before going into the bank I never thought I’d do that and six months before politics I never thought I’d do that.” With such a distinguished career behind him it must be on the agenda.
