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Canada’s longtime finance minister resigns

March 19, 2014

TORONTO (AP) — Canadian Finance Minister Jim Flaherty, a fixture on the world financial stage, announced his resignation Tuesday.

Flaherty, who has had the job since 2006, is the longest-serving finance minister among the Group of Seven leading industrial economies.  He said he is returning to the private sector.

The 64-year-old has battled a rare skin disease over the last year, but he said his decision to leave politics is not related.

Flaherty has been Prime Minister Stephen Harper’s only finance minister since Harper took power eight years ago. Harper’s Conservative government plans on entering an election next year with a budget surplus, and the prime minister praised Flaherty, who said his goal was always to get Canada back on track to a balanced budget after pumping stimulus money into the economy following the 2008 financial crisis.

“I am proud of the work I have done to help manage the deepest economic challenge to face Canada since the depression of the 1930s and ensure Canada emerged stronger and as a recognized economic leader on the international stage,” Flaherty said in a statement.

Canada’s commodity-rich economy avoided the worst of the crisis and has fared better than other nations. There was no mortgage meltdown or subprime crisis in Canada, and Canada’s banks are rated among the soundest in the world.

The prime minister will announce Flaherty’s replacement Wednesday. The Canadian Broadcast Corp. and CTV Television, both citing unnamed sources, reported late Tuesday that Natural Resource Minister Joe Oliver will replace Flaherty. A spokeswoman for Oliver could not confirm the reports but said that Oliver had cancelled a planned announcement in Vancouver on Wednesday and is flying back to Ottawa.

Oliver has been Canada’s point man on the proposed Keystone XL pipeline which Canada is urging the Obama administration to approve. Oliver had a career in investment banking before entering politics in 2011.

Harper may prefer the 73-year-old Oliver because is not a considered a potential candidate to one day replace the prime minister, unlike some other high profile cabinet ministers.

Harper said he had accepted Flaherty’s decision “with great reluctance.” Flaherty is the third-longest serving finance minister in the country’s history.

“Since 2006, he has been a steady hand, ably guiding Canada through the most challenging economic times since the Great Depression and gaining the country a solid global reputation for economic management,” Harper said.

World leaders have noticed Canada’s economic record in recent years. President Barack Obama once said the U.S. should take note of Canada’s banking system, and Britain’s Treasury chief said Britain looked to emulate the Ottawa way on cutting deficits.

The Conservative Party government of Harper that took over from former Prime Minister Paul Martin’s Liberals in 2006 broadly stuck to his predecessor’s approach, though Flaherty cut taxes and, when recession struck, pumped stimulus money into the economy.

“His biggest decision was to a launch a significant fiscal stimulus at the height of the recession and then to carefully unwind it so as to not to dent growth too much during the recovery,” CIBC World Markets economist Avery Shenfeld said. “He’s been quite effective when things really counted.”

Shenfeld said Flaherty is leaving the country in good fiscal shape. He said he didn’t think there would be any market reaction.

Flaherty was also an outspoken critic of European countries for their handling of the debt crisis and urged them to get their debt problems under control.

Speculation about Flaherty’s future had risen over the last year after he acknowledged suffering from the skin condition, requiring him to take medication that led to weight gain and apparent fatigue in public appearances.

Flaherty has spent almost 20 years in politics, including stints as minister of finance, attorney general and deputy premier at the provincial level in Ontario. In 2006, after two unsuccessful bids to lead the Ontario Conservatives, Flaherty entered federal politics. His wife, Christine, is also a politician. They have triplet sons.

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