Canadian Finance Minister Joe Oliver, appointed yesterday to replace Jim Flaherty, is seeking to convey a sense of policy continuity as the governing Conservatives say goodbye to the only finance chief they’ve ever known.
In an interview yesterday with Bloomberg News, Oliver pledged to stick to the agenda set by Flaherty, who resigned earlier this week. That includes returning Canada to surplus next year, protecting the country from global volatility and maintaining a growth-focused agenda.
“We’re talking here about continuity,” said Oliver, 73, a former investment banker who had been Canada’s main advocate for TransCanada Corp.’s proposed Keystone XL pipeline. “This is a steady-as-she-goes plan.”
Under Flaherty, who served as Prime Minister Stephen Harper’s finance minister since he came to power in 2006, Canada’s economy outperformed the G-7 average in all but one year. That helped the Conservatives build a reputation as strong stewards of the economy, and win re-election twice amid the worst global downturn since the Great Depression.
Balancing the budget is “fundamentally important,” Oliver said. “It’s important because it will put our country on a sound fiscal footing and enable us to continue to address tax issues and advance our growth objective.”
The government is on course to balance the budget next fiscal year “barring some extraordinarily unusual international event,” Oliver said. Flaherty projected in a budget introduced Feb. 11 that Canada would a post a deficit of C$2.9 billion ($2.6 billion) in the year starting April 1, before swinging to a surplus of C$6.4 billion in 2015.
The government is trying to send a message of stability to financial markets by appointing Oliver, said Yaroslav Baran, a former Harper government official who’s now a principal at lobbying and communications firm Earnscliffe Strategy Group. “This will be a sigh of relief for Bay Street,” said Baran, referring to the hub of Canada’s financial industry.
Oliver took the post on a day when the Canadian dollar weakened to the lowest level since 2009, after the Federal Reserve raised its interest-rate forecasts, fueling speculation it will tighten monetary policy faster than the Bank of Canada. The currency lost 0.9 percent yesterday, trading at C$1.1238 per U.S. dollar in Toronto. One Canadian dollar bought 88.98 U.S. cents.
With Flaherty’s resignation, Canada has now lost three of its top economic policy makers who saw the country through the financial crisis. Former Bank of Canada Governor Mark Carney left June 1 to take over the Bank of England, and was replaced by Stephen Poloz. The country’s top banking regulator, Julie Dickson, was also appointed this month by the European Central Bank to a new panel overseeing euro zone lenders.
Oliver, who switches from the natural resources portfolio, now takes on a more important role in economic management.
“I see my role as continuing to advance the government’s economic agenda, which is to create jobs and economic growth right across the country,” he said.
Oliver is a native of Montreal with a law degree from McGill University and an MBA from Harvard Business School. He worked as an investment banker for Merrill Lynch and Bank of Montreal, and served as executive director of the Ontario Securities Commission. He’s also been chief executive officer of the Canadian Investment Dealers Association of Canada, an industry group.
He spent the last three years as a vocal supporter of Keystone, which would transport crude from Canada’s oil sands to refiners along the Gulf Coast, and other energy infrastructure projects.
“I really believe the things we’re looking at now are pivotal to our economic future,” Oliver said in a March 14 interview in Toronto. “That’s a really important mission to be involved in.”
He was appointed natural resources minister in 2011 after being elected for the first time in the Toronto district of Eglinton-Lawrence. Greg Rickford, the former Science and Technology Minister, replaces Oliver in the Natural Resources portfolio.
Among Oliver’s more important tasks will be to determine how the government spends almost C$45 billion in surpluses projected over four years starting in 2015. Harper may have been uncomfortable giving control of such a political war chest to a younger man with potential leadership aspirations, Baran said.
“Given his age, he won’t have his own agenda to realize through the finance portfolio,” Baran said.
Flaherty’s departure this week came amid a disagreement with Harper over the merits of an income splitting pledge the Conservatives made in the 2011 election. Flaherty said last month he had doubts about the wisdom of the policy, which would allow married couples with children to divide income to reduce their tax burden.
Oliver yesterday said it’s “premature” to discuss what the government will do once it returns to surplus. “It is something that will be discussed I think increasingly in the months and years ahead.”
Politically, Oliver can expect a rough ride in parliament until the next election, slated for October 2015. While Tom Mulcair, leader of the main opposition New Democratic Party, issued a statement wishing Flaherty well, he told reporters in London, Ontario yesterday that Oliver’s appointment is “a mistake.”
Referring to comments Oliver made about climate change in his previous portfolio, Mulcair called Oliver “an embarrassment to Canada.”