Former Canadian Finance Minister Jim Flaherty Dies at 64

Jim Flaherty, one of the longest-serving finance ministers in Canadian history, died today less than a month after resigning from his post. He was 64.

“My partner and my friend Jim Flaherty” has died, Prime Minister Stephen Harper told reporters in Ottawa. “This comes as an unexpected and a terrible shock.”

Flaherty “passed away peacefully,” his wife Christine Elliott and triplet sons John, Galen and Quinn said in a statement. “We appreciate that he was so well supported in his public life by Canadians from coast to coast to coast and by his international colleagues.”

While the statement didn’t give a cause of death, the Canadian Broadcasting Corp. reported Flaherty suffered a heart attack, citing people it didn’t name. Emergency crews responded to a 911 call from Flaherty’s apartment at 12:27 p.m., and paramedics pronounced Flaherty dead on the scene, said Glenn Wasson of the Ottawa Police.

Flaherty had been the only finance minister to serve in Harper’s cabinet since the Conservative government came to power in 2006. He resigned from the post March 18 and was replaced by Joe Oliver.

In his resignation statement, Flaherty said he was stepping down to return to the private sector. While he had been battling bullous pemphigoid, a rare skin disease that took a physical toll, Flaherty said his decision wasn’t related to his health issues.

The House of Commons was suspended after news broke of Flaherty’s death.

Very Sick

“He was a very determined person,” said opposition Liberal lawmaker John McCallum, a former Royal Bank of Canada chief economist. “It was clear that he was very sick, very uncomfortable and very much in pain in the last months he was here. Still, I don’t think anyone knew he was as sick as that.”

Harper’s office canceled a press conference in Ottawa scheduled for today with Peruvian President Ollanta Humala Tasso. Instead, members of the Conservative caucus filed into a meeting room in the legislature to hear the prime minister salute Flaherty as a politician who earned their “great respect and affection.” Some Conservative lawmakers wiped away tears as the prime minister spoke.

Eight Years

Flaherty’s eight-year tenure was the third-longest for a Canadian finance minister, during which he implemented one of the most far-reaching episodes of Canadian government stimulus since World War II, relying on spending and state guarantees to the banking system to expand the economy. Flaherty spent his final years in office reversing those measures, pledging in a Feb. 11 budget to return the nation’s finances to balance by 2015.

In inflation-adjusted terms, Canada’s economy outperformed the G-7 average in all but one year under Flaherty. That record of success allowed Flaherty, the dean of Group of Seven finance ministers when he left, to increase his clout within global institutions.

“My thoughts go to his wife, to the boys,” International Monetary Fund Managing Director Christine Lagarde said in an interview in Washington, where Flaherty was a fixture at G-20 and IMF meetings. “I’m just really, really sad. I had no idea it was that bad. We had a chat in Sydney, and a laugh. I would never have imagined he wouldn’t be with us. He was a friend.”

Flaherty was born Dec. 30, 1949, in the Montreal suburb of Lachine. He studied at Princeton University on a hockey scholarship, and earned a law degree from York University’s Osgoode Hall Law School in Toronto. He would stay in the greater Toronto region the rest of his life, raising his family in Whitby, Ontario just east of Canada’s largest city.

Ontario Cabinet

He was elected provincially in 1995 when Ontario voters returned the Progressive Conservatives to power under Mike Harris. Flaherty held various cabinet positions, including finance minister. He would fail twice to win the leadership of the Ontario Conservatives before running for Harper federally in 2006.

Flaherty spent his last years in office focusing on his fiscal record, pledging to end a run of deficits that may reach a cumulative C$160 billion ($146 billion) by 2015. Aside from the fiscal challenge, Canada faces some deeper economic issues, such as the run-up in household debt that has fueled a surge in home prices, which Flaherty left to his successor to solve.

“He was just instrumental in helping to build and sustain one of the world’s best economies for a long time,” said Chuck Jeannes, chief executive officer of Goldcorp Inc., the world’s second-largest gold producer. “As an American and watching for the last 10 years what’s gone on in Canada, I was just terribly impressed with Minister Flaherty and the success that he had in managing through the financial crisis.”

Brand Canada

Flaherty, in an interview in 2012 to discuss his record, cited the development of the country’s “brand” as one of his most lasting legacies.

“From his sound management of the Canadian economy to his invaluable contributions to international policy making, Jim Flaherty has exhibited the very best of Canadian virtues in service to our country,” said Mark Carney, the Bank of England Governor and former head of Canada’s central bank.

As global crisis turned to recovery, Canada has been struggling to keep its status as the G-7 economic darling, triggering a 7.1 percent slide in the Canadian dollar in the past year.

Even as the country largely escaped the financial crisis, Canada has seen the size of its economy eclipsed by Brazil and Russia since 2006, falling to 11th in the world, according to IMF data.

Better Country

Flaherty “leaves an important legacy of fiscal responsibility and public service, and I admired him greatly,” Bank of Canada Governor Stephen Poloz said in an e-mailed statement. “He devoted his life to Canada and Canadians.”

“We’ve lost a great Canadian and one who -- whether you liked his politics or not -- was dedicated to making the country better,” said Gordon Nixon, CEO of Royal Bank of Canada, the nation’s second-largest lender by assets.

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