NEWSMAKERS: CANADA
| Oliver is well equipped for the job, but lacks diplomacy. |
When, on March 18, longtime Canadian Finance minister Jim Flaherty unexpectedly announced his resignation, few were perhaps more surprised than his soon-to-be successor, Joe Oliver, the 73-year-old minister of Natural Resources. Flaherty, who had held the job since 2006, was a fixture in prime minister Stephen Harper’s cabinet and the longest-serving Finance minister in the G7. Oliver, on the other hand, was elected to the House of Commons just in 2011 and is still considered by many to be a relative newcomer to politics.
Just a few weeks later, Canadians were shocked to learn the real reason behind Flaherty’s decision. A rare skin condition he had suffered for years had worsened, and on April 10 complications led to his death. Thanks in some part to Flaherty, Canada fared better than many other nations—including its nearest neighbor—during the financial crisis of 2008–2009.
The outpouring of public emotion over Flaherty’s death is likely to make his act even tougher to follow than it would have been. The new minister, however, comes armed with an impressive résumé. With a law degree from McGill and a Harvard MBA, Oliver worked for decades as an investment banker for Merrill Lynch and was later appointed executive director of the Ontario Securities Commission.
While Bay Street analysts see him as one of their own, such credentials did not protect him from criticism during his tenure as Natural Resources minister, when he was accused of lacking the diplomatic skills necessary to advance critical infrastructure projects.
All the more reason to stick to the plan established by his predecessor, says Bank of Montreal professor of international finance Maurice Levi: “All he needs to do is hold on to the pre-set steering wheel. The drop in the Canadian dollar is helping central Canada and is already showing benefits in the first merchandise trade surplus in years.”
However, John Smithin, professor of economics at the Schulich School of Business in Toronto, is critical of the Harper government’s emphasis on running a budget surplus in the next cycle: “Will it be achieved? And if it is, will it actually be a good thing? The government actually used deficit spending to get through the recent recession, and received some credit for it. How can they be sure that austerity will not have the opposite effect?” The key question is whether Oliver will be allowed to steer the wheel in a different direction to prevent that from happening.
