Finance minister Jim Flaherty resigns, intends to return to private sector

After 10 federal budgets, Jim Flaherty is calling it quits.

Citing a desire to get back to the public sector, the Harper government's only finance minister made the announcement with a statement on Tuesday afternoon.

"Yesterday, I informed the Prime Minister that I am resigning from Cabinet. This was a decision I made with my family earlier this year, as I will be returning to the private sector," Flaherty, a former lawyer and ex-Ontario MPP wrote.

"I am grateful to Prime Minister Stephen Harper for providing me with the opportunity and responsibility to serve Canadians as their Minister of Finance since 2006, one of the longest serving Finance Ministers in Canadian history. As a government, we achieved great things for Canada and I could never have accomplished what I have as Finance Minister without the full support of Prime Minister Harper."

In the lengthy statement, Flaherty listed some of his accomplishments including reducing taxes, introducing the tax free savings account, helping improve the lives of people with disabilities and stewarding Canada through the great recession.

He says his resignation has nothing to do with his illness — a skin disease that has clearly slowed him down in recent years.

"I am happy to report that I am on the road to a full recovery and the decision to leave politics was not related in any way to my health. This decision was made because it is the right one for me and my family at this time," he wrote.

"I would also like to thank all Canadians who expressed their support and encouragement over my years in public service. I have often said that public service is a noble calling and have encouraged young people, including my own children, to consider it as a worthy career choice. I believe a career in the public service is the most satisfying and personally enriching career you will ever find."

Reaction to Flaherty's departure:

Prime Minister Stephen Harper released a statement shortly after the announcement noting that he accepted Flaherty’s resignation "with great reluctance."

"In a political career of almost 20 years, Minister Flaherty has exemplified the best qualities of those who enter public life: a true commitment to service, and a sincere desire to leave the country in better shape than it was when he entered politics," Harper said.

Not surprisingly, the opposition parties were not as complimentary

"He certainly had a single focus on austerity and restoring the balance," former Liberal finance minister Ralph Goodale told CBC News.

"I think he'll also be criticized for that focus because it was to the exclusion of everything else. And quite frankly you cannot hack and slash your way to prosperity. you also need to invest in the underpinnings of long-term growth like infrastructure for example."

Flaherty's legacy

While the Liberal Party and the NDP may not be fans of Flaherty's, he is widely respected as a top performer for the Harper government. Not only is he praised conservatives in Canada, but from politicos around the world for his stewardship of our economy during the global economic crisis.

In a recent article by Postmedia News, journalist Jason Fekete quoted a professor who said Flaherty is one of Canada's three most important finance ministers in the past 50 years — Paul Martin and Michael Wilson being the other two.

"He has presided over the Canadian economy during the largest crisis since the Great Depression, helped manage a spending splurge from the stimulus program, and then was forced to slash billions in expenditures in an effort to balance the books," Fekete wrote.

"Flaherty has not been shy to intervene in the Canadian economy, loosening mortgage lending rules before being forced to retreat and tighten them multiple times to avert any potential housing market meltdown in Canada."

For another perspective about Flaherty's legacy — from the left's perspective — we turned to the Canadian Centre of Policy Alternatives.

"In some ways, Min. Flaherty's career ran in the opposite direction of Mr. Martin's. Min. Flaherty started by cutting taxes, both the GST and the corporate income tax rate, creating a structural deficit that was exacerbated by the financial crash but ultimately lead to the austerity cutbacks starting in 2010, closing the loop. Martin cut programs first and then cut taxes second," David Macdonald, senior economist for the left-leaning political think tank told Yahoo Canada News.

"A similar situation happened in the housing market with mortgage insurance eligibility loosened dramatically under Min. Flaherty's watch only to be tightened again in the recognition that it had likely exacerbated record high household debt."

Who might replace Flaherty?

According to reports, Harper will name a new finance minister on Wednesday. The CBC's Chris Hall offered these names as potential successors to Flaherty: Lisa Raitt, James Moore, Jason Kenney or Tony Clement.

Another potential replacement could be Kevin Sorenson who is currently a Parliamentary Secretary in Finance and has performed well since taking the post last July.

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