Former finance minister Jim Flaherty died Thursday afternoon of an apparent heart attack, less than a month after his resignation from cabinet.
As media outlets are apt to do, many are talking about his legacy: what did he do for Canada? What will he be remembered for?
Others will have their thoughts. Here's our list of what we call Jim Flaherty's legacy moments.
The Registered Disability Savings Plan:
One of the nice stories being shared today is of Flaherty's commitment to families living with disabilities.
Likely bourne from a personal situation — one of his triplet boys is disabled — Flaherty initiated several programs to aid Canada's 3.8 million disabled people.
His flagship program, if you will, was the Registered Disability Savings Plan, a tax-assisted savings plans — introduced by the Tories in 2007 — that was designed specifically to provide long-term financial security for disabled individuals.
Here it is as explained by the Globe and Mail:
"The parent of a 15-year-old who puts $200 a month into the plan would provide her with an additional $2,500 a month by age 65. Additionally, the rules are such that her other income, such as disability benefits, are not to be clawed back and the result is that a person will not live in poverty.
"To date more than 81,000 Canadians have registered for an RDSP, and Ottawa had contributed close to $1-billion."
Flaherty also introduced other tax changes to help the less fortunate and in Budget 2014 committed $10.8 million to the Special Olympics.
On Thursday, several disability advocates offered their posthumous praise.
"Jim Flaherty epitomized the role of a devoted public servant in Canada. His career was replete with distinguished achievements and throughout it all his continued commitment to the issues faced by Canadians with disabilities was unsurpassed," Jim Rafferty of CNIB wrote in a statement.
"Jim was a friend to CNIB and a lifelong supporter and champion of people with disabilities. He will be missed by all who had the honour and pleasure of working alongside him. His contributions have helped make Canada a more inclusive, welcoming place."
Lowering the GST:
One of things Flaherty is most criticized for is the Harper government's decision to lower the GST from 7 per cent to 5 per cent in 2008.
While it did save the average household between $300 to $400 annually, economists and pundits argued that it was bad policy. The 'joke' was that the only economist in Canada who agreed with the policy was Stephen Harper.
David Macdonald, senior economist for the left-leaning Canadian Centre for Policy Alternatives recently told Yahoo Canada News that the 2-point reduction created a "structural deficit" for the country.
But as explained by University of Laval professor Stephen Gordon, it was a promise made by Flaherty and the Tories and a promise kept.
"As far as economics goes, cutting the GST was probably the worst way to reduce tax revenues, for the same reason that increasing the GST is probably the best way to increase them: it has the least deleterious effect on economic growth," Gordon, recently wrote for Maclean's.
"But the political legacy is undeniable. Cutting the GST has shifted an Overton window: the opposition parties refuse to consider restoring the GST to seven per cent, and will only entertain proposals that would recover a small fraction of the lost GST revenues."
More on Jim Flaherty:
Stewarding Canada through the global financial crisis:
While there are some in this country who minimize Flaherty's efforts during the international financial crisis, others around the world do credit him for his stewardship of our economy, during that time, and for his international leadership.
Former Bank of Canada Governor — and now Bank of England Governor — Mark Carney is one of those people.
"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," Carney said in a statement on Thursday night, according to the Telegraph newspaper.
"Jim Flaherty played a central role when the G20 came of age in Washington in 2008, and when it forged its greatest contributions in London 2009 and Toronto 2010. He was a true believer in multilateralism, leading, urging, cajoling the members around the table to pursue policies that would promote strong, sustainable and balanced growth for all."
In a recent piece by the Canadian Press, Ian Lee of the Sprott School of Business at Carleton University. argues that, while Flaherty might have been late to realize there was a recession and while he did have help from his predecessor Paul Martin, Flaherty deserves credit for buying up billions of dollars of government-backed mortgages and for initiating stimulus programs.
"His No. 1 legacy is when the U.S. was going over the cliff, and 100-year-old banks were falling, Jim Flaherty kept the ship of state called Canada on an even keel," Lee said.
"I thought that was brilliant because it didn't change the net exposure of government of Canada, but it sent a message to private markets, to the capital markets, to the currency markets, 'We're standing behind these six banks, don't mess with the capital markets, because we're going to do everything we have to do."'
Cooling the housing market:
Flaherty will also be remembered as the finance minister who loosened and and then tightened mortgage and insurance rules in response to rising household debt levels and fears of a housing bubble.
Here are some of the actions he took as described by HousingBlock.com.
- "He trimmed the mortgage amortization period four times for high-ratio mortgages from 40 years in 2006 to 25 years most recently in 2012.
- "With a household debt-to-income ratio reaching levels similar to the U.S. before the housing collapse, Flaherty capped home equity lines of credit (HELOCs) at 80 per cent of a property’s value, down from 85 per cent.
- "He also capped mortgage insurance for homes valued more than $1 million.
- "With posted 5-year fixed rate mortgages below 3 per cent and the mortgage wars heating up, Flaherty decided to intervene. Not only did he voice his displeasure in the media, he went into unchartered waters when he phoned up the executives at two major lenders and suggested they hike their mortgage rates."
While some — particularly in the banking industry — resisted the changes, most economists now believe that it was prudent policy.
"In protecting Canadians homeowners from themselves and lenders from excesses, Mr. Flaherty ultimately made it harder for millions of families to get mortgages," Robert McLister, a mortgage planner at intelliMortgage Inc., wrote for the Globe and Mail.
"But he also reinforced the very foundation of Canada’s banking system. We ended up with a safer mortgage market because of him."
(Photo courtesy of the Canadian Press)
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