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Jim Flaherty may be set to become the first federal finance minister in nearly 40 years to oversee a return to budget deficits, but economists say they're generally satisfied with his occasionally controversial stewardship.

Just last week, he raised eyebrows when he suggested the Harper government is considering selling off federal assets in the name of deficit fighting – even joking that the landmark CN Tower in Toronto could be on the block.

The idea was panned by private-sector economists, who warned that selling the family silver in a down market would fetch deflated “fire sale” prices.

It was arguably Mr. Flaherty's first public misstep since March, when he went too far in partisan attacks on Ontario's Liberal government and suggested Canada's most populous province was the “last place to invest” for business. His argument was that the province should cut business taxes, but the statement left the impression he was badmouthing Ontario.

“I think it was beyond the pale,” Douglas Porter, BMO Nesbitt Burns deputy chief economist, said of the Finance Minister's partisan rhetoric.

These incidents aside, analysts say, Mr. Flaherty is doing a fair job steering the Finance Department as Ottawa teeters on the edge of a deficit and tries to weather a credit crisis.

Mr. Porter said he is reluctant to give Mr. Flaherty a “thumbs up or thumbs down,” but said he considers the Finance Minister up to the task.

“I think he is. Is he going to be voted the best finance minister of the century? I don't think so,” Mr. Porter said.

IHS Global Insight Canada managing director Dale Orr said Mr. Flaherty and the Conservatives should have taken better precautions against a deficit, noting they cut some rainy-day cushions and drove program spending up 13.8 per cent in their first two years.

It's also hard to find an economist who supports the Conservatives' decision to forgo $11-billion of annual revenue and cut the goods and services tax by two points, instead of using that fiscal room for productivity-enhancing, broad-based income-tax cuts.

That notwithstanding, Mr. Orr said, he believes Mr. Flaherty “is certainly the best person in the Conservative cabin-

et to be the finance minister.”

If Ottawa runs a deficit in the 2009-2010 fiscal year, as bank economists have predicted, it will be the first in 13 years. It will also be the first time Ottawa has slid into the red from a surplus since 1970-1971.

That's despite the fact that Mr. Flaherty – a soldier in Mike Harris's Common Sense Revolution – declared several times this year that he wouldn't be the finance minister who oversees the return of deficits.

That stand had some analysts worrying that the fiscally conservative minister was too doctrinaire. Deep spending cuts made solely to avoid a deficit risked exacerbating the weakest economy since the early 1990s.

Mr. Flaherty answered those critics in a speech shortly after the election, saying he wouldn't put ideology ahead of sound economics and “engineer a surplus at any price.”

So far, from a personal perspective, 2008 has been a far better year than 2007. The latter was a difficult period for Mr. Flaherty that saw him fumble the relationship with Bay Street over a bid to end the tax deductibility of interest from foreign expansions, and underperform in selling a controversial equalization deal to Nova Scotia and Newfoundland. That August he was removed from steering roles on two key agenda-setting cabinet committees.

But C.D. Howe Institute president William Robson says Mr. Flaherty's reappointment signals that Prime Minister Stephen Harper is satisfied with his Finance Minister's performance.

“The Prime Minister is not someone who hesitates to make a change for personal reasons if he sees one is needed,” Mr. Robson said.