David McLaughlin has been chief of staff to prime minister Brian Mulroney, New Brunswick premier Bernard Lord and finance minister Jim Flaherty.
There is an old saying in politics that either the man makes the office or the office makes the man. In Jim Flaherty’s case as Canada’s Minister of Finance, you need to say both.
He brought his formidable intellect, exceptional political skills, and life experiences to the second-toughest job in Canada. This was the man making the office. But as he grappled with one enormous challenge after another as minister, you could visibly see the office making the man. He grew into the job in just a year and it was already hard to see how it was not a natural fit.
Three episodes stand out: shutting down income trusts and reversing a key Conservative campaign promise on Halloween night in 2006; setting out the government’s first economic strategy called Advantage Canada; and negotiating a massive transit infrastructure agreement for the GTA with the Ontario Liberal government.
On income trusts, Mr. Flaherty demonstrated a minister open to argument, facts, and reason. He listened to departmental advice, talked to business CEOs, and helped convince the Prime Minister that this startling reversal of position was necessary and urgent. He was right. But he knew just as well that the political fallout could be fatal for the new government, particularly with seniors. He personally directed the department to include pension income splitting (never one of their recommendations) as part of the ‘sugar’ to help the distasteful political medicine go down. It worked.
At a time when ‘Canada’s New Government’, as it then styled itself, was focused on its famous five priorities, Mr. Flaherty convinced it to look ahead and think longer term. Advantage Canada was released in the fall of 2006 and presaged the more ubiquitous Economic Action Plan of recent years. It set out the underlying economic plumbing and direction familiar today: lower taxes, infrastructure investment, innovation, and spending restraint.
Again, though, he brought a clear political eye to the issue. The first draft of the plan prepared by Finance Canada was titled ‘Building on Success’. How they figured a new Conservative minister would willingly sign onto that can only be explained by surmising it was ‘their’ success as a department to which they were referring. But to everyone in our office, this was going nowhere. Mr. Flaherty, however, gave it his due first. A 10-page memo (literally) I had prepared for him deconstructing the draft from the title down he agreed with, he later told me, but only after reading the draft document in its entirety first. He wanted advice from all corners – political and bureaucratic. But as minister of finance, he would never wilfully ignore departmental memos or advice. This was the office making the man, thoughtful and principled in how he conceived his role as minister.
Finally, he epitomized the adage that ‘all politics is local’. Following his first federal/provincial/territorial finance ministers meeting, he met with his Ontario counterpart to discuss transit issues for Toronto. The latter wanted a subway extension; Mr. Flaherty, from Whitby, was inclined to highways and light rapid transit. I was tasked with negotiating a deal with my opposite number that included both. We did. For all the billions being invested, though, he made a point of insisting the provincial government did not forget to put signage up in his riding and region touting the investment. Personal roots and political roots were never far from his person.
While Mr. Flaherty’s most durable legacy is likely to be his stewardship of the Canadian economy during the financial crisis of 2008-09, his approach and character were actually on display for all to see within that highly-charged first year of the Harper government. A professional minister who understood his role; a strategic thinker who looked ahead; a consummate politician well-rooted in his home and community.
Jim Flaherty made the office and the office made him.
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