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(Clay Stang)
(Clay Stang)

One day, we'll look back and thank Jim Flaherty Add to ...

Flaherty is now the longest-serving finance minister in the G7 and the third-longest serving in the G20. Sometimes Flaherty seems as surprised by this as anyone. Speaking after Bank of Canada head Mark Carney and his French counterpart at a conference in Montreal in June, Flaherty joked that after more than four years of listening to central bankers debate monetary policy and economic theory, he was finally starting to understand them.

Flaherty, who wrote a textbook on insurance law, got to that point through determined research. "He's a quick study," says Dan Miles, a former director of communications for Flaherty. "He reads everything." Brian Lee Crowley, who preceded Ragan in the visiting economist post at Finance, recalls a minister who sought out the opinions of the country's brightest business leaders and academics. Flaherty would listen to his advisers, ask questions and take lots of notes. "He's intellectually vigorous," says Crowley. "He's not a lazy man."

One measure of Flaherty's growing cachet is that Euromoney magazine named him finance minister of the year in 2009. In 2010, Flaherty will be remembered for his vocal opposition to a European and American push to win G20 backing for a global bank levy. Canada's opposition appeared simple enough: a right-wing government standing against another tax scheme from those big spenders down south and in Europe. Less appreciated was how Flaherty, by rallying emerging markets such as China and India to his side, showed how Canada could use the G20 to carve out a niche for itself in global affairs independent of the U.S.

"They appreciate the fact that Canada, as a Western country, was prepared to stand up and be different," Flaherty says of the Asian powers. "We shouldn't be seen as subservient to any of the other Western countries. I think there was some intimation of that from time to time. It's gone. This disagreement about the bank tax is probably healthy, even in that sense, in that we took a different position and stuck with it."

Flaherty's stand against the global bank tax put him squarely on the same side as Canada's financial institutions, unfamiliar territory for him. While no politician wants to be seen as an ally of the bankers, Flaherty had hitherto appeared to go out of his way to rough up Bay Street's financial titans, tangling with them over issues such as ATM user fees and selling insurance on their websites. These scraps take on a look of being about more than policy disagreements because Flaherty wears his anti-elitism like a badge of honour, or carries it like a chip on his shoulder, depending on how you look at it.

"I actually care a lot about what happens to middle-class people because I didn't grow up in Rosedale," Flaherty says. "I am mindful of where I come from and who I should be worrying about out there. I really don't need to be worrying about most of the people working on Bay Street and their personal lives. They will be okay, thanks. But I need to worry systemically-and then really about middle-class Canada."

This is the theme Flaherty warms to. "I don't view myself as part of the elite and I don't want to be. I listen to people who are part of that stratum of society. But the people who actually matter are the people who are getting up every day and going to work, with both people working in the family, and they just want to get their kids through university and have a decent life and aren't looking to get hugely rich, but are decent taxpaying people."

Flaherty's posture is a bit strange given the finance minister is something of an advocate for the privileged classes in the same way the natural resources minister is an advocate for miners or the agriculture minister for farmers. It's the finance minister, after all, who gets the automatic invite to the annual World Economic Forum in Davos, Switzerland, where the global financial movers and shakers converge to make a virtue of their elite stature.

Although he acknowledges the relationship has had its moments, Flaherty insists he's not out to get the banks and never has been. "Sometimes individual bank CEOs have disagreed with me about things fairly strongly, but overall I think the relationship is good," Flaherty says. "They know, at least some of them acknowledge, that in the fall of 2008 that we were there for them-and we were there for them even though we were in the middle of an election campaign, which was very difficult to deal with."

If there was serious animosity between Flaherty and the banks, it appears to have dissipated. Nixon says the idea of a standoff always was exaggerated and that he and his counterparts at the other big banks understand Flaherty is a politician who has to juggle competing demands. In fact, Flaherty has made it a habit to assemble the bank CEOs for regular meetings, giving them more access than they had to his Liberal predecessors.

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