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(Clay Stang)
(Clay Stang)

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

Flaherty's orders were to present a budget as quickly as possible, which he did, on Jan. 27, the earliest in Canadian history. Flaherty insists that not he, nor anyone else, fully comprehended at the time how bad the economy had deteriorated. He says his epiphany came during a private pre-budget consultation in Saskatoon in mid-December. The assembled group consisted primarily of businesspeople. Flaherty says the fear in the room was visceral. "I was convinced that we had to act in a big way and decisively," Flaherty says. "That meant running a deficit. At first the conversations were, 'Oh, we will run a deficit of $15 or $20 billion.' Then it became $25 or $30. After Saskatoon, I was thinking more. We ended up more than $50 billion in deficit."

Flaherty is one of the few ministers allowed to argue with Harper, a strict micromanager. The way he applied that leverage suggests Flaherty deserves credit for the stimulus program the same way Martin is credited with wiping out the deficit in the 1990s. Just as Martin had to persuade Jean Chrétien to diminish social programs, Flaherty had to overcome Harper's fierce fiscal conservatism to get a green light to record the biggest deficit in Canadian history.

"Yes," Flaherty says simply when I ask him if Harper had to be persuaded to go with a bigger stimulus program. "I mean, he expects me to justify what I'm recommending, so I do, and I'm not shy. You have to be able to do the job and be credible. I have to believe in what I'm doing."

When it comes to evaluating talent, politics is like baseball: There's a bias toward the home-run hitter. So it is when you mention Flaherty in the same breath as the revered Martin. McGill's Watson, no Liberal, says Flaherty has yet to match Martin's feat of not just eliminating the deficit, but convincing voters to accept the pain. And as adroit as Flaherty has become at playing G20 politics, it was Martin who created the group.

The income-trust decision was brave, but because the problem of the drain on Ottawa's coffers was still largely theoretical, all that can be measured is the money lost by investors. Among Flaherty's favourite accomplishments is his decision to allow spouses to split their incomes for tax purposes, something he says he had to bully his officials at Finance into accepting. He also set up a tax-sheltered account for people with disabilities and tax-free savings accounts, which are meant to incentivize Canadians to save by giving them a way to avoid some capital gains taxes. These are the political equivalent of singles and doubles.

Flaherty's handling of the recession could turn out to be a home run, but that remains a half-finished job. He will have to pay the bill before he gets full credit. Also, the fact the government implemented it with a gun to its head raises questions about whether the Tories really believe guiding an economy is more complicated than cutting taxes and paying off debt. "He's been right on a number of occasions, yet he has the extreme conservative background that pokes its head out," says Peters. "I'm not sure we know where he stands. I have difficulty saying he is all bad or all good."

But Flaherty has at least earned the right to be considered as someone other than the guy with the squeegee and pail in his hands. Big deficits, championing Liberal initiatives, centralizing government power, chumming with Communist China-this isn't the stuff of a right-wing revolution. In fact, because of his influence with Harper, Flaherty's old critics on the left should be happy he is where he is, says Sheridan. For evidence, the PEI Finance Minister points to another Flaherty single-base hit: the 2007 Working Income Tax Benefit. It was a small tweak to the tax code that seeks to make low-paying jobs more rewarding than welfare by providing poorer individuals with cash back-as much as $925 a year, thanks to a boost under the stimulus program.

Believe your eyes, dear Canadians, that is a Tory Finance Minister handing out money to poor people. It was also a Liberal measure that Paul Martin failed to get off the ground as PM.

"He's brought forth some social pieces that don't always fit with the Conservative ideal," Sheridan says of Flaherty. "His strength around the cabinet table has paid off for Canada. He does have that social conscience. I appreciate that he looks outside the mantra of what the Conservative government usually stands for."

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