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When Bill Morneau was named as Canada’s finance minister in 2015, former prime minister Jean Chrétien called to offer congratulations – and a warning.

“The more independent you are, the more effective you will be,” the former prime minister told him. “But the more independent you are, the more you will be at risk.”

Mr. Chrétien was referring to the inevitable tension that exists between a prime minister and a minister of finance. The latter needs to establish clear boundaries with the political staff in the Prime Minister’s Office and act as a check on their electorally driven agendas. Yet, no finance minister can become so detached from the top boss so as to be seen as a rival, or worse, a problem.

Mr. Morneau never mastered this equilibrium during his frustrating five-year turn as Prime Minister Justin Trudeau’s top economic minister. By his own telling, his personal interaction with Mr. Trudeau was virtually non-existent. The two men rarely met. When they did, the PM was usually surrounded by advisers, precluding the opportunity for frank, one-on-one exchanges.

The portrait of his time in government that Mr. Morneau paints in his new book, Where To From Here, serves as a cautionary tale for future leaders on how not to alienate the best members of their teams and a disillusioning insider account about how the Trudeau government works. A Bay Street veteran with solid business credentials, Mr. Morneau’s talents were largely wasted in a government that obsesses about winning the news cycle and cares little about fiscal matters.

This is not the typical story of a prime minister periodically overruling his finance minister, a common theme in Canadian history. As Mr. Morneau notes, the finance minister is often perceived as an “electable Scrooge” who beats back spending demands from other cabinet members. The prime minister acts as arbiter, weighing the political and fiscal considerations of any policy choice. This did not occur with Mr. Trudeau, given what Mr. Morneau identifies as one of the Prime Minister’s “most striking” weaknesses – a lack of focus on policy details.

“Leaving the development of policy responses to his PMO staff meant that debates were conducted, and conclusions reached without his presence,” Mr. Morneau writes. “The real clashes happened over things that we had never discussed.”

Mr. Morneau realized shortly after taking office that the 2015 Liberal vow to run “modest” deficits of about $10-billion was incompatible with the party’s election promises. Attempts to get the PMO to agree to hard debt and deficit budget targets were systematically denied. “Without a realistic revised deficit target, we were in effect flying by the seat of our pants,” he recounts.

Mr. Morneau considered stepping down before the 2019 election. He decided to run, writing that he “liked the job otherwise” and had been suitably proud of some of his first-term policy achievements, such as the Canada Child Benefit and carbon pricing. But his worst fears were realized when the pandemic hit and his department’s careful analyses, aimed at ensuring financial supports for individuals and businesses were distributed in the most equitable and cost-effective way, were “disregarded in favour of winning a popularity contest.”

“My job providing counsel and direction where fiscal matters were concerned had deteriorated into serving as something between a figurehead and a rubber stamp,” he writes. “There was only revision of my recommendations, ever upward, toward funding levels the PMO believed would play well the next time Canada went to the polls.”

Canada’s net federal debt stood at about $700-billion when the Liberals took power. It is set to hit $1.3-trillion this year. Mr. Morneau’s successor, Chrystia Freeland, has touted the government’s commitment to reducing the net debt-to-gross-domestic ratio over the “medium term” from 45.5 per cent in 2021-2022 to 37.3 per cent in 2027-28. But this is a government whose past fiscal projections have been even less bankable than Via Rail’s on-time performance.

And Mr. Morneau warns about the challenges ahead. The energy transition “will inevitably impact domestic petroleum and natural gas production, lowering the income we earn from export markets.” Clean energy may replace some of this income, “but it’s not something to bank on while setting budget targets.” Then there is Canada’s growing share of “aged residents” and its “shrinking sector of younger employed workers.” Not to mention the “fiscal strife” of several provinces that will need Ottawa’s help to stay afloat in the face of “demographic challenges.”

Raising taxes to fix these problems will not work. Given the constant lure of the United States, Canadian tax rates are already “near or at the [upper] limit.” Mr. Morneau offers a series of policy recommendations aimed at boosting Canada’s productivity that are probably not sexy enough to pass muster with the Trudeau PMO. Some of them might even be – gasp – politically hard and unpopular. But making hard choices is what leadership is all about.