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Remi Theriault

It's going on five decades since Joe Oliver left Montreal— for Boston, New York and ultimately Toronto—but he still crosses the street like a Montrealer. That is, wherever he wants, in defiance of traffic lights. His jaywalking rattles the Ontario-bred aides who tail him. Tough luck for them.

Oliver is no less Type A behind the wheel. And don't get him started on Toronto drivers. They cut you off, he gripes. He blames this form of one-upmanship on the "politics of envy." Torontonians just can't stand to see anyone else get ahead of them. If a Montrealer cuts you off, it's only because he's genuinely in a hurry.

That's Joe Oliver's theory, anyway, and he's sticking to it.

Canada's 38th finance minister knows all about being in a hurry. A latecomer to politics, Oliver didn't forgo a cushy retirement accumulating corporate board seats to twiddle his thumbs as a backbencher. He came to make a mark. At 74, he knows the chance won't come around again.

Prime Minister Stephen Harper has handed Oliver perhaps his government's most critical assignment. The budget he will table in early 2015 will frame the message Conservatives take to voters in the election later in the year. The Tories want to be seen as able fiscal managers. Oliver is the messenger. With surpluses anew, the Harper government has room to slash taxes, increase spending and reduce the federal debt—all at once.

A chunk of future surpluses is already spoken for to fulfill a long-standing promise to allow income-splitting for couples with young children and to boost the $100 monthly child care benefit to $160. But there are still big choices to make that could shape Canada for decades to come. Oliver is Harper's choice to execute the Tory game plan, interrupted by the recession, to permanently shrink the size of the federal government. Weaker oil prices, a housing crash and a shaky global economy could all rain on this parade. But Oliver seems to relish the challenge.

Oliver's predecessor, Jim Flaherty, flawlessly choreographed the return to surplus after indulging—to the horror of true conservatives—in a massive bout of stimulus spending during the recession. His March retirement, and sudden death a few weeks later, left Harper with a massive hole to fill.

Oliver doesn't enjoy the affection that Flaherty built up over eight years as a folksy finance minister with his ear tuned more to Main Street than Bay Street. Oliver, an investment banker, has credibility galore on Bay Street. But his take-no-flak style and sarcastic wit do not generally go over well in sound bites.

By the time he became finance minister in March, Oliver had earned his reputation as a right-wing political scrapper. The attack-dog label does not do him justice, however. Yes, he may call you an idiot. But he means it in the nicest way, really. He's very likeable—cantankerous-uncle likeable.

Professionally, Oliver is best defined as a wonk who revels in complex problem-solving. His outward opinions belie an inner commitment to evaluating all options, even those that don't fit with his free-market doctrine. It's why he twice left jobs in investment banking to work in less remunerative public policy-oriented jobs. Friends and adversaries alike grant that he is a deep thinker.

"He's just smart as hell," says Foreign Affairs Minister John Baird. "I don't think Canada has had a finance minister with such a strong working knowledge of markets and finance in a long, long time. We've had many great performers. But none with so much specific knowledge of the task at hand."

Liberal MP Irwin Cotler calls Oliver "the best defender of an indefensible case I know." The two have been best buds since their McGill University days in the 1960s. And though they disagree about almost everything, Cotler thinks Harper made a wise choice. "I thought Joe was the best person for the [Finance] job because he knew the file, would read his briefings, engage his civil servants and understand the policy options."

Oliver is universally liked and re-spected by his cabinet peers. That makes him unusual, since past finance ministers have often been seen as rivals by others in cabinet with their sights set on the leadership. Oliver has no such ambition, though that could also free him to defy the boss. "My sense is that Joe would stand up to the PM if he had to," Cotler says. "But I also believe he is more in synch with the PM [than Flaherty] and, therefore, would have less reason to stand up to him."

Oliver's upcoming budget is easily the most important the Harper government has delivered since the recession. "The point is, this doesn't have to be an austerity budget," Oliver says. "This can be a budget where we're able to do a number of different things for Canadians."

If he gets it right, Oliver may even get to keep his job beyond the next election. "I think I'm the edge of the sword," he says of the coming campaign. "The critical message we're going to be conveying to Canadians is that we are good economic stewards and the country is strong, doing better, despite the external risks."

Oliver's sarcasm picks up where the carefully prepared talking points end. "Besides, we're not running against God," he scoffs. "There may be some irritations or things [we do] that people get upset about. But if they're responsible, they'll ask themselves: 'Who do I trust to manage our $2-trillion economy?'"

Oliver is sitting in a booth at United Bakers, a Jewish diner and temple to Formica in his Toronto riding of Eglinton-Lawrence. This is where he comes to press the flesh and tune into the zeitgeist. Oliver is something of a rock star here; his status as Canada's first Jewish finance minister is a big source of pride in the community. Politics aside, Oliver comes here for the menu. "Basically, they've got a formula for the type of food people want," he says of owners Philip and Ruthie Ladovsky. "There are a lot of restaurants that sometimes do well, then they get bored with their own menu. Their customers aren't bored. But [the owners] get bored and change it. Then they're out of business."

It's a lesson Oliver thinks applies to politics, too. And the voters of Eglinton-Lawrence, who had elected Liberals since the riding's inception, seem to like Oliver's menu. Unlikely as it seems, he is an able retail politician. Lest anyone suggest he's getting too old for the job, he retorts that he knocked on 38,000 doors to take this stronghold in 2011. And he's pumped to do it all over again in 2015.

That's an ambitious feat for someone who had quadruple-bypass surgery in 2013. But the mountainous cheese Danish he inhales in front of me suggests Oliver is not overly preoccupied about his health. He's rail-thin, but exhibits the energy of a horse, criss-crossing the globe for back-to-back G20, IMF and APEC meetings. He's also happy to oblige Tory backbenchers seeking a star for their fundraisers. It all makes for a superhuman schedule. But underlings say he's got more stamina than much younger cabinet colleagues and is sharper, to boot. Working for Oliver is Yes Minister in reverse.

"It couldn't be better," Oliver says of life near the pinnacle of power. As a sign of his confidence in Oliver, Harper made him vice-chairman of his inner cabinet, the pivotal Committee on Priorities and Planning, which sets the government's agenda. (Harper chairs the P&P.) "I do believe people make a difference. Individuals make a difference," Oliver offers. "I'm in a position to help advance our economic agenda. Our objective is to create jobs and make the country grow and be more prosperous. If I can add to that accomplishment, I will have done something quite meaningful for Canadians."


It's some distance, metaphorically speaking, from Montreal's Notre-Dame-de-Grâce neighbourhood to the corridors of Conservative power in Ottawa. If you grew up Jewish and anglophone in 1940s NDG, you were a Liberal or, in a few cases, a communist. The Olivers were Liberals. A great-uncle flirted with communism and returned to the family's native Russia. "He was the intellectual, you see," Oliver sniffs. "Fortunately for him, he changed his mind and returned [to Canada]—before the Second World War, which might have been terminal. My family was anti-communist. We understood the horrors."

Oliver remembers his parents admiring John Diefenbaker, the first ethnic Canadian to become prime minister. But as the head of the McGill Daily's editorial board in 1962-'63, Oliver took "pretty Liberal" positions, according to Cotler, who was a fellow law student and the paper's editor-in-chief. Garth Stevenson, who was executive editor that year, agrees. "The paper's editorial policy in the Cotler/Oliver era generally supported the Quiet Revolution led by Quebec premier Jean Lesage, the federal Liberals led by Lester Pearson, and the John F. Kennedy administration in the U.S. We all had a low opinion of the Diefenbaker government."

Oliver ditched student journalism the following year to head up the McGill Law Journal, a prestigious post that typically went to one of the most promising legal minds in the class. But if he didn't lack the brains to rise in Quebec legal circles, Oliver's weak French was an obstacle. When he was growing up, the Protestant schools he attended didn't hire Catholics, which meant they employed few native French speakers. "Therefore, my French teachers were anglophones. Talk about idiocy."

After McGill, however, he got a grant to study in Paris. He spent a year at the University of Paris, improving his French. He tooled around Europe in a Fiat 500, bought for $700. Paris that year was "kind of a wild scene. There were riots between the communists and the fascists every Friday afternoon."

Back home, Oliver began practising commercial law. But it wasn't long before ambition reared its head. "I decided to go to business school. I thought there wasn't a single Quebec lawyer who had an MBA and that it would give me an advantage." Oliver was accepted into Harvard and Columbia. He chose Boston.

"It was a fantastic experience. People were interesting and bright and it was a totally different pedagogical approach than what I was used to," Oliver says of Harvard's then-pioneering case-study method. "By the end of the second year, I just got caught up in the excitement of investment banking."

Oliver's plan was to return to Montreal, to work for a St. James Street brokerage. But those plans changed when recruiters from Merrill Lynch showed up on campus scouting for Royal Securities, a blueblood Canadian brokerage firm the Wall Street investment bank had just acquired. Oliver was miffed when he was passed over for an interview. He wrote Merrill to insist he get one. He did, and a job, too. "I haven't been handed things on a silver platter. I usually have to work

for it," he insists. "That was an instructive example, and it really launched me on a career."

Taking the job meant abandoning Montreal, however. The Merrill job required Oliver to spend a year in New York to learn the trade, and then move to Toronto. (By then, he says, "it was obvious Canada's financial centre had shifted and it wasn't going back.") In New York, Oliver met another young Canadian recruited by Merrill—Jean Monty. He and Oliver shared desk space in Merrill's "bullpen" with other junior employees. Oliver was the intellectual. "He wouldn't come in on Monday morning talking about the hockey game," recalls Monty, who would later join Bell Canada and become CEO of parent BCE Inc. "The most interesting discussions we had in the bullpen were about politics and policy, and Joe was in the middle of every one of them."

Oliver's first deal in Toronto involved raising $2 million ("It was amazing how small it was," he says, laughing) in a secondary offering for Peoples Jewellers. It brought Oliver into contact with Irving Gerstein, the Peoples scion who would later turn the family business into the world's biggest jewellery chain with an ill-fated takeover of Zale Corp.

Through the years, Oliver kept in touch with Gerstein. The latter was a political outlier, a prominent Jewish-Canadian businessman who supported the federal Tories. Now a Tory senator and bagman, Gerstein tried to recruit Oliver to run in the 1979 federal election. By then, Oliver had abandoned the Liberals, having become a critic of Pierre Trudeau's economic policies. Trudeau's invoking of the War Measures Act had also left a bitter taste. Still, Oliver was not ready to interrupt the momentum of his career.


In 1982, Oliver moved to a senior job at Nesbitt Thomson (now part of the Bank of Montreal). He stayed until 1991, when he became head of the Ontario Securities Commission. Oliver took a substantial pay cut but found himself in the thick of what he loved most: public policy. Oliver's job was primarily administrative—making sure the trains ran on time, overseeing hiring and budgeting. (He did not have direct oversight of the OSC's oft-maligned enforcement arm.) Oliver was lured back to investment banking in 1993, joining First Marathon Securities. But he did not stay long.

In 1995, Oliver became president of the Investment Dealers Association of Canada. The IDA had a dual role: It was both the self-regulating body for the securities industry and its main lobby group. The twin functions were a constant source of tension and, according to critics, conflicts of interest.

The critics piled on when a confidential OSC audit of the IDA's operations was leaked to the media in 2001. The audit raised "serious concerns about the enforcement division," citing its heavy backlog of investigations and a lack of appropriately trained staff to prosecute misdeeds. "There is a perception that senior management in member regulation is too close to members and that this introduces a bias in the enforcement process," an independent review by consultant Robert Chambers added.

That the criticism never stuck to Oliver earned him a reputation on Bay Street as "Teflon Joe." He lasted 12 years in the IDA job, enjoying the confidence of the bank-owned brokerages that controlled the IDA's board. "Joe had a balancing act to perform, but he was very good at it," says David Brown, a lawyer at Davies Ward Phillips & Vineberg who chaired the OSC when Oliver ran the IDA.

Oliver oversaw the process that would eventually see the IDA split into two bodies, separating the enforcement and lobbying functions. Until then, however, he had plenty of other fires to put out. The 9/11 attacks paralyzed markets for days, forcing regulators to ensure that the security emergency didn't also turn into a financial meltdown. Brown says Oliver provided "a steady hand on the tiller" as the two worked in tandem to control the fallout in Canadian markets.

Brown and Oliver also worked closely in the aftermath of the 2002 Enron scandal. The U.S. Congress responded to Enron's accounting and governance failures with legislation that imposed knotty new requirements on corporate boards, brokerage firms and accountants. Brown and Oliver needed to align domestic rules with the new U.S. ones without overburdening Canadian firms. There was plenty of resistance in corporate Canada. But Brown credits Oliver with "adept consensus-building" during that process, a talent he also displayed in attempts to lay the groundwork for a national securities commission.

The idea of a single regulatory body to police Canada's securities markets had been around for decades when Oliver arrived at the IDA. A single body would be "the most logical, efficient and sensible approach," he said in 1995. But most provinces were unwilling to surrender their authority. The brokerage industry was divided; regional firms balked at a

perceived Toronto power grab. Oliver tried to reconcile these disparate views, wooing the holdouts with a compromise. Rather than a federal commission, he suggested "a pan-Canadian" one run jointly by the provinces. The idea proved prescient. For years after that, federal attempts to unilaterally create a national commission went nowhere. Flaherty tried, only to be rebuffed by the Supreme Court in 2011.

Ottawa changed course in 2013, joining Ontario and British Columbia to launch the Co-operative Capital Markets Regulatory System. The proposed body would supplant provincial securities commissions, but have joint oversight by the provinces and Ottawa. It looks a lot like what Oliver pitched almost two decades ago.


Just as the IDA was preparing to break into two in 2007, sending Oliver into retirement, he got a call from Tom Hockin. The Mulroney-era cabinet minister, who was then the top lobbyist for the country's mutual fund industry, was recruiting Tory candidates. This time, Oliver plunged. Hockin didn't offer a riding.

So the wonk went to work. After poring over the data, Oliver ruled out running in St. Paul's, the mid-Toronto riding that encompasses his tony Wychwood Park neighbourhood. If a star Tory candidate such as ex-anchorman Peter Kent had been unable to take the riding in 2006, Oliver figured there was no way he could. So, he looked next door to Eglinton-Lawrence. The Liberals had held the riding since its 1976 creation, and long-time MP Joe Volpe beat his Tory rival by 23 percentage points in 2006. But Oliver liked his odds. Jewish voters accounted for about a fifth of the riding's population. And like their counterparts across the country, the Harper government's outspoken support for Israel was increasingly turning them into Tories.

Oliver still lost the 2008 election—but he slashed Volpe's margin of victory to five points. He tried again in 2011 and beat Volpe by almost 10 points, giving the Tories a coveted 416 beachhead.

Oliver was immediately rewarded by Harper with the Natural Resources portfolio, and given another critical political responsibility as minister for the Greater Toronto Area. It was not long before the entire Canadian public would get a taste of his style. In one notorious outburst, he blasted environmentalists seeking to intervene in hearings on the Northern Gateway pipeline as "radical groups" out "to hijack our regulatory system to achieve their radical ideological agenda."

That was after he called NDP MPs Megan Leslie and Claude Gravelle "clowns" for lobbying against the Keystone XL pipeline in Washington. Leslie responded in kind by calling Oliver a "grumpy old man."

As Finance Minister, Oliver has a mandate to worry about the health of the whole economy, which, outside the resource and housing sectors, has hardly been on a roll. In 2012, NDP leader Tom Mulcair blamed this uneven growth on so-called Dutch disease: Foreign demand for our oil put a jet pack under the Canadian dollar and undermined the export competitiveness of manufacturers.

Oliver is no more sympathetic to Mulcair's argument now than he was then. Asked if the economy has become too dependent on oil, Mr. Sarcastic is quick to pounce. "Ask the Norwegians about being too dependent.…You don't make a country wealthy by killing a productive industry. We're in Canada. We tend to make everything a negative sometimes. To make our resources a negative, only a Canadian would do that. When I travel around the world, nobody thinks our resources are a negative for Canada."

But Norway has avoided Dutch disease by plowing virtually all of its oil revenues into a sovereign wealth fund, now worth about $890 billion (U.S.), that is invested abroad. That's kept a lid on the kroner and helped ensure other sectors of the Norwegian economy do not suffer from an overvalued currency.

The Norwegian model has never been an option for Ottawa—resource royalties are collected by the provinces and they decide what to do with them. Ottawa has raked in a bonanza of tax revenues from Alberta, but it has also had to deal with the fallout of asymmetrical growth. Nowhere more so than in Southwestern Ontario. Long the country's economic motor, the region is a shell of its former self. Some relief is in store if the loonie maintains its recent downward trajectory, but not enough to return manufacturing jobs wiped out over the past decade. Most, if not all, of them are never coming back. Ford's recent decision to choose Mexico over Ontario for a new engine plant is proof of that.

"We obviously can't achieve our potential as a country if our biggest province is lagging," Oliver concedes. But he adds that Ottawa has been doing its part to boost Ontario's competitiveness—slashing corporate taxes and providing record support for research and development.

He is also quick to point out that the oil sands are a good-news story for Ontario, too. Hundreds of Ontario companies sell supplies to Alberta oil producers. "Ontario is benefiting from the oil sands, directly and indirectly. They're benefiting from equalization payments."

One thing Oliver won't be doing is sending a big fat cheque to Kathleen Wynne. Flaherty dramatically hiked federal cash transfers to Ontario—by 76%, compared to an overall increase in federal program spending (including transfers) of only 40%. He also rejigged the equalization formula, making Ontario eligible for the first time.

Still, Ontario's Liberal Premier has been clamouring for more, backed up by economists who argue that Ottawa should use its fiscal flexibility to help. Oliver has no patience for such thinking. He suggests Ontario suck it up. "At the end of the day, our expenditures can't grow faster than the economy or we're going to go increasingly into debt. You can do that for a while. Then it catches up with you. It's catching up with Ontario. They have to deal with it."

His scolding of the Ontario government's fiscal management—the province forecasts a $12.5-billion deficit this year; its debt has ballooned to 40% of GDP—has a Thatcherite ring to it. But Oliver insists he's no ideologue."Oh, I'm a pragmatist. I do not believe in taking an ideological approach to finance."

I have no doubt that, in his mind, Oliver is indeed a pragmatist, and no ideologue. But it can be hard to come to that conclusion yourself when you parse what he says.

"It's not either-or. It's where on the continuum you put the pin," Oliver says of his philosophy. "I put the pin into less government than the NDP, or the Liberals for that matter. When the government has become increasingly involved in the economy and people's lives, it's worthwhile considering whether you want to stop it from increasing."

But it's not increasing. As Oliver himself never ceases to remind us, federal taxes now account for their lowest share of the economy since Dief was prime minister. Do we really need to cut them further, when the country has a gaping infrastructure deficit and ever-growing demands for health care? "I think one can make the case, and it's not an ideological one, that people would benefit from lower taxes," says Oliver. "They'd have more money to spend and save. Who's smarter at determining what someone should spend and save? Is it they themselves, or some social engineer in Ottawa?"

That's a bit rich considering Oliver's government has littered the tax code with dozens of targeted tax credits aimed directly at influencing behaviour—so-cial engineering by any measure. Most of these so-called boutique credits were introduced under Flaherty. But Oliver has continued the tradition—doubling the Children's Fitness Tax Credit to $1,000, at an estimated cost of about $130 million annually. These measures are the bane of economists who argue they are good politics, but bad policy.

"It's clear why, politically, the more targeted tax relief is attractive. You can go to the recipients and say: 'Look at what you're getting,' " says C.D. Howe Institute president Bill Robson. "But from an economic point of view, the more you use broad-based tax cuts that apply equally to everyone across the board, the more you are removing taxes as determinant to what people are doing."

Robson, who attended a by-invitation-only brainstorming hosted by Oliver in August, has not lost hope. The Children's Fitness Tax Credit was already a 2011 Tory election promise that Oliver had little choice but to honour. Going forward, he may have a freer hand to cleanse the system, Robson says. "Getting these tweaks and boutique credits out of the tax [code] is easier if you can offer more general tax relief to help the medicine go down. Getting back to surplus means Joe Oliver has an opportunity to clean things up."

Or does he? Oliver's freedom is a matter of speculation. Flaherty was one of only a few ministers indispensable and popular enough to defy the boss and survive. Oliver anticipates what he calls the "marionette question" and intercepts it. "I'm not a tortured soul who has to swallow my core beliefs to talk about a low-tax plan for jobs and growth," Oliver quips. "Having said that, one can have differences with respect to specific policies. If I feel strongly, I'll make my views known. The budget is not baked yet. We'll see how it goes."

Whatever happens, I'd bet on Oliver getting his way. This unreconstructed jaywalker is stubborn. When we leave the restaurant, he heads to his constituency office on the other side of Lawrence Avenue. An aide pleads with him to cross at the light. But Oliver, as usual, prefers to do it his way.