* Flaherty was named Conservative finance minister in 2006
* Outspoken critic of euro zone debt crisis, deficits
* He will now return to the private sector
* Suffers from rare skin disease that limited activity
By Louise Egan
OTTAWA, March 18 Canada's straight-talking
finance minister, Jim Flaherty, is stepping down after eight
years overseeing an economy that fared better than most in the
global financial crisis but before he reached his goal of
balancing the government's books.
Flaherty, 64, announced his resignation on Tuesday after
months of speculation he would step down to attend to his
health. He suffers from a rare skin disease that has forced him
to dramatically reduce his public appearances and travel.
He denied his resignation had anything to do with his
health, and he said he plans to return to the private sector.
He had been finance minister since the Conservative Party
took power in February 2006, and is the third-longest serving
finance minister in Canadian history.
"In my time as finance minister, I am proud of the work I
have done to help manage the deepest economic challenge to face
Canada since the depression of the 1930s and ensure Canada
emerged stronger and as a recognized economic leader on the
international stage," Flaherty said in a written statement
announcing his resignation.
There was a flurry of speculation in mid-2013 that he would
be forced to step down as finance minister but Prime Minister
Stephen Harper confirmed him in the job in a July 15 cabinet
Flaherty had said publicly he wanted to stay in his job
until eliminating the government's budget deficit, and in his
budget last month he laid out a path to accomplish that goal by
next year, ahead of an election scheduled for October.
He introduced broad tax cuts early in his term, priming the
economic pump just before the start of the global credit crisis.
As the crisis deepened, he shrugged off his conservative
instincts and introduced massive government stimulus measures to
soften the blow on the economy, pushing the federal budget into
deficit for the first time in 11 years and winning praise for
helping the country bounce back from recession quickly.
On the world stage, Flaherty was a harsh critic of euro zone
countries for their handling of the debt crisis and he
persistently needled his Group of Seven counterparts to rein in
His blunt criticism earned him a reputation among his
European counterparts. European Union Economic and Monetary
Affairs Commissioner Olli Rehn joked at one point that he has a
"Flaherty Index" on the EU's prospects, based on how much grief
he was getting from Flaherty at international meetings.
A FADING STAR
But Canada's economic star power has faded recently as
economic growth has been held back by sluggish exports and lack
of business investment.
During his tenure, Flaherty also had to grapple with an
overheated housing market and record-high personal debt levels.
He tightened mortgage lending rules four times and both problems
have shown signs of easing.
He was not shy to take an unpopular stance, and in 2006 he
roiled markets and received death threats after breaking a
campaign promise with a surprise decision to tax income trusts,
an attractive type of investment vehicle.
He again defied market expectations in May when he named
Stephen Poloz as the new Bank of Canada governor rather than
giving the job to the man most thought would get it,
second-in-command Tiff Macklem. And in 2010, he hosted the G7
finance ministers in the Arctic town of Iqaluit, brushing off
naysayers who fretted about severe weather and travel problems.
Flaherty has kept a lower profile since January 2013, when
he revealed he was suffering from a rare autoimmune disease
called bullous pemphigoid, which causes itching and painful
blisters mostly on the abdomen, back, arms and legs. The
medication he takes to combat the disease can have side effects
such as weight gain and mood swings.
"I am happy to report that I am on the road to a full
recovery and the decision to leave politics was not related in
any way to my health," Flaherty said on Tuesday.
"This decision was made because it is the right one for me
and my family at this time."
Flaherty is known for his quick wit and combative style in
parliamentary debates. He says he learned to be tough as a young
hockey player and has carried that trait over into his political
Married and the father of grown-up triplet sons, Flaherty
hails from an Irish-Canadian, Catholic middle class family and
always dons a green tie for big announcements.