Canada's energy minister to be named new finance minister -source

by Reuters
Wednesday, 19 March 2014 13:52 GMT

(Adds analysts' comments, details)

By Louise Egan

OTTAWA, March 19 (Reuters) - Canada's energy minister, Joe Oliver, will be sworn in on Wednesday as the country's new finance minister, a government official familiar with the process said, signaling a stay-the-course approach to fiscal policy.

Markets were expected to take the news in stride. The Canadian dollar weakened in early trade, but that was at least partly attributed to comments made by the central bank chief on Tuesday.

Oliver takes over after veteran Finance Minister Jim Flaherty announced his resignation from the Conservative government on Tuesday after eight years in the job. He was the third longest-serving finance minister in Canadian history.

Oliver, a Harvard graduate, has extensive experience in the investment banking industry, working at Merrill Lynch earlier in his career and as executive director of the Ontario Securities Commission. He later became chief executive officer of the Investment Dealers Association of Canada.

At 73, he is one of the oldest cabinet ministers but was first elected to office less than three years ago. Many had speculated that younger ministers overseeing crucial files would have been strong candidates for the job.

As the minister responsible for natural resources since May 2011, Oliver has been cabinet's biggest champion of TransCanada Corp's controversial proposal to build the Keystone XL pipeline to take Alberta oil sands crude to the U.S. Gulf Coast, and has clashed with environmentalists opposed to the project.

It was unclear who might replace Oliver on that file, which involves delicate diplomacy with the Obama administration.

Prime Minister Stephen Harper is expected to officially announce Oliver's appointment later on Wednesday.

Oliver inherits a federal budget that is on track to post a surplus in 2015, and he may be tasked with promoting the government's promised tax cuts in the runup to an election scheduled for October 2015. The Conservatives pledged in 2011 to offer tax cuts for families with children once they had a budget surplus, although more recently there has been some debate over what form those tax breaks should take.


Senior economists on Bay Street in Toronto, the country's financial core, said they have had little interaction with Oliver over the years but suspected he would stay on the path that Harper and Flaherty have blazed.

"The Harper government has a clear agenda as set out in the last budget, so the change in leadership is unlikely to lead to any abrupt changes in policy," said Craig Alexander, chief economist at Toronto-Dominion Bank.

"Finance Minister Oliver will, however, have a different challenge than Flaherty. Whereas the latter was focused on balancing the books, Oliver will have to table future budgets that use the surplus to promote economic growth," he said.

Doug Porter, chief economist at Bank of Montreal, said: "I will judge him by the actions he takes in the months to come."

"Combined with the markets' perception of (Bank of Canada Governor) Poloz's comments yesterday, the Canadian dollar seems slightly unsettled by the news of Flaherty stepping down, but I doubt the shift in ministers will have a significant effect on markets," Porter added.

Like Flaherty, Oliver represents an electoral district in the Toronto area, which will be critical in the 2015 election.

In addition to overseeing the country's finances, Flaherty was the minister responsible for the Greater Toronto Area, a role Oliver may be assigned as well.

Some government officials, speaking on condition of anonymity, speculated that Harper might want Oliver to be minister on an interim basis only, to carry the government through the election. (Editing by Bernadette Baum; Editing by Jeffrey Hodgson; and Peter Galloway)

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