No more Mr. Nice Guy
By Louise Egan
Canadian Finance Minister Jim Flaherty catapulted to “rock star” status at international meetings in Washington on the weekend, where he took his anti-tax crusade and stared down the powers in Washington and Europe who had plans for a global bank levy.
The Canadians are traditionally peacemakers at these events, building bridges between opposing camps and forging consensus. So when Flaherty stormed into Washington railing against a bank tax being proposed by some of the world’s most powerful leaders in the G20, the reactions ranged from bemused to outright flabbergasted.
“What has happened to the mild-mannered Canadians?” said one bewildered journalist covering the talks among the G20 developing and developed nations.
Canada, a welterweight on the world stage, has its reasons for taking on the titans — Britain, Germany and France and the United States — which favor a levy on financial institutions to pay for the cost of bailouts and let taxpayers off the hook. Not only has Canada’s minority Conservative government spent the past four years promising to cut taxes, not hike them, but the government never had to rescue its banks.
Back home Flaherty, now the longest serving finance minister in the G7, had already been showing his independent streak for weeks. He was backed by Bank of Canada Governor Mark Carney, the banking regulator Julie Dickson and top bank CEOs. Flaherty said others could do whatever they liked, but don’t expect Ottawa to follow.
It turned out he was not alone. The final G20 communique was proof Flaherty’s feistiness had charmed others over to his cause. The communique did not even use the words “tax” or “levy” and said any further study should account for the split between bailout countries and non-bailout ones.
“Flaherty wins one for the world,” wrote one Canadian columnist with the country’s right-leaning National Post newspaper.
In a briefing with reporters, a Washington-based Canadian correspondent asked him how it felt to be a rock star.
“My children would fall off their chairs if they heard that,” said the father of teenaged triplet boys, before confessing he had indeed suffered from stage fright.
“What was a little bit unusual about this is that one tries to have unanimity of views in the G7 … and Canada is the smallest player in that group. So there was some hesitancy to disagree so clearly with the United Kingdom and France and Germany,” he said.
Perhaps emboldened by his success or by Canada’s upcoming role as G20 host in June, Flaherty’s voice got even louder as the weekend progressed and he bluntly waded into European affairs with flashy remarks about the Greek aid package, a diplomatic no-no.
While his fan club grows, Flaherty also earned some derision for his bank tax stance. IMF chief Dominique Strauss-Kahn suggested it was “shortsighted” and Oxfam, the charity group, said, “If the IMF can be on the side of the angels, why can’t Canada?”
No more Mr. Nice Guy. But will it last?