Paul Martin was one of Canada’s greatest Ministers of Finance, and it is for his achievements in this role that history will chiefly remember him. However this book covers his entire life to the point of writing, from early childhood to his activities after losing the 2006 federal election and leaving politics.
The use of private sector economic forecasts as projections for nominal GDP, the broadest measure of the tax base, and other economic variables crucial to the budget estimates started under Martin, providing a credibility to the budget estimates because the forecasts came from outside the Department of Finance. The contingency reserve of one to several billion dollars against emergencies that is a standard part of our federal budgets also started with Martin. Oddly, these very useful innovations, retained under the succeeding Conservative government, have only really come under assault under the new Liberal government of Justin Trudeau.
Martin inherited the inflation targeting regime at the Bank of Canada from the preceding Progressive Conservative government, and negotiated the first renewal of an inflation-control agreement in December 1993. His own account of these negotiations differs dramatically from the account given by the Governor of the Bank of Canada at that time, John Crow, in his own memoirs as is described in detail in my paper: “Why the Bank of Canada’s Target Rate of Inflation Should Be Lowered Rather Than Raised”:
While he claims that Crow was adamant for a reduction in the target range to 1%, Crow had earlier maintained that he was willing to compromise on a 1.5% target rate. Since Crow was unwilling to agree to a continuation of 2% as the target rate he was replaced as governor by Gordon Thiessen, with the change announced at the same time as the renewal agreement. It is Martin, more than anyone else, who can take the credit, if that is the right word, for central banks around the world making 2% inflation their target; for Crow 2% was just one more intermediate target on the path to price stability.
People who have seen Martin’s stiff, earnest interviews on television will be pleasantly surprised by the warmth and humour in his memoirs. On the other hand, the bare-knuckle political partisanship of the book is hard to take. To give just one example, Martin knows very well that “virtually all economists” did not agree with him that Harper’s promised reductions in the GST in the 2015 election campaign were poor public policy. And we now know that they led to the switch to HST regimes by British Columbia, Ontario and Prince Edward Island, and the much greater integration of Quebec’s QST regime with the GST. Under the preceding Liberal government only New Brunswick, Nova Scotia and Newfoundland and Labrador had switched to an HST regime, all when Martin was Finance Minister.
Born into political royalty, Paul Martin Jr seemed to have it all. As a businessperson, he pulled off one of the most successful leveraged buyouts in Canadian history - and along the way, met a young labour lawyer named Brian Mulroney. As finance minister - well, he was the most successful and powerful ever, pulling off six surpluses in a row. And once he got his dream job - well, let's just say, Prime Minister, Interrupted. This book is a candid account of his slow rise to the top, and how it all fell apart when he got there in just two short years.
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