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The Prime Minister After Next?

It isn’t uncommon for Canada’s finance minister to become the country’s Prime Minister. Paul Martin did it. As did Sir Charles Tupper, R.B. Bennett, John Turner, and Jean Chrétien.

So who is Joe Oliver? He is a Montrealer who got a civil Law degree and an MBA and became an investment banker. He also became executive director of the Ontario Securities Commission and CEO of the Investment Dealers Association of Canada.

So Mr Harper has picked a Finance minister straight out of the financial sector. That will affect Mr Oliver’s view of the world. At the very least he thinks the stock market is important to the economy and that the opinions of people in the financial sector are well founded.

He won’t be the next Prime Minister. A likely scenario for the next October election is that the

Finance Minister Joe Oliver waits to be introduced as a speaker at the Economic Club of Canada in Toronto on Wednesday, April 8, 2015. THE CANADIAN PRESS/Darren Calabrese

Finance Minister Joe Oliver waits to be introduced as a speaker at the Economic Club of Canada in Toronto on Wednesday, April 8, 2015. THE CANADIAN PRESS/Darren Calabrese

Conservatives will lose and either the NDP or the Liberals will form a minority government. That government will fall within two and a half years and the Conservatives will fight the election with all the public money they get from Elections Canada. By then Joe will be 78. Rob Ford’s brother has a better chance.

In the meantime we can think about what having Joe for Finance Minister means about the direction of the country.

Materials, financials and energy, make up roughly two-thirds of the TSX’s weight. Materials are actually derivatives – financial instruments – so most of the TSX and the financial sector is about speculative investing. Some capital is raised, but really we are looking at a giant casino. The focus is not or “real” investment of the sort that creates jobs. It is on making speculative gains, and these largely come at the expense of less well informed and less well represented investors. It is a sector that produces very little of value but generates high incomes for many people in the business.

Since 15% of the TSX total market cap in 2013 we can be sure that Mr Oliver is sensitive to the needs of the oil industry. Of 378 oil and gas companies listed on our exchanges in 2013, 355 were domestic companies according to Thomas Kloet, Chief Executive Officer TMX Group. Joe probably knows quite a few of the executives of these companies personally.

The mandate of the Ontario Securities Commission is “To provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in capital markets.” As a past Executive Director of the Commission, Joe understands how important it is to keep people believing in stock markets, and he knows that attracting international funds is important to the people he worked with.

My question is whether he knows anything at all about how a national economy generates real wealth.

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