July 15, 2013 / 3:00 PM / 4 years ago

Canadian prime minister brings in new-look team after scandal

Canadian Prime Minister Stephen Harper (front row, C) gestures while posing with his cabinet ministers and Canadian Governor General David Johnston during a ceremony at Rideau Hall in Ottawa July 15, 2013.Chris Wattie

OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper brought new, younger faces into his cabinet on Monday after an expenses scandal dented his Conservative government's popularity, but he kept senior players such as Finance Minister Jim Flaherty in place.

"He's the best minister in the G7. We've got to keep that going. The economy remains a priority," said Harper spokeswoman Julie Vaux of the decision to keep Flaherty, 63, in a job that gives him a crucial role in managing the economy.

Flaherty, who is taking medication for a rare skin ailment, had made it clear he wanted to stay as finance minister until the federal budget is balanced, forecast for 2015.

"He's shown that he's capable of doing the job. He tells us he's healthy and doing fine," Vaux said.

The Conservatives have long considered their handling of the economy as a strength. Canada emerged faster from the 2008 recession than most other leading industrialized nations.

Harper said in a statement that he would "continue to focus on creating jobs, growth and long-term prosperity in all regions of the country".

He named James Moore, a rising star in the government, as industry minister with responsibility for telecommunications and for reviews, which are often politically charged, of major foreign takeovers of Canadian companies.

Moore, who was heritage minister for almost five years, will be the key point person responding to any bid for ailing Canadian smartphone maker BlackBerry Ltd, which reported disappointing sales and a wider than expected loss in its most recent quarter.

Another person facing a challenging role is new Transport Minister Lisa Raitt, who will lead Ottawa's response to the train disaster in Quebec 10 days ago that killed 50 people.

Some critics say government deregulation of the railway industry was a factor in the crash, in which a runaway train carrying crude oil derailed in a small Quebec town and exploded.

The right-of-center Conservatives - who don't face an election until October 2015 - have been on the defensive since May, when two members of Parliament's upper house, the Senate, quit the party caucus after improperly claiming expenses.

The scandal undermined the popularity of the party, which came to power in early 2006 promising to boost government accountability.

Recent polls have shown the Conservatives trailing the centrist Liberals, who are led by Justin Trudeau, the telegenic son of former Liberal prime minister Pierre Trudeau.

"Today's cabinet shuffle will not provide Canadians with the real change they want to see. It is clear that the only minister who has any power in this government is the prime minister," Trudeau said in a statement.

Although Harper brought eight new faces into the cabinet, most were in secondary posts.

The big loser was former industry minister Christian Paradis, who is now international aid minister.

Paradis was heavily criticized for the way he handled a bid by China's state-owned CNOOC to take over Canadian oil company Nexen last year and was nowhere to be seen when Harper announced the takeover could go ahead.

Immigration Minister Jason Kenney, credited with boosting Conservative support among ethnic communities, had been tipped for a big promotion but found himself at the newly created Ministry of Employment and Social Development.

Even as immigration minister, Kenney had focused attention on trying to tackle serious issues in the labor force, including a lack of skilled trades people such as pipe welders.

"I will work hard to end the paradox of too many people without jobs in an economy that has too many jobs without people," Kenney said on Twitter, describing his new post.

Reporting by David Ljunggren; Editing by Janet Guttsman; and Peter Galloway

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