When Jim Flaherty walked into the House of Commons to unveil the last federal budget, he wore a weathered pair of brogues, refurbished with new soles and laces.

It was a conscious choice to break with a Canadian tradition of finance ministers buying new shoes for the occasion. Flaherty, educated in Princeton and a lawyer for more than 20 years, wanted to show his frugality.

"It suits the budget," he said last February. "We're spending in a controlled way given the economic circumstances this year and next year."

It was also a not-too-subtle attack against the Liberals. Flaherty presents himself as a classic fiscal conservative, firmly opposed to big government and high taxes, but he's also a politician who likes to fight and speak his mind.

Wearing old shoes was one of the milder political statements he has made over the past two decades, both as an Ontario MPP and as a cabinet minister under Prime Minister Stephen Harper.

During the winter of 2002, while campaigning for the leadership of the Ontario Progressive Conservative party, he had a proposal for homeless people who refused to be placed in shelters or sent to hospital -- toss them in jail.

"It will be illegal to live in public places," he said.

The Globe and Mail criticized the remark in an editorial, saying he was ignoring the actual causes of homelessness, and was just trying to get noticed in a heated campaign.

"His proposal has done what he wanted; it has brought him attention.

It has not made him look thoughtful, or informed, or particularly good leadership material," the paper said.

Flaherty eventually lost the campaign.

But during his years in provincial politics, he served as the high- profile finance minister of Mike Harris and was at the forefront of the so-called "Common Sense Revolution." He oversaw widespread privatization of provincial services and reduced taxes, as his government chipped away at Ontario's massive deficit.

Under a recession, it had ballooned to $11.2 billion by 1995, when the Progressive Conservatives defeated the NDP government of Bob Rae, and Flaherty first won his seat.

After he lost the 2002 leadership campaign to replace Harris, he was shuffled from finance and appointed minister of enterprise. The government was defeated a year later and left behind a deficit of $5 billion.

From Oshawa to Ottawa

Flaherty moved to federal politics at the end of 2005. The following year he won his seat in the Ontario riding of Whitby-Oshawa. Just one month after that, Harper gave him a cabinet post and he was again a minister of finance.

After years of budget surpluses, the Canadian economy was in far better shape than Ontario in the mid-90s. But under Harper's leadership, he sought to cut back federal revenue and promised to slash the Goods and Services Tax.

Jean Chretien had once promised to scrap the GST in favour of another revenue system, but never did. While the tax was despised by Canadians across the country, economists likened it to a necessary evil that helped pay down the country's debt.

Critics dismissed the move to cut the GST as an easy way to gain support from the public, but not an effective tax cut. Don Drummond, chief economist of TD Financial Group, was among the unimpressed.

"The federal surpluses have offered a golden opportunity to move forward in a very decisive manner. The GST rate cuts don't move that agenda forward at all," Drummond told the Globe, as part of a survey of 20 leading economists before the first GST came into effect.

Flaherty went forward with a one-percentage-point reduction. And one year later, in an economic statement, Flaherty said he would do it again, among other tax cuts totaling more than $10 billion.

"We haven't seen taxes this low since Lester B. Pearson was prime minister," he boasted.

Income trusts

But if the GST cut was more about politics than economics, Flaherty made an extremely tough decision in 2006, when he cracked down on income trusts.

In the election campaign, Harper had said he wouldn't touch them. But on Oct. 31, Flaherty announced the government would have to break that promise. He said income trusts were gaining in popularity and shifting the tax burden from corporations to individuals.

"This trend has now moved into the core of our industrial and knowledge-based economy," he said. "Left unchecked, such corporate decisions would result in billions of dollars in less revenue for the federal government to invest in the priorities of Canadians."

Liberals, who had avoided the political kryptonite during their own time in government, demanded Flaherty apologize to all Canadians who stood to lose money. Many were retired and had put much of their investment portfolios into income trusts.

At first, he refused, telling CTV's Question Period: "It was a decision that was considered at some length and deliberately and with due consideration." It took a week of constant pressure from the opposition before he stood up in the House of Commons and said he was sorry his party went back on its word.

It was an extremely rare scene -- the veteran fighter bowing under pressure from his opponents. But last year, Flaherty was back in the ring, this time picking a fight with Ontario Premier Dalton McGuinty.

While giving a speech to the Halifax Chamber of Commerce, he slammed Ontario for having the highest business taxes in the country.

"It discourages investment in the province of Ontario," he said. "If you're going to make a new business investment in Canada, and you're concerned about taxes, the last place you will go is the province of Ontario.''

For better or worse, it was classic Flaherty.