The following is the letter Prime Minister Jean Chretien sent to Paul Martin.

Dear Paul:

It is with sadness that I confirm that you are leaving the cabinet. As I told you, I will always be grateful to you for your remarkable work as Minister of Finance. There are very few Canadians who have ever served in a cabinet with such distinction.

Together we have achieved a great deal for Canada and Canadians. The success of the government's economic policy has situated Canada very well for continued growth and prosperity. Your contribution as Minister of Finance will be a continuing source of pride for you and for me.

You and I have worked extremely well together, ever since we took office in November 1993, on all matters relating to government policy. We have always been in full agreement on economic and fiscal policy.

But, unfortunately, matters unrelated to governing have gotten in the way of our working together on government policy. As such, we both understand, with real regret, that it is in the best interest of the government and the country that you step down from the cabinet.

As Prime Minister and on behalf of all our colleagues in cabinet, I thank you for a job very well done. Aline and I wish you and Sheila all the very best.

Sincerely yours,

Jean Chrétien

The following is Paul Martin's public statement shortly after being removed as finance minister:

Good evening.

Thanks to the hard work and the sacrifice of Canadians we are now in a position to make great strides as a country. With courage and with vision we can confirm Canada's place among the leading nations of the world for decades to come. We can build an even stronger economy, we can build an even more fair society.

What I also know, however, is that in order to achieve this objective the cabinet must be united in its vision. Certainly the prime minister and his finance minister must be working in common cause and with a shared perspective on the most basic questions of direction and approach.

For a long time the natural tensions between my views and those of the prime minister were well within the manageable, even healthy, range that is customary in a sound, working relationship. In fact, we were always able to resolve disagreements working issue by issue.

Unfortunately in recent months, and certainly during the last few days, the working relationship between myself and the prime minister had deteriorated. It was therefore threatening to impede our focus on the very important choices that confront us as a nation.

As I indicated on Friday, I intended to reflect on my options. That is now a moot point. I am no longer a member of the cabinet. And John Manley is now the new minister of finance. The nation already has full confidence in his skills. He is tremendously well qualified and will do an outstanding job, and I wish him the very best.

I also wish to express my genuine appreciation to the prime minister for the opportunity to serve as finance minister for the past nine years. It has been a great honour to serve my country.

Now before concluding, I'd like to emphasize a few things.

First, while these have been certainly a difficult few days, I feel passionately about the future of this nation and about the opportunities that are before us. I feel strongly with the Liberal party of Canada into which I was born and raised. And I believe very much in our caucus and cabinet. They are an outstanding and dedicated group of individuals motivated by a desire to make a great nation greater still.

Second, I will continue to sit as the member of Parliament for LaSalle-Emard, an active member of Parliament.

Third, I want to thank the many friends who called or sent messages in recent days. I'm enriched by their friendship and their support. In that respect, I want to thank above all others Sheila and my family for their patience and their advice.

As a final note, I would like to urge financial markets to keep in mind the extraordinary strength of the Canadian economy. GDP growth in the first quarter of this year was nothing short of remarkable. We're the only G7 nation in surplus and job creation continues to be very strong. When markets open tomorrow these are the facts that should be weighed.

Ministers of finance come and go. I leave knowing that our economy is very robust. And now I look forward to the work and the challenges that lie ahead.