Canada's long-time finance minister has announced his resignation after steering the G7 nation through recession and back to a balanced budget forecast for next year.

Jim Flaherty, 64, said he informed Prime Minister Stephen Harper on Monday of his surprise decision to return to the private sector, one year before the next general election.

In his parting statement, Mr Flaherty dismissed speculation that health problems played any role in his decision to retire.

He had been suffering from a rare blistering skin disorder. In public he appeared bloated, tired and struggling to breathe over the past year and a half.

"My goal was always to get Canada back on track to a balanced budget after the large deficit we agreed was necessary in budget 2009 to combat the Great Recession and protect Canadian jobs," Mr Flaherty said in a statement.

"As outlined in Budget 2014, I followed through on that commitment.

“There is no doubt that Canada's budget will be balanced in 2015. Canada's fiscal position is the envy of the developed world.”

Mr Harper thanked Mr Flaherty for "ably guiding Canada through the most challenging economic times since the Great Depression and gaining the country a solid global reputation for economic management."

Mr Flaherty's political career spanned two decades, representing his hometown of Oshawa, Ontario at both the federal and Ontario province levels, though there had been recent concerns about his health.

He was made finance minister when the ruling Conservatives swept to power in a general election, and became one of Canada's longest-serving finance ministers.