Canada finance minister quits after clash with Trudeau over Trump tariffs, spending
By David Ljunggren and Ismail Shakil
Summary
Freeland was a key Trudeau ally, served as deputy prime minister
Resignation letter blasts "political gimmicks"
Economic update shows much larger deficit than expected
Labour Minister Steven MacKinnon said there had been a good and frank conversation but gave no details.
Trudeau later told a Liberal Party fundraiser in Ottawa that being prime minister was the privilege of his life.
"It's obviously been an eventful day. It has not been an easy day," he said.
The potential threat to his future was underlined when a top member of the opposition New Democrats, who have been helping keep the Liberals in power, said the party would vote to bring down Trudeau next year unless he quit.
"If we're coming up to a straight up non-confidence motion at the end of February, early March, that's one of the tools that we have," House of Commons leader for the NDP Peter Julian told the Canadian Broadcasting Corp.
"We simply cannot continue like this," he said, adding he expected Trudeau to have resigned by then.
Party leader Jagmeet Singh had earlier been less equivocal when asked about bringing down Trudeau, whom he insisted should resign.
Freeland quit just hours before she was due to present a fall economic update to parliament. The document showed the minority Liberal government had run up a 2023/24 budget deficit of C$61.9 billion, much higher than predicted.
Trudeau can be toppled if the opposition parties unite against him on a vote of no confidence, though that cannot happen until next year.
"Will the Prime Minister stay on? I think he will, but he's certainly been seriously threatened ... it could be that this is the event that will push him over the edge," said Jonathan Malloy, a political science professor at Carleton University in Ottawa.
Parliament is due to break for Christmas on Tuesday and not return until Jan. 27.
Domestic media reports said Freeland and Trudeau had clashed over a government proposal for temporary tax breaks and other spending measures.
Canada's Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, Ontario, Canada December 3, 2024.
Freeland said the threat of new U.S. tariffs represented a grave threat.
"That means keeping our fiscal powder dry today, so we have the reserves we may need for a tariff war. That means eschewing costly political gimmicks, which we can ill afford," she wrote.
Conservative leader Pierre Poilievre said the government was spiraling out of control.
"We cannot accept this kind of chaos, division, weakness, while we're staring down the barrel of a 25% tariff from our biggest trading partner," he told reporters.
"This will likely trigger a leadership crisis within the Liberal caucus ... (it) is politically and personally devastating for Trudeau," said Nik Nanos, founder of the Nanos Research polling firm.
Polls show the Liberals are set to be crushed in an election that must be held by late October 2025.
Freeland served as trade minister and then foreign minister before taking over the finance portfolio in August 2020. As minister, she oversaw the massive government spending campaign to deal with the damage done by COVID.
Trudeau has been under pressure for months from Liberal legislators alarmed by the party's poor polling numbers, in part due to unhappiness over high prices, and the loss of two safe parliamentary seats in special elections.
The party is due to contest another special election in the province of British Columbia later on Monday.
'BOMBSHELL' DECISION
"This is quite a bombshell," said Nelson Wiseman, political science professor at University of Toronto. "I think the problem the Liberals have is that they have no mechanism to remove Trudeau. Only a full blown caucus revolt could do that."
Canada's 10-year note yields climbed to their highest level since Nov. 28. They were last up 4.2 basis points at 3.2%. The Canadian dollar weakened to a four and a half year low at 1.4268 per U.S. dollar before reversing course.
When Trump came to power in 2017 he vowed to tear up the trilateral free trade treaty with Canada and Mexico. Freeland played a large role in helping renegotiate the pact and saving Canada's economy, which is heavily reliant on the United States.
Although tensions between prime ministers and finance ministers are not unusual - Trudeau's first finance minister quit in 2020 in a clash over spending - the level of invective in Freeland's letter was remarkable by Canadian standards.
Freeland left the same day as Housing Minister Sean Fraser announced he was resigning for family reasons. Another six ministers have either already quit or announced they will not be running again in the next election.
Before entering politics in 2013, Freeland worked as a journalist and in senior editorial roles with several media companies, including the Financial Times, the Globe and Mail, and Reuters where she worked from 2010 to 2013.
Additional reporting by Nivedita Balu in Toronto; Editing by Nick Zieminski. Deepa Babington and Sandra Maler
Canada's finance minister resigns, posing biggest test of Trudeau's political careerMOST OF ALL OVER GST REBATE
By David Ljunggren and Ismail Shakil
REUTERS
December 16, 2024
Summary
Freeland was a key Trudeau ally, served as deputy prime minister
Resignation letter blasts "political gimmicks"
Economic update shows much larger deficit than expected
OTTAWA, Dec 16 (Reuters) - Canadian Finance Minister Chrystia Freeland quit on Monday after clashing with Prime Minister Justin Trudeau on issues including how to handle possible U.S. tariffs, dealing an unexpected blow to an already unpopular government.
Freeland said she was quitting in the wake of a meeting last Friday with Trudeau, who asked her to take on a lesser post after the two had been arguing for weeks over spending.
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Public Safety Minister Dominic LeBlanc - a member of Trudeau's inner circle - was quickly named finance minister of the minority Liberal government.
The resignation of Freeland, 56, who also served as deputy prime minister, is one of the biggest crises Trudeau has faced since taking power in November 2015. It also leaves him without a key ally when he is on track to lose the next election to the official opposition Conservatives.
A Liberal source said Trudeau wanted Freeland to serve as minister without portfolio dealing with Canada-U.S. relations in name only - in effect a major demotion.
Trudeau met the national Liberal caucus later on Monday - including Freeland - but legislators declined to say afterwards what had happened.
Freeland said she was quitting in the wake of a meeting last Friday with Trudeau, who asked her to take on a lesser post after the two had been arguing for weeks over spending.
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Public Safety Minister Dominic LeBlanc - a member of Trudeau's inner circle - was quickly named finance minister of the minority Liberal government.
The resignation of Freeland, 56, who also served as deputy prime minister, is one of the biggest crises Trudeau has faced since taking power in November 2015. It also leaves him without a key ally when he is on track to lose the next election to the official opposition Conservatives.
A Liberal source said Trudeau wanted Freeland to serve as minister without portfolio dealing with Canada-U.S. relations in name only - in effect a major demotion.
Trudeau met the national Liberal caucus later on Monday - including Freeland - but legislators declined to say afterwards what had happened.
Labour Minister Steven MacKinnon said there had been a good and frank conversation but gave no details.
Trudeau later told a Liberal Party fundraiser in Ottawa that being prime minister was the privilege of his life.
"It's obviously been an eventful day. It has not been an easy day," he said.
The potential threat to his future was underlined when a top member of the opposition New Democrats, who have been helping keep the Liberals in power, said the party would vote to bring down Trudeau next year unless he quit.
"If we're coming up to a straight up non-confidence motion at the end of February, early March, that's one of the tools that we have," House of Commons leader for the NDP Peter Julian told the Canadian Broadcasting Corp.
"We simply cannot continue like this," he said, adding he expected Trudeau to have resigned by then.
Party leader Jagmeet Singh had earlier been less equivocal when asked about bringing down Trudeau, whom he insisted should resign.
Freeland quit just hours before she was due to present a fall economic update to parliament. The document showed the minority Liberal government had run up a 2023/24 budget deficit of C$61.9 billion, much higher than predicted.
Trudeau can be toppled if the opposition parties unite against him on a vote of no confidence, though that cannot happen until next year.
"Will the Prime Minister stay on? I think he will, but he's certainly been seriously threatened ... it could be that this is the event that will push him over the edge," said Jonathan Malloy, a political science professor at Carleton University in Ottawa.
Parliament is due to break for Christmas on Tuesday and not return until Jan. 27.
Domestic media reports said Freeland and Trudeau had clashed over a government proposal for temporary tax breaks and other spending measures.
Canada's Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, Ontario, Canada December 3, 2024.
REUTERS/Blair Gable/File Photo
"For the last number of weeks, you and I have found ourselves at odds over the best path forward for Canada," Freeland said in a letter to Trudeau posted on X.
"For the last number of weeks, you and I have found ourselves at odds over the best path forward for Canada," Freeland said in a letter to Trudeau posted on X.
Freeland said the threat of new U.S. tariffs represented a grave threat.
"That means keeping our fiscal powder dry today, so we have the reserves we may need for a tariff war. That means eschewing costly political gimmicks, which we can ill afford," she wrote.
Conservative leader Pierre Poilievre said the government was spiraling out of control.
"We cannot accept this kind of chaos, division, weakness, while we're staring down the barrel of a 25% tariff from our biggest trading partner," he told reporters.
'LEADERSHIP CRISIS'
"This will likely trigger a leadership crisis within the Liberal caucus ... (it) is politically and personally devastating for Trudeau," said Nik Nanos, founder of the Nanos Research polling firm.
Polls show the Liberals are set to be crushed in an election that must be held by late October 2025.
Freeland served as trade minister and then foreign minister before taking over the finance portfolio in August 2020. As minister, she oversaw the massive government spending campaign to deal with the damage done by COVID.
Trudeau has been under pressure for months from Liberal legislators alarmed by the party's poor polling numbers, in part due to unhappiness over high prices, and the loss of two safe parliamentary seats in special elections.
The party is due to contest another special election in the province of British Columbia later on Monday.
'BOMBSHELL' DECISION
"This is quite a bombshell," said Nelson Wiseman, political science professor at University of Toronto. "I think the problem the Liberals have is that they have no mechanism to remove Trudeau. Only a full blown caucus revolt could do that."
Canada's 10-year note yields climbed to their highest level since Nov. 28. They were last up 4.2 basis points at 3.2%. The Canadian dollar weakened to a four and a half year low at 1.4268 per U.S. dollar before reversing course.
When Trump came to power in 2017 he vowed to tear up the trilateral free trade treaty with Canada and Mexico. Freeland played a large role in helping renegotiate the pact and saving Canada's economy, which is heavily reliant on the United States.
Although tensions between prime ministers and finance ministers are not unusual - Trudeau's first finance minister quit in 2020 in a clash over spending - the level of invective in Freeland's letter was remarkable by Canadian standards.
Freeland left the same day as Housing Minister Sean Fraser announced he was resigning for family reasons. Another six ministers have either already quit or announced they will not be running again in the next election.
Before entering politics in 2013, Freeland worked as a journalist and in senior editorial roles with several media companies, including the Financial Times, the Globe and Mail, and Reuters where she worked from 2010 to 2013.
Additional reporting by Nivedita Balu in Toronto; Editing by Nick Zieminski. Deepa Babington and Sandra Maler
December 16, 2024
By The Associated Press
Canada's Prime Minister Justin Trudeau looks on at the start of a cabinet swearing in ceremony for Dominic LeBlanc, not shown, who will be sworn in as Finance Minister, at Rideau Hall in Ottawa, Ontario, on Dec. 16, 2024.Justin Tang/The Canadian Press via AP
TORONTO — Canadian Prime Minister Justin Trudeau faced the biggest test of his political career after Finance Minister Chrystia Freeland, long one of his most powerful and loyal ministers, resigned from the Cabinet on Monday.
The stunning move raised questions about how much longer the prime minister of nearly 10 years — whose popularity has plummeted due to concerns about inflation and immigration — can stay on as his administration scrambles to deal with incoming U.S. President-elect Donald Trump.
"The Great State of Canada is stunned as the Finance Minister resigns, or was fired, from her position by Governor Justin Trudeau," Trump posted on Truth Social. "Her behavior was totally toxic, and not at all conducive to making deals which are good for the very unhappy citizens of Canada. She will not be missed!!!"
Trump previously trolled Trudeau by calling Canada a state. And during his first term in his office — when he renegotiated the free trade deal with Canada and Mexico — Trump said Freeland wasn't liked.
Trudeau swiftly named longtime ally and close friend Dominic LeBlanc, the pubic safety minister who recently joined him at dinner with Trump at Mar-a-Lago, to replace Freeland. Freeland did not make that trip.
Canadian Cabinet voices support for Trudeau as some Liberals prepare to confront him
After being sworn in, LeBlanc told reporters he and Trudeau are focused on the cost of living facing Canadians and on finding common ground with Trump on border security and economic issues.
"It's not been an easy day," Trudeau later told a room of party supporters. He called it one of his party's "toughest days" but he did not say what he planned to do.
Trudeau faces calls to resignJagmeet Singh, leader of the opposition New Democratic Party which Trudeau's ruling Liberals have relied upon to stay in power, called for him to resign earlier Monday.
"He has to go," NDP leader Singh said.
The main opposition Conservatives have not called for Trudeau's resignation but demand an election.
But a no confidence vote in the government is not imminent with Parliament about to break for the holidays .
Freeland, who was also deputy prime minister, said Trudeau had told her on Friday he no longer wanted her to serve as finance minister and offered her another role in the Cabinet. But she said in her resignation letter that the only "honest and viable path" was to leave the Cabinet.
"For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada," Freeland said.
Freeland warns against 'costly political gimmicks'Freeland and Trudeau disagreed about a two-month sales tax holiday and 250 Canadian dollar ($175) checks to Canadians that were recently announced. Freeland said Canada is dealing with Trump's threat to impose sweeping 25% tariffs and should eschew "costly political gimmicks" it can "ill afford."
Canada's Trudeau says he had an 'excellent conversation' with Trump after tariffs threat
"Our country is facing a grave challenge," Freeland said in her letter. "That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war."
A Liberal party official said Freeland was offered a position as minister in charge of Canada-U.S. relations without portfolio and without a department. The official, who spoke on condition of anonymity because of not being authorized to speak publicly on the matter, said the position would have been in name only and wouldn't have come with any of the tools Freeland previously had when she negotiated the trade with the United States.
Freeland, who chaired a Cabinet committee on U.S. relations, had been set to deliver the fall economic statement and likely announce border security measures designed to help Canada avoid Trump's tariffs. Trump has threatened to impose a 25% tax on all products entering the U.S. from Canada and Mexico unless the neighbors stem the numbers of migrants and drugs.
The statement shows a much larger deficit than expected for the fiscal year and more than a billion for border security.
Can Trudeau survive?Trudeau has said he plans on leading the Liberal Party into the next election, but many party members have said they don't want him to run for a fourth term, and Freeland's departure was a huge blow.
Trudeau met with his lawmakers on Monday evening. Later, most of them brushed past reporters, declining to say what was said in the meeting.
Liberal lawmaker Chad Collins said they were "not united."
"There's still a number of our members that want a change in leadership. I'm one of them," he said. "I think the only path forward for us is to choose a new leader."
No Canadian prime minister in more than a century has won four straight terms.
The federal election has to be held before October. The Liberals must rely on the support of at least one other major party in Parliament, because they don't hold an outright majority themselves. If NDP pulls support, an election can be held at any time.
Minister of Finance and Deputy Prime Minister Chrystia Freeland, right, and Minister of Public Safety, Democratic Institutions and Intergovernmental Affairs Dominic LeBlanc arrive for a news conference on Parliament Hill in Ottawa, Ontario, on Dec. 11, 2024.Spencer Colby/Spencer Colby/The Canadian Press via AP
Singh said all options are on the table.
Trudeau channeled his father's popularityTrudeau channeled the star power of his father, late Prime Minister Pierre Trudeau, in 2015, when he reasserted the country's liberal identity after almost a decade of Conservative Party rule.
But Canadians are now frustrated by the rising cost of living and other issues, including immigration increases following the country's emergence from the COVID-19 pandemic.
Justin Trudeau's legacy includes opening the doors wide to immigration. He also legalized cannabis and brought in a carbon tax intended to fight climate change.
Freeland also said in her letter that Canadians "know when we are working for them, and they equally know when we are focused on ourselves. Inevitably, our time in government will come to an end."
Trudeau tries to bring in another Cabinet memberSeparately, Trudeau has been trying to recruit Mark Carney, the former head of the Bank of England and Bank of Canada, to join his government. Carney has long been interested in entering politics and becoming the leader of the Liberal Party. LeBlanc's appointment to finance suggests that won't happen
Daniel Béland, a political science professor at McGill University in Montreal, called Freeland's resignation a political earthquake.
"This is clearly a minority government on life support but, until now, the (opposition) NDP has rejected calls to pull the plug on it," Béland said. "It's hard to know whether this resignation will force the NDP to rethink its strategy."
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