Canada’s finance minister resigns as unpopular Trudeau faces biggest test of his political career

Canadian Prime Minister Justin Trudeau faces the biggest test of his political career after Finance Minister Chrystia Freeland, long one of his most powerful and loyal ministers, announced Monday that she was resigning from the Cabinet.

It was a move that stunned the country and raised questions about how much longer the unpopular Trudeau can stay in his job.

Freeland, who was also deputy prime minister, said that Trudeau had told her Friday that he no longer wanted her to serve as finance minister and that he offered her another role in the Cabinet.

But she said in her resignation letter to the prime minister 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 and Trudeau disagreed about a two-month sales tax holiday and $250 Canadian ($175) checks to Canadians that were recently announced.

Freeland said that Canada is dealing with US President-elect Donald Trump’s threat to impose sweeping 25% tariffs and should eschew “costly political gimmicks” it can “ill afford.”

“Our country is facing a grave challenge,” Freeland said in the letter. “That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war.”

The resignation comes as Freeland, who chaired a Cabinet committee on US relations, was set to deliver the fall economic statement and likely announce border security measures designed to help Canada avoid Trump’s tariffs. The US president-elect has threatened to impose a 25% tax on all products entering the US from Canada and Mexico unless they stem the numbers of migrants and drugs.

‘Trudeau has lost control’

Trudeau has said that he plans on leading the Liberal Party into the next election, but there are some party members who don’t want him to run for a fourth term. It wasn’t immediately clear what Freeland’s resignation from the Cabinet means for Trudeau’s immediate future.

“This news has hit me really hard,” a shocked Transport Minister Anita Anand said. She added that she needed to digest it before commenting further.

Opposition Conservative leader Pierre Poilievre said that the government is losing control at the worst possible time.

“Justin Trudeau has lost control, but he’s hanging onto power,” Poilievre said.

“All this chaos, all this division, all this weakness is happening as our largest neighbor and closet ally is imposing 25% tariffs under a recently elected Trump with a strong mandate, a man who knows how to identify weakness.”

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 major party in Parliament, because they don’t hold an outright majority themselves. If the opposition New Democratic Party, or NDP, pulls support, an election can be held at any time.

Trudeau channeled the star power of his father in 2015, when he reasserted the country’s liberal identity after almost a decade of Conservative Party rule. But the son of late Prime Minister Pierre Trudeau is now in big trouble. Canadians have been frustrated by the rising cost of living and other issues like immigration increases following the country’s emergence from the COVID-19 pandemic.

“As a country we have to project strength,” Ontario Premier Doug Ford said. “It’s chaos right now up in Ottawa.”

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 said in the resignation 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.”

Freeland’s resignation comes as Trudeau has been trying to recruit Mark Carney to join his government. Carney is the former head of the Bank of England and Bank of Canada.

He was so well regarded after helping Canada dodge the worst of the global economic crisis that the UK named him the first foreigner to serve as governor of the Bank of England since it was founded in 1694.

Carney has long been interested in entering politics and becoming the leader of the Liberal Party. It wasn’t immediately clear if Carney has agreed to join Trudeau’s Cabinet.

A political earthquake

“This is quite a bombshell,” said Nelson Wiseman, professor emeritus at the University of Toronto. “Freeland was not only finance minister but also deputy prime minister and, until a couple of years ago, was seen as Trudeau’s heir as Liberal leader and prime minister.”

Wiseman said that leaks from the prime minister’s office suggest that she was a poor communicator and made Freeland’s status questionable.

“There was talk about her becoming foreign minister again and that would have been a good fit for her, but the stab in the back from the prime minister’s office cast the die,” Wiseman said.

Daniel Béland, a political science professor at McGill University in Montreal, also called it a political earthquake and not just because Freeland was the second most powerful official in government.

“Also because of how she resigned: by publishing a letter on social media that clearly criticizes the prime minister only hours before she was supposed to present the government’s fall economic statement,” Béland said.

“This is clearly a minority government on life support but, until now, the (opposition) NDP has rejected calls to pull the plug on it. It’s hard to know whether this resignation will force the NDP to rethink its strategy.”

NDP leader Jagmeet Singh released a statement, but didn’t say whether his party would vote to topple the government.

“While the Liberals fight with each other, I believe we should be fighting for Canadians jobs at risk from Donald Trump’s tariffs,” Singh said in a statement.

“People deserve a government that fights for you for a change.”