Canadian Finance Minister Chrystia Freeland Quit Amid Clash with Trudeau Over Tariffs
Canadian Finance Minister Chrystia Freeland resigned on Monday, dealing a significant blow to the minority Liberal government led by Prime Minister Justin Trudeau. Freeland’s resignation comes after a clash with Trudeau over how to handle potential U.S. tariffs, with Freeland arguing that the government needs to keep its “fiscal powder dry” in case of a tariff war.
Freeland, 56, had been a key ally of Trudeau and had served as his deputy prime minister. However, the two had been at odds for weeks over spending and taxation, with Freeland pushing for a more cautious approach to fiscal policy. Trudeau had reportedly asked Freeland to take on a lesser role, dealing with Canada-U.S. relations, but Freeland refused.
The resignation is seen as a major crisis for Trudeau, who is already facing an uphill battle in the next election. The Liberal Party is set to be crushed in an election that must be held by late October 2025, with polls showing the party’s popularity at an all-time low.
The Canadian dollar weakened to a four-and-a-half-year low against the U.S. dollar after Freeland’s resignation, and the yield on the country’s 10-year bond climbed to its highest level since November.
Freeland’s resignation comes just hours before she was due to present a fall economic update to parliament, which showed the government had run up a 2023/24 budget deficit of C$61.9 billion, much higher than predicted.
Trudeau has been under pressure from within his own party over his leadership, with many Liberal legislators calling for him to step down. The opposition Conservative Party is expected to make gains in the next election, and Freeland’s resignation has raised questions about the party’s ability to recover.
Freeland’s resignation has also sparked speculation about the future of Trudeau’s leadership. The prime minister is expected to face a vote of no confidence in parliament next year, and his resignation could be a way to avoid that embarrassment.
