Canada’s Finance Minister Resigns, Hits Trudeau on ‘Political Gimmicks’

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Prime Minister Justin Trudeau is still hanging on in Canada but there are fresh signs that he and his party are in trouble. Today, his Finance Minister unexpectedly resigned just hours before she was supposed to roll out a new budget plan.

In a shocking move, Finance Minister Chrystia Freeland announced Monday she’s resigning from Prime Minister Justin Trudeau’s cabinet, just hours before she was set to deliver the government’s fall economic statement.

It’s a disastrous development that throws the government’s economic agenda into a tailspin and leaves a huge gap on Trudeau’s front bench at a time when Liberal Party support has collapsed in the polls.

Freeland’s move to leave just before tabling the economic statement — the government’s fiscal road map at a time of great uncertainty, as Canada stares down president-elect Donald Trump’s tariff threat — is unprecedented.

Freeland posted a statement explaining her decision on social media. She gives us a window into what has been happening behind the scenes.

On Friday, you told me you no longer want me to serve as your Finance Minister and offered me another position in the Cabinet.

Upon reflection, I have concluded that the only honest and viable path is for me to resign from the Cabinet.

So Trudeau attempted to demote her and she decided to leave instead. The letter goes on to give us some pretty clear hints about why Trudeau wanted to replace her. It turns out they were arguing over Trump and tariffs. [emphasis added]

For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada.

Our country today faces a grave challenge. The incoming administration in the United States is pursuing a policy of aggressive economic nationalism, including a threat of 25 per cent tariffs.

We need to take that threat extremely seriously. That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war. That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment.

What political gimmicks is she talking about? Trudeau recently announced plans to take a two month hiatus from a sales tax and to send $250 rebate checks to millions of Canadians. That’s not a whole lot of money ($175 US) but the checks would go to a lot of people, making this a fairly expensive effort to buy a better approval rating.

On top of that, the two smaller parties that are supporting Trudeau and the Liberals both demanded that the plan be expanded to include more Canadians, raising the cost another $2 billion.

Yesterday, there was word that Freeland was trying to undo Trudeau’s promise on the checks and would not include it in today’s budget announcement.

Sources have told National Post that Finance Minister Chrystia Freeland will reverse the government’s position on the “Working Canadians Rebate” that would have cost an estimated $4.68 billion.

One person with knowledge of the plans said that the measure will not be in the fiscal update on Monday, but the government hopes to take another look in the new year, if it can find another party to support it.

So it sounds like that was the last straw. Freeland didn’t want to spend $5 billion (or potentially $7 billion) on this Trudeau political gimmick and planned to walk it back. Trudeau wasn’t having it and tried to demote her, obviously hoping to replace her with someone who would go along with his gimmick. Rather than go along with that, she resigned.

There’s no word, as of now, who will replace Freeland and whether or not the budget announcement will continue today without her or if the Liberals will need some time to get their act together first. This is definitely another blow to Trudeau’s credibility as party leader. There are probably other Liberal MPs who side with Freeland on this even if they aren’t rushing to the media to say so. 

There’s an upcoming special election in Vancouver today which could once again let us know what voters think of the Liberal Party.

The electoral district of Cloverdale–Langley City in British Columbia is up for grabs on Monday after Liberal John Aldag resigned earlier this year for an unsuccessful run in provincial politics.

Among those contesting the seat is former MP Tamara Jansen, who held it from 2019 until 2021. Jansen is hoping to capitalize on fatigue with the Liberals and a significant shift towards the Tories. The Liberals have already lost two political strongholds this year.

The Liberals are expected to take another beating today but surprises can and do happen.