Canada finance minister and deputy PM quits amid Trump rift
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The news: Canada’s Finance Minister and Deputy Prime Minister Chrystia Freeland abruptly resigned Monday (early Tuesday morning AEDT) after a clash with Prime Minister Justin Trudeau over economic policy and how to respond to US President-elect Donald Trump’s 25% tariff threat.
The context: The move leaves Trudeau without one of his closest and most loyal allies ahead of an election due by October.
In a letter addressed to Trudeau that Freeland posted on social media just hours before she was due to deliver a fiscal update likely showing a larger deficit, Freeland said Trudeau had asked her to step aside as finance minister on Friday, offering her another cabinet role.
“Upon reflection, I have concluded that the only honest and viable path is for me to resign from the Cabinet,” the letter said.
In her letter, Freeland calls Trump’s agenda of aggressive economic nationalism “a grave challenge” and refers to a need to eschew “costly political gimmicks,” that the country can ill afford.
The reference was widely attributed to Trudeau’s plans, announced last month, for increased spending including a sales-tax holiday on certain items and C$250 checks to millions of Canadians.
Her resignation came hours before she was due to present the government’s 2024 fall economic update to parliament, which according to Reuters, was widely expected to show a much larger 2023/2024 budget deficit than forecast.
Freeland said she plans to seek re-election in her Toronto district.
Meanwhile, Trudeau has been reportedly courting former Bank of Canada governor Mark Carney for his team, though no role has been finalised.
What they said: There was no immediate reaction from Trudeau’s office.
Freeland’s letter said: “Dear Prime Minister, ...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. That means pushing back against 'America First' economic nationalism with a determined effort to fight for capital and investment and the jobs they bring… Inevitably, our time in government will come to an end. But how we deal with the threat our country currently faces will define us for a generation, and perhaps longer. Canada will win if we are strong, smart, and united. It is this conviction which has driven my strenuous efforts this fall to manage our spending in ways that will give us the flexibility we will need to meet the serious challenges presented by the United States."
The sources: Chrystia Freeland post , Reuters, Bloomberg
