Canada finance minister resigns after clash with prime minister

Canada’s Finance Minister, Chrystia Freeland, resigned on Monday following a clash with Prime Minister Justin Trudeau over key policy issues, including handling potential U.S. tariffs.

Her departure, which she announced in a strongly worded resignation letter, adds further strain to an already embattled Liberal government.

Freeland criticised Trudeau’s push for increased spending, calling it a “political gimmick” that could weaken Canada’s ability to manage the looming threat of 25% import tariffs promised by U.S. President-elect Donald Trump.

According to Reuters, her resignation followed a tense meeting with Trudeau last Friday, during which he proposed she take a reduced role after weeks of disagreements over fiscal policy.

Freeland’s decision to quit came just hours before she was scheduled to present the fall economic update, expected to reveal a much larger 2023/24 budget deficit than initially forecast. Government officials confirmed the document would be unveiled as planned.

Freeland, 56, also held the position of deputy prime minister and was regarded as a key ally of Trudeau. Her exit has sparked speculation about the stability of his leadership within the Liberal Party.

“This will likely trigger a leadership crisis within the Liberal caucus … [it] is politically and personally devastating for Trudeau,” said Nik Nanos, founder of Nanos Research polling firm.

The Liberal Party, in power since 2015, has been grappling with declining approval ratings. Polls indicate the party faces a likely defeat in the next federal election, mandated by October 2025.

Freeland, a former journalist, held high-profile roles including trade minister and foreign minister before assuming the finance portfolio in August 2020. As finance minister, she led Canada’s pandemic-era economic recovery efforts.

Prime Minister Trudeau, appearing for a scheduled cabinet meeting shortly after the resignation, avoided questions from reporters. His cabinet colleagues were visibly shaken by the news.

“This news has hit me really hard, and I’ll reserve further comment until I have time to process it,” said an emotional Anita Anand, president of the Treasury Board.

Political analysts say Trudeau’s position remains secure for now, as Canadian political leaders are elected during special conventions. However, the fallout from Freeland’s resignation could deepen internal party dissent.

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