Canadian Finance Minister Chrystia Freeland quits Trudeau govt, warns against ‘costly political gimmicks’

Canadian Finance Minister Chrystia Freeland resigned on Monday — hours before she was slated to deliver a statement on the economy. The Deputy PM also flagged the “grave challenge” that Canada now faces from “aggressive economic nationalism” in the United States in her resignation letter. Freeland — considered to be Justin Trudeau's most powerful and loyal minister — noted that she had found herself at odds with the Prime Minister in recent weeks. 

"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% tariffs. We need to take that threat extremely seriously," Freeland cautioned. 

The Deputy PM also revealed that Prime Minister Justin Trudeau had offered her a different Cabinet position after deciding she would no longer serve as Finance Minister. Public Safety Minister Dominic LeBlanc — a member of Trudeau's inner circle — was named finance minister of the minority Liberal government later in the evening.

Freeland also insisted that it was necessary for Canadians to “keep our fiscal power dry” at this point in order to have reserves ready for a possible 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,” her resignation letter added.

A Liberal source told Reuters that Trudeau had wanted Freeland to serve as minister without portfolio dealing with Canada-US relations in name only — in effect a major demotion. Meanwhile domestic media reports said Freeland and Trudeau had clashed over a government proposal for temporary tax breaks and other spending measures.

The Canadian PM continues to remain on shaky ground as his popularity dips with less than a year left for elections. Trudeau can be toppled if the opposition parties unite against him on a vote of no confidence — though that cannot happen until next year.

(With inputs from agencies)