Chrystia Freeland resigns from Trudeau’s cabinet #CanadaFinance

What we know so far

• Finance Minister sends resignation letter to Trudeau hours before she was due to deliver federal government’s fall economic statement.
• Freeland says reaction to Trump tariff pledge should avoid “costly political gimmicks”, an apparent reference to GST holiday she and her department did not endorse.
• Poilievre wants other opposition parties to help defeat government, while Singh calls on Trudeau to step down.
• Freeland will remain an MP in the Liberal caucus, and run for re-election in her Toronto riding.
• Dominic LeBlanc sworn in as Finance Minister.

Chrystia Freeland abruptly resigned as Finance Minister and Deputy Prime Minister on Monday morning, delivering a condemnation of Prime Minister Justin Trudeau’s leadership and his handling of the economy.

Dominic LeBlanc, a close friend of Trudeau, was sworn in as Finance Minister during a cabinet shuffle Monday afternoon. He was previously public safety minister.

Ms. Freeland informed the Prime Minister about her resignation just before he was to meet his cabinet. She had been set to deliver the fall fiscal and economic update in the House of Commons in the afternoon. The blueprint revealed that Ottawa missed its deficit target of $40.1-billion by more than $20-billion.

The Globe and Mail reported last week there were rising tensions between Ms. Freeland and Mr. Trudeau and his office over spending and efforts to recruit former central banker Mark Carney into the government.

Ms. Freeland said in a letter to the Prime Minister that she was resigning after he informed her on Friday that he no longer wanted her to be his top economic minister. A source said Mr. Trudeau spoke to Ms. Freeland in a Zoom call, and offered a cabinet portfolio on Canada-U.S. relations, but without any ministry attached. The source said she regarded the offer as a demotion. The Globe is not identifying the source, who was not authorized to discuss the matter.

“Upon reflection, I have concluded that the only honest and viable path is for me to resign from the Cabinet,” she said in a letter to Mr. Trudeau that she posted online. “To be effective, a minister must speak on behalf of the Prime Minister and with his full confidence. In making your decision, you made clear that I no longer credibly enjoy that confidence and possess the authority that comes with it.”

Ms. Freeland said Mr. Trudeau offered her another cabinet post but did not specify what it was.

Ms. Freeland, who was the first female federal finance minister, wrote in the letter that she and the Prime Minister have been “at odds” over the past few weeks.

The Globe reported last week, citing 10 sources, that tensions have risen between Ms. Freeland and the PMO over increased spending, such as the two-month GST holiday on toys, alcohol and food that began Saturday, and a promised $250 rebate in the spring for working people earning $150,000 or less. The two measures would cost $6.28-billion.

Freeland’s letter of resignation

Ms. Freeland said the country faces a grave challenge, particularly from U.S. president-elect Donald Trump. He is promising to impose tariffs of 25-per-cent on all imCanada and Mexico unless firm action is taken to control the borders to stop illicit drugs, such as opioids, from flowing into the United States.

Ms. Freeland said the government needs to keep spending under control to be able to effectively deal with the incoming Trump administration, in an apparent swipe at the GST tax holiday measure, seen by her own department as economically unwise.

“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,” she wrote. “That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment.”

In recent days, there had been speculation that Mr. Carney would become finance minister with a role in overseeing Canada-U.S. relations. Mr. LeBlanc’s appointment as Finance Minister puts that to rest – for now.

Two sources close to Mr. Carney strongly suggested that he would not accept the offer from the Prime Minister to join the government. The Globe and Mail is not identifying the sources, who were not authorized to speak about the matter.

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The Globe reported last week that three sources had confirmed talks were back on between Mr. Carney, the former governor for both the banks of Canada and England, and the Prime Minister’s Office, after an unsuccessful attempt in the summer. Two of the sources characterized the discussions as serious and said they have crystallized over several weeks.

While one of them cautioned that no specific offer had been made, the two other sources said Mr. Trudeau and his inner circle believe the finance post would be the only job Mr. Carney would accept.

Political leaders react

Conservative Leader Pierre Poilievre held a news conference Monday, saying the Prime Minister has lost control and urging the NDP to join the other opposition parties to defeat the minority Liberal government.

“The minister of finance resigned in the middle of an economic crisis and one-fifth of his caucus has lost confidence in him. That shows Justin Trudeau has lost control but he is hanging onto power,” he said. “Everything is spiraling out of control.”

Opinion: Clashing with consecutive finance ministers shows Trudeau’s disregard for policy

NDP Leader Jagmeet Singh called on Mr. Trudeau to resign but did not say his party would withdraw confidence in the Liberal government, which is what would be needed to force an election.

Despite repeated questioning, Mr. Singh would only say “all options are on the table.” He then walked away from the scrum as reporters sought more clarity on the NDP’s position.

Mr. Trudeau went into his previously scheduled cabinet meeting just before Ms. Freeland made her resignation public. Many ministers declined to comment on their way into cabinet, with House Leader Karina Gould walking silently as reporters asked who would now deliver the fall economic statement. Ms. Gould tabled the fall economic update in the House in the afternoon.

Housing Minister Sean Fraser, who announced his own resignation from cabinet on Monday, was caught off guard by Ms. Freeland’s announcement, coming as he was making his own.

“I found her to be professional, supportive of me as a member of Parliament, and I consider her a friend, and that friendship will continue long after my time in politics,” he told reporters.

Mr. Fraser said he was leaving cabinet to spend more time with his family and won’t run again in his Nova Scotia riding. He said he made the decision earlier this fall.

Reaction to Chrystia Freeland’s resignation from Trudeau’s cabinet from across political landscape

Treasury Board President Anita Anand was visibly upset when she heard about Ms. Freeland’s resignation as she entered a cabinet meeting.

“This news has hit me really hard, and I’ll reserve further comment until I have time to process it,” she said.

Ms. Freeland will continue to sit in the Liberal caucus as a backbench MP, and will run again in her Toronto riding of University-Rosedale in the next election.

Following The Globe’s reporting last week, the Prime Minister declined to come to Ms. Freeland’s defence despite relentless questioning from the opposition. Still, at a Tuesday night speech during a dinner to promote women’s involvement in politics, Mr. Trudeau took credit for appointing Ms. Freeland, noting that she is Canada’s first female finance minister. Three days later he told her he no longer wanted her to serve in that role.

“I’ve touted the adage, ‘add women, change politics,’ which to us is more than just words. We’ve taken action to make it a reality, appointing the first female finance minister,” Mr. Trudeau said last Wednesday. “I want you to know that I am, and always will be, a proud feminist. You will always have an ally in me and in my government.”

Small Business Minister Rechie Valdez would not answer reporters’ questions when asked if she still had confidence in the Prime Minister, whether she supports him and whether he should stay on.

Monday’s events mean “it’s getting tougher and tougher,” for the Prime Minister to stay on as leader, said Liberal MP Francis Drouin. “That road is getting very slim right now, extremely slim.”

Liberal MP Ali Ehsassi said he agrees that it is getting more difficult for Mr. Trudeau to stay on.

Speaking at a brief photo op during the premiers’ meeting at a Toronto airport hotel, Ontario Premier Doug Ford was asked if he was concerned about Ms. Freeland’s resignation.

“We all are,” Mr. Ford said, sitting at the table with his fellow premiers. “This is a time for the premiers to step up, which we’re going to, and protect unity across the country.”

Asked by The Globe if cabinet still has confidence in the Prime Minister, Agriculture Minister Lawrence MacAulay only said: “Let’s say, I do.”

He declined to comment on whether Mr. Trudeau should stay on as Prime Minister, telling The Globe to “ask Justin himself.”

“I’ve always supported the Prime Minister,” he added. “It’s his decision.”