“LEADERSHIP CRISIS”
“This will likely trigger a leadership crisis within the Liberal caucus … (it) is politically and personally devastating for Trudeau,” said Nik Nanos, founder of the Nanos Research polling firm.
Polls show the Liberals are set to be crushed in an election that must be held by late October 2025.
Freeland, a former journalist, served as trade minister and then foreign minister before taking over the finance portfolio in August 2020. As minister, she oversaw the massive government spending campaign to deal with the damage done by COVID.
Trudeau has been under pressure for months from Liberal legislators alarmed by the party’s poor polling numbers, in part due to unhappiness over high prices, and the loss of two safe parliamentary seats in special elections.
The party is due to contest another special election in the province of British Columbia later on Monday.
“BOMBSHELL” DECISION
“This is quite a bombshell,” said Nelson Wiseman, political science professor at University of Toronto. “I think the problem the Liberals have is that they have no mechanism to remove Trudeau. Only a full blown caucus revolt could do that.”
Canada’s 10-year note yields climbed to their highest level since Nov 28. They were last up 4.2 basis points at 3.2 per cent. The Canadian dollar weakened to a four and a half year low at 1.4268 per US dollar before reversing course.
Domestic media reports said Freeland and Trudeau had clashed over a government proposal for temporary tax breaks and other spending measures.
“For the last number of weeks, you and I have found ourselves at odds over the best path forward for Canada,” Freeland said in a letter to Trudeau posted on X.
Freeland said the threat of new US tariffs represented a grave threat.
“That means keeping our fiscal powder dry today, so we have the reserves we may need for a tariff war. That means eschewing costly political gimmicks, which we can ill afford,” she wrote.
When Trump came to power in 2017 he vowed to tear up the trilateral free trade treaty with Canada and Mexico. Freeland played a large role in helping renegotiate the pact and saving Canada’s economy, which is heavily reliant on the United States.
Although tensions between prime ministers and finance ministers are not unusual – Trudeau’s first finance minister quit in 2020 in a clash over spending – the level of invective in Freeland’s letter was remarkable by Canadian standards.
Freeland left the same day as Housing Minister Sean Fraser announced he was resigning for family reasons. Another six ministers have either already quit or announced they will not be running again in the next election.
Before entering politics in 2013, Freeland worked as a journalist and in senior editorial roles with several media companies, including the Financial Times, the Globe and Mail, and Reuters News where she worked from 2010 to 2013.
