Canadian Prime Minister Justin Trudeau is facing the most significant political challenge of his nearly decade-long tenure after Finance Minister Chrystia Freeland, one of his most trusted and influential cabinet members, resigned on Monday.
The unexpected departure of Freeland, who also served as deputy prime minister, has raised questions about Trudeau’s leadership as his Liberal government grapples with falling popularity, economic pressures, and tense relations with incoming U.S. President-elect Donald Trump.
Freeland’s resignation marks a major blow for Trudeau, whose government has struggled to address growing concerns about inflation, immigration, and living costs. Freeland revealed that Trudeau informed her last week he no longer wanted her as finance minister, offering her a different cabinet position. However, she stated in her resignation letter that stepping down was the only “honest and viable path.”
“For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada,” Freeland wrote, referencing recent disagreements over government spending plans.
Freeland specifically criticized Trudeau’s decision to implement short-term economic measures, such as a two-month sales tax holiday and direct payments of 250 Canadian dollars ($175) to citizens. She argued that Canada needs to prepare for potential economic fallout from Trump’s threats to impose steep 25% tariffs on Canadian exports.
“Our country is facing a grave challenge,” Freeland said. “That means keeping our fiscal powder dry today so we have the reserves we may need for a coming tariff war.”
In response to the resignation, Trudeau swiftly appointed Public Safety Minister Dominic LeBlanc, a close ally and confidant, as the new finance minister. LeBlanc, who recently accompanied Trudeau to a dinner with Trump at Mar-a-Lago, emphasized that his focus will be on addressing Canada’s cost-of-living crisis and finding common ground with the U.S. on border security and economic issues.
Trudeau acknowledged the gravity of the situation, telling supporters, “It’s not been an easy day. This has been one of our toughest moments.” However, he stopped short of addressing calls for his resignation.
The resignation has reignited demands for Trudeau to step aside. Jagmeet Singh, leader of the New Democratic Party (NDP)—whose support has allowed Trudeau’s minority government to stay in power—publicly urged him to resign, stating, “He has to go.”
While the main opposition Conservatives have stopped short of demanding Trudeau’s resignation, they are calling for a federal election. With Parliament set to break for the holidays, a no-confidence vote does not appear imminent. However, Singh warned that “all options are on the table.”
Freeland’s departure signals deeper fractures within the Liberal Party. A Liberal lawmaker, Chad Collins, openly admitted the party’s lack of unity, saying, “There’s still a number of our members that want a change in leadership. I’m one of them. I think the only path forward for us is to choose a new leader.”
Political analysts believe Trudeau’s grip on power is increasingly tenuous. Daniel Béland, a political science professor at McGill University, described Freeland’s resignation as a “political earthquake” that could push the NDP to reconsider its support for the minority government.
“This is clearly a minority government on life support,” Béland added. “It’s hard to know whether this resignation will force the NDP to rethink its strategy.”
Trudeau rose to power in 2015 by channeling the political charisma of his father, former Prime Minister Pierre Trudeau, and promising a progressive vision for Canada. His legacy includes legalizing cannabis, implementing a carbon tax to combat climate change, and opening Canada’s doors to increased immigration.
However, public frustration over rising living costs and other challenges has eroded his popularity. With the next federal election required by October, Trudeau faces mounting pressure from within his party and from opposition forces to step aside.
Amid this crisis, Trudeau has reportedly attempted to recruit Mark Carney, the former head of the Bank of England and Bank of Canada, to join his cabinet. Carney, seen as a potential successor, has long been rumored to have political ambitions. However, LeBlanc’s appointment as finance minister suggests Carney may not enter Trudeau’s government anytime soon.
As Canada braces for potential economic turbulence driven by Trump’s trade threats, Trudeau’s leadership—and his ability to hold the Liberal Party together—will be tested like never before.
