It’s the end of the line one way or another for Canadian Prime Minister Justin Trudeau. He won’t survive this.
Trudeau’s Top Lieutenant Resigns Over Differences on Trump
The Washington Post reports Trudeau’s Top Lieutenant Resigns Over Differences on Trump
Justin Trudeau’s chief lieutenant throughout his tenure as Canada’s prime minister resigned from his cabinet on Monday, citing differences over how to confront President-elect Donald Trump’s “America First” economic nationalism, threatened tariffs and a possible trade war.
The abrupt resignation of Chrystia Freeland, who served the past four years as both finance minister and deputy prime minister, is the latest blow to the embattled Trudeau, whose popularity has nosedived over the past year. If federal elections were held today, polls project a wipeout for his Liberal Party.
In her resignation letter, posted on Freeland’s X account Monday morning, shortly before she was scheduled to deliver a fallfiscal and economicupdate to Parliament, Freeland said Trudeau told her that he no longer wanted her to serve as his finance minister and offered her another cabinet role.
“Upon reflection, I have concluded that the only honest and viable path is for me to resign from the Cabinet,” she said. “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.”
Freeland — a former journalist whom Trudeau named foreign minister in 2017 as part of a cabinet shuffle designed to prepare the government for the first Trump administration — said that for several weeks, she and Trudeau had been “at odds about the best path forward for Canada,” including on how best to respond to the “grave challenge” posed by the U.S. president-elect’s threatened tariffs of 25 percent on Canadian imports. Canada sends three-quarters of its exports to the United States, and economists project that such levies could plunge Canada into a recession.
“We need to take that threat extremely seriously,” Freeland said in her statement. “That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming 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.”
Several lawmakers on Monday appeared shocked by the resignation.
Freeland’s resignation injected fresh turmoil into Trudeau’s government. Several cabinet ministers have stepped down from their roles in recent weeks, saying that they do not plan to run in federal elections that must take place by next October. Housing Minister Sean Fraser also announced his resignation on Monday.
But few cabinet ministers have wielded as much influence or power in Trudeau’s government as Freeland, whom he entrusted with so many portfolios that commentators here nicknamed her the “Minister of Everything.” Some considered her Trudeau’s heir apparent.
She played a key role in the renegotiation of the North American Free Trade Agreement during the first Trump administration, drawing the ire of the then president — “we don’t like their representative very much,” Trump once said of her — but earning the respect of then-U.S. Trade Representative Robert E. Lighthizer.
Finance Minister Shocks Canada by Quitting
Bloomberg reports Finance Minister Shocks Canada by Quitting Amid Rift Over Fiscal Policy and Trump
Freeland has been the most powerful person serving under Trudeau for years and also held the title of deputy prime minister. After Donald Trump won the US presidential election, the prime minister appointed her to lead a cabinet group developing a strategy on how to respond to US policies.
She announced her exit in a social media post on Monday morning, saying in a letter to the prime minister that the two are “at odds about the best path forward for Canada.” She released it just hours before she was due to deliver a fiscal and economic update in parliament.
Trudeau has yet to name a replacement, but the Finance Department announced on Tuesday afternoon that the fiscal update would proceed. It was expected to be unveiled at approximately 4 p.m. Ottawa time, though it was not immediately clear who would introduce it in the House of Commons.
The Canadian dollar fell as low as C$1.4271 per US dollar, while bond yields jumped, taking the benchmark two-year note to 3.05% as of 11:58 a.m. Ottawa time. Conservative Leader Pierre Poilievre called for an election.
“This is a serious moment. It’s time for the government’s mandate to come to an end. This cannot go on,” Poilievre said.
The sudden departure of one of Trudeau’s most loyal ministers — someone who has held senior cabinet posts during the entire nine years of this government — is a staggering blow for a prime minister who has lost a number of senior officials in recent months. His Liberal Party is trailing the Conservative Party by about 20 points in recent public opinion polls, with an election due next year.
Freeland’s resignation letter talked about Trump’s “aggressive economic nationalism,” including his threat to impose 25% tariffs against goods from Canada and Mexico — a move that would be extremely harmful to Canada’s economy.
“Our country today faces a grave challenge,” Freeland wrote. “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. That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment.”
The phrase “political gimmicks” is likely a reference to the government’s announcement last month that it plans to implement a two-month sales-tax holiday on certain items, such as toys and Christmas trees, and send C$250 checks to millions of Canadians.
Canadian Polls
CTVNews reports Conservatives Still in Majority Territory
Nearly three weeks after the Liberals first announced their “tax break for all Canadians,” Pierre Poilievre’s Conservatives remain in comfortable majority territory, according to latest ballot tracking by Nanos Research. It shows the Conservatives at 42 per cent nationally, while the Liberals and the NDP are within the margin of error of each other at 23 per cent and 21 per cent, respectively.
The Liberals introduced their economic measures “thinking maybe it would change the numbers; however, the reality is that the Liberals have tried everything,” Nik Nanos, CTV News pollster and Nanos Research Chair said on the latest episode of Trend Line. “This is the latest thing and it’s obviously not working, and Pierre Poilievre and the Conservatives are just hammering away (at the Liberals) over and over again and probably just can’t wait for an election.”
If an election were to be held today, those projections show Poilievre would become prime minister with a majority Conservative government.
Five Reasons Why I’m Not Taking 25 Percent Tariffs Seriously
- For starters, tariffs would tend to strengthen the US dollar over the Canadian dollar. This would make US exports to Canada more expensive.
- Second, much US framing lumber comes from Canada. Tariffs would increase the cost of building a home in the US.
- Third, how much Fentanyl is really coming into the US from Canada? More likely it’s the other way around.
- Fourth, Canada is an ally and the United States’ third largest trading partner. It cannot do the US a damn bit of good to harm it’s third largest trading partner.
- Fifth, USMCA is a signed deal. It would take an act of Congress to break the deal. Trump could act alone, but that would damage faith in making any deals with the US.
Canada may be taking Trump seriously on tariff threats, but I am not.
Good Riddance to Trudeau
Canada cannot possibly get rid of Trudeau fast enough. The damage Trudeau has done to Canada is lasting and immense.
Those looking for a 5D chess play vs economic foolishness may wish to consider the possibility that Trump’s real goal all along was to hasten the demise of Trudeau.
If that was Trump’s real game, not tariff nonsense, then Trump may have succeeded.
Regardless, whatever goal Trump really had in mind, getting rid of Trudeau faster was either a success or a side benefit.
Collapse After Collapse
- The Canadian government won’t survive.
- The German government collapsed today.
- The French government collapsed earlier this year.
I did not expect to be writing about two government collapses today. But here we are.
German Government Collapses
Earlier today I commented The German Government Collapses, Early Elections Are Coming up
Chancellor Olaf Scholz lost a confidence vote on Monday leaving a deeply fragmented Germany in his wake.
Battle With Trump Looms
The German and French governments are both nonfunctional. This is a disaster on deck for the EU.
Because the US is the fastest growing economy, the dollar keeps getting stronger.
Currency wars are coming over spending, investments, and trade.