Canada’s Finance Minister Chrystia Freeland Resigns Over Dispute with Trudeau on Trump’s Tariff Threats

Chrystia Freeland Canada’s Finance Minister and Deputy Prime Minister, has resigned amid disagreements with Prime Minister Justin Trudeau over how to address the looming tariff threats posed by incoming U.S. President Donald Trump. In her resignation letter, released on Monday, Freeland highlighted differences on economic strategies to counter Trump’s “aggressive economic nationalism,” which she described as a “grave challenge” to Canada’s economy.
Freeland’s resignation came just hours before she was set to present Canada’s annual fiscal update in parliament. She emphasized the urgent need for Canada to prepare for Trump’s proposed 25% tariffs on Canadian imports, which economists warn could have significant repercussions.
Policy Clashes and Fiscal Concerns
Freeland’s decision to step down follows Trudeau’s removal of her as the government’s chief economic adviser, reportedly due to disagreements over spending policies. A key point of contention was a proposal to provide a one-time payment of C$250 ($175; £139) to Canadians earning less than C$150,000 annually. While aimed at addressing the rising cost of living, the measure would cost the government an estimated C$4.68 billion.
In her resignation letter, Freeland criticized the policy as a “costly political gimmick” and stressed the importance of maintaining fiscal discipline. She also opposed a temporary holiday-season tax break on essential goods, which would reduce government revenue by C$1.6 billion.
The cheque proposal has faced pushback in parliament, with the New Democratic Party (NDP) demanding broader eligibility as a condition for support. Public opinion has also been lukewarm, with an Angus Reid Institute poll revealing that most Canadians see the payment as a political move to bolster Trudeau’s declining popularity.
Freeland’s Tenure and Impact
Freeland, a prominent figure in Trudeau’s Liberal Party, served as Finance Minister since 2020, succeeding Bill Morneau after his resignation over spending disputes and ethics concerns. She played a key role in steering Canada through the economic challenges of the COVID-19 pandemic and its aftermath.
In her resignation, Freeland emphasized the need for unity and resolve in countering Trump’s trade policies. “Canada must keep its fiscal powder dry to effectively respond to these threats,” she wrote, warning against measures that could weaken the country’s economic resilience.
Her departure has drawn reactions from colleagues, including Indigenous Relations Minister Patty Hajdu, who called it a “deeply personal decision,” and Transport Minister Anita Anand, who described Freeland as a “good friend” and expressed her sadness over the resignation.
Challenges Ahead for Trudeau’s Government
Freeland’s resignation follows another high-profile exit from Trudeau’s cabinet, with Housing Minister Sean Fraser recently announcing he would not seek re-election to focus on his family. These developments come as Trudeau’s administration faces growing criticism over its economic policies and declining public support.
Canada’s next federal election is due by October, and Freeland confirmed she will remain a Liberal member of parliament and intends to run again. Meanwhile, the finance ministry is reassessing plans for the fall economic update following her resignation.
Freeland’s exit underscores deepening tensions within Trudeau’s government as it navigates both domestic challenges and the external economic pressures stemming from Trump’s trade policies.