
Canadian Prime Minister Justin Trudeau's government faced a major upheaval on Monday following the abrupt resignation of Finance Minister Chrystia Freeland. The surprise departure of one of Trudeau's closest allies has left his Liberal Party in disarray and triggered calls for his resignation, even from within his own ranks.
Freeland announced her decision through a scathing resignation letter, released on the same day she was scheduled to deliver an economic update. She cited irreconcilable differences with Trudeau regarding Canada's response to looming tariff threats from U.S. President-elect Donald Trump.
Freeland accused Trudeau of prioritizing "costly political gimmicks" over addressing the economic risks posed by Trump’s "aggressive economic nationalism." Trump, who will assume office in January, has promised a 25% tariff on Canadian imports unless stricter border security measures are implemented.
Economists warn that such tariffs could severely harm Canada’s economy.
Freeland also revealed that Trudeau informed her last week that she was no longer his preferred choice for top economic adviser, prompting her decision to step down. Her resignation blindsided the government, leaving the planned economic update in limbo for hours and amplifying instability in Trudeau's minority government.
Later that evening, Trudeau acknowledged the day’s turbulence without explicitly addressing Freeland's departure, telling Liberal Party donors in Ottawa: “It’s obviously been an eventful day. It has not been an easy day.”
### Opposition Mounts
Adding to Trudeau’s woes, the Liberal Party lost a by-election in British Columbia’s Cloverdale-Langley City riding to the rival Conservatives, marking their third by-election defeat this year.
Opposition leaders seized the moment to call for Trudeau’s resignation. Conservative leader Pierre Poilievre demanded a federal election, stating, “Everything is spiraling out of control. We simply cannot go on like this.”
Freeland, who also served as deputy prime minister, played a critical role during Trump’s first term in renegotiating the US-Canada-Mexico trade agreement, a process she described as stressful and overwhelming.
Chris Sands, director of the Wilson Center’s Canada Institute, noted that Freeland's exit exacerbates perceptions of instability in Canada’s leadership. "Trudeau finds himself a little bit alone, not super close to any of his ministers, with the big, talented ones mostly now having left," Sands said.
### Divisions Over Trump
Freeland’s resignation highlights a broader divide within Canada and among U.S. allies over how to respond to Trump’s return to power. Trudeau has sought to maintain open channels with Trump, including a recent visit to Mar-a-Lago, but Freeland reportedly aligned more closely with Mexico’s confrontational stance toward the president-elect’s trade threats.
With the Liberal Party in turmoil and opposition leaders united in their demand for change, Trudeau faces an uphill battle to maintain control of his government amid mounting political and economic uncertainty.