Trudeau’s top cabinet ally resigns over differences in how Canada should respond to Trump

TORONTO - 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 fall fiscal and economic update 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.”

Freeland did not elaborate on what she considered to be “costly political gimmicks.” But last week, the Globe and Mail reported on a growing rift between the Finance Department and the prime minister’s office over a sales-tax exemption that took effect at the weekend, as well as plans to send $250 rebate checks to some Canadians.

Some political analysts called the move a last-ditch effort to win back voters. The Globe and Mail reported that Finance Department officials opposed such spending because it would jeopardize Freeland’s pledge to keep the deficit capped at no more than $40.1 billion. She was expected to miss that target in the fiscal update Monday.

Freeland said in her resignation letter that Canada can deal with the threat posed by Trump’s tariffs if it is “strong, smart and united.”

“It is this conviction which has driven my strenuous efforts this fall to manage our spending in ways that will give us the flexibility we will need to meet the serious challenges presented by the United States,” she said.

Several lawmakers on Monday appeared shocked by the resignation.

“Chrystia Freeland is a good friend,” Transport Minister Anita Anand told reporters in Ottawa. “This news has hit me really hard, and I’ll reserve further comment until I’ve had time to process it.”

Critics said the resignation was a signal that Trudeau should step down, too.

“When the general is losing his most loyal soldiers on the eve of a [tariff] war, the country desperately needs a new general,” former justice minister Jody Wilson-Raybould said in a post on X. She resigned from her cabinet post in 2019 amid her own conflict with the prime minister.

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.

Foreign Policy magazine named her Diplomat of the Year in 2018.

A year later, Trudeau named Freeland his deputy prime minister and tasked the Alberta native with helping to bridge divisions with Canada’s restive Western provinces. When the coronavirus pandemic hit in 2020, Trudeau tapped Freeland to be his point person on Canada’s response.

After Trump’s election in November, Trudeau revived a cabinet committee on U.S.-Canada relations and put her in charge. But when the prime minister jetted off to Mar-a-Lago last month to dine with Trump and attempt to dissuade him from imposing tariffs on Canada - entreaties that have thus far failed to push the president-elect to reverse course - he did not take Freeland with him.

The Trudeau government earlier this year announced the revival of a so-called Team Canada approach to prepare for the U.S. election, dispatching several high-profile officials across the United States to build relationships with U.S. lawmakers, business leaders and people close to Trump to stave off policies that could harm Canadian interests.

But since Trump’s victory in November, cracks have emerged in Team Canada. Conservative Party leader Pierre Poilievre, who has long blamed Trudeau for many ills facing Canada, has not appeared eager to support the prime minister’s efforts to defend the country against the protectionist whims of the mercurial president-elect.

After Trump threatened to impose 25 percent tariffs on imports because of what he calls an “invasion” of fentanyl and migrants from Canada into the United States - a claim for which there is little evidence - several provincial premiers suggested that Trump had a point and blamed Trudeau for not tightening the border.

Political leaders here have been divided on the best way to respond to the tariffs, including on whether to impose retaliatory levies.

Ontario Premier Doug Ford has threatened to terminate energy exports to the United States - Canada’s largest trading partner - a move that Quebec Premier François Legault and Alberta Premier Danielle Smith have opposed. Saskatchewan Premier Scott Moe has urged Trudeau not to consider imposing export taxes on commodities such as uranium and potash.