Canada’s finance minister resigns over Trump tariff spat with Trudeau

Canada’s Finance Minister Chrystia Freeland has resigned from her post, citing disagreements with Prime Minister Justin Trudeau over how to respond to President-elect Donald Trump’s threat of tariffs.

She announced her departure in a letter to Trudeau on Monday, saying the two have been “at odds over the best path forward for Canada” and pointing to the “serious challenge” posed by Trump’s policies of “aggressive economic nationalism” constitute. .

Freeland said the decision comes after Trudeau informed her last week that he no longer wanted her to be his government’s top economic adviser.

Her resignation came just hours before she was due to give an annual fiscal policy update in parliament.

In recent days, the two have also reportedly been at loggerheads over a policy that would have delivered a C$250 ($175; £139) check to every eligible Canadian.

The BBC has contacted the Prime Minister’s Office and the Treasury for comment.

In his publicly shared resignation letter, Freeland said Canada needs to keep its “tax powder dry” to deal with the threat of sweeping tariffs from incoming U.S. President Donald Trump.

She added that this means “avoiding expensive political gimmicks” that Canada cannot afford.

Trump has promised to impose a 25% tax on imported Canadian goodswhich economists have warned would significantly harm Canada’s economy.

Referring to the tariffs, Freeland called them a “threat” that must be taken “extremely seriously.”

She added that this means “pushing back against ‘America First’ economic nationalism” and working with unity in response to these tariff threats.

Freeland and Trudeau reportedly disagreed on a number of recently proposed policies by the prime minister designed to address the country’s cost-of-living crisis.

Among them is a C$250 check that the government wanted to send to every Canadian earning less than C$150,000 annually. These controls were expected to cost the federal government a total of C$4.68 billion.

Another is a temporary tax break on essential items during the holidays, which is expected to cost C$1.6 billion. in lost tax revenue.

Freeland’s office had reportedly been concerned about the cost of these two policies, saying they are economically unwise at a time when the nation’s deficit is growing.

The tax holiday has since been approved in the House of Commons, but C$250 checks hit a roadblock when the New Democratic Party — a center-left party in parliament — signaled it would not support the policy unless it is expanded .

A vote of The Angus Reid Institute found that four out of five Canadians viewed the checks as a political move designed to win public goodwill as Trudeau’s popularity plummets.

In response to Freeland’s exit, Pierre Poilievre, leader of the opposition Conservative Party of Canada, called for a federal election as soon as possible.

“Everything is spiraling out of control. We simply cannot continue like this,” he said, adding that her resignation comes “at the very worst time”.

Freeland, who also holds the position of deputy prime minister, has long been one of Trudeau’s closest allies within his Liberal Party. She has held the key role of Canada’s finance minister since 2020 and has helped guide the country through the pandemic and its aftermath.

She replaced former Finance Minister Bill Morneau, who also resigned amid a dispute with Trudeau over government spending policy, as well as allegations of a conflict of interest he faced involving a youth charity.

Other members of the Liberal cabinet have since reacted to her resignation.

“These are difficult and deeply personal decisions and obviously she’s made that decision and I respect her for that,” said Patty Hajdu, Canada’s Indigenous Relations Minister.

Transport Minister Anita Anand described Freeland as a “good friend” and added: “This news has hit me really hard and I will reserve further comment until I have time to process it.”

In a statement, the Business Council of Canada called Freeland’s resignation “deeply troubling” and said the concerns she raises call into question “whose interests the federal government is looking out for.”

The Department of Finance Canada has indicated that the fall economic statement will be delivered on Monday as planned, despite Freeland’s resignation.

Canada’s public broadcaster CBC reported that Freeland’s decision to quit was not expected today, citing a senior federal government source.

Freeland said she intends to remain as a Liberal member of parliament and will seek re-election in Canada’s upcoming election, which should be held in October or before.

Her resignation comes after another cabinet member, Housing Minister Sean Fraser, announced he will not seek re-election, saying he wants to spend more time with his family.