Cabinet Shock in Ottawa: Chrystia Freeland Resigns as Finance Minister

A surprise for the Canadian political landscape: Chrystia Freeland, Canada's Finance Minister and Deputy Prime Minister, has submitted her resignation following tensions with Prime Minister Justin Trudeau. The dispute centered around handling potential U.S. tariffs and Trudeau's increased spending policy, which Freeland dismissed as a political maneuver that could jeopardize Ottawa's ability to deal with the 25% import tariffs announced by U.S. President-elect Donald Trump. The resignation came just hours before Freeland was to present a fall economic update in Parliament, which was expected to involve a larger budget deficit for 2023/24. Despite Freeland's departure, the document will be presented as planned, according to government officials. Trudeau's government loses a key ally in an already tense situation with Freeland's departure. Nik Nanos, founder of the Nanos Research polling firm, commented that this could likely trigger a leadership crisis within the Liberal Party. Freeland had been Finance Minister since August 2020 and had overseen significant events in that role. In the financial market, yields on Canadian 10-year bonds climbed to their highest level since November 28, while the Canadian dollar fell to a four-and-a-half-year low before stabilizing, reflecting the uncertainty that the political shift brings. In an open letter to Trudeau, Freeland highlighted the threat of new U.S. tariffs and called for a restrained fiscal policy. Internal proposals for temporary tax breaks and other spending measures also led to disagreements between Freeland and Trudeau. Noteworthy in her resignation statement was the clear criticism, a rarity in Canadian political culture.