Canadians might not be feeling quite so superior about dysfunctional American politics after watching this week’s fiasco in Ottawa unfold like an episode of “Veep.” The resignation on Monday of Chrystia Freeland, Canada’s finance minister and deputy prime minister, sparked the most chaotic day in Canadian politics in decades.
Freeland was due to deliver a mini-budget known as the fall economic statement at 4 p.m. Yet, at 9 a.m., the finance minister rocked the Canadian capital when she revealed she was quitting the Cabinet, disbanding the double act that has led Canada for much of the past nine years.
In a searing resignation letter, Prime Minister JustinTrudeau’s chief lieutenant and ally said that the country faces a grave challenge, with the incoming Trump administration threatening 25% tariffs on all Canadian exports to the US.
She said Canada needs to keep its fiscal powder dry and not spend it on “costly political gimmicks,” referring to the sales tax holiday and US$175 per person thinly veiled electoral bribe that Trudeau promised — against the better judgment of his finance minister and her department.
Most damaging of all, Freeland crystallized the nagging sense, felt by many people, that Trudeau is more focused on his own future than on that of everyday Canadians.
“They know when we are working for them, and they equally know when we are focused on ourselves,” she said.
Coming from someone who has worked so closely with the prime minister, it was devastating stuff, and it has left Trudeau badly wounded — perhaps fatally — as other dissidents in the ruling Liberal Cabinet and caucus consider their next move. One Liberal member of Parliament said between 40 and 50 of 153 caucus members actively want Trudeau to resign, a feeling that was strengthened after the party was trounced in a by-election in British Columbia on Monday.
Trudeau said he will take the Christmas break to consider his options, which appear limited. The left-leaning New Democratic Party has helped prop up the minority Liberal government, but its leader, Jagmeet Singh, has also called for the prime minister to resign.
When Parliament resumes in late January, Pierre Poilievre’s Conservative Party will seek to table a vote of no confidence in the government at the first opportunity, and it looks like it will have the votes in the House of Commons to send Canada to its 45th general election.
Freeland’s bombshell was designed to cause Trudeau maximum inconvenience.
Finance officials were forced to put the mini-budget on hold until they could determine who should deliver it.
Poilievre stood in the House of Commons during the daily question period and asked, “A question for the finance minister: Who are you?”
The government’s own order of precedence suggested the industry minister, François-Philippe Champagne, would assume the duties of finance minister, but he was unaware of that reality when confronted by journalists and is said to have refused to read out a document he had no role in drafting. The next person in line, Randy Boissonnault, was forced to resign from the Cabinet last month, adding to the tragicomic mood.
By the day’s end, Trudeau had persuaded the public safety minister, Dominic LeBlanc, to assume the role of finance minister, and he was sworn in in time to table the fall economic statement in the House of Commons.
It all felt like governing by improv, led by a prime minister in office but not in control. Nobody seems to have been more surprised than Trudeau by Freeland’s resignation, but he really should not have been. In her letter, Freeland said the prime minister told her last Friday that he no longer wanted her to serve as finance minister and offered her another position.
It has since been reported that in an hourlong Zoom call, he told her that she would be replaced as finance minister by former central banker Mark Carney; he asked her to be the point person for Canada-US relations but not as the minister of global affairs, a job held by Mélanie Joly. (Carney has not commented on his intentions, nor has he been named as Freeland’s successor.)
It is perhaps just as well for Canada that Freeland declined and offered her resignation.
The now-former finance minister is not popular with the incoming US president, a point Donald Trump made in a provocative post on social media late on Monday.
“The Great State of Canada is stunned as the finance minister resigns, or was fired, from her position by Governor Justin Trudeau. Her behavior was totally toxic, and not at all conducive to making deals which are good for the very unhappy citizens of Canada. She will not be missed!!!,” Trump wrote.
Freeland attracted the president-elect’s ire during his first term in office, when she appeared on a panel at a summit in Toronto called “Taking on the Tyrant,” against a backdrop of a rogue’s gallery of autocrats, including Vladimir Putin, Recep Tayyip Erdogan, Bashar al-Assad and … Trump.
The then-president subsequently said, “We don’t like their representative [Freeland] very much.”
Trump’s reelection has proven to be the catalyst for the crisis that has hit the Canadian government. Trudeau and Freeland were simpatico for much of the government’s nine years in power — a free-spending Thelma and Louise, intent on pioneering feminist and social justice policies, even if they risked driving off a fiscal cliff (Canada’s debt has doubled under Trudeau).
But Trump’s threat of tariffs and his repeated references to Canada as the “51st state” have created existential panic in a country that sends three-quarters of its exports south of the border.
Trudeau and LeBlanc headed to Mar-a-Lago resort to pay tribute to the president-elect, only to be humiliated when it was leaked that Trump had said Trudeau could be governor if Canada joined the US as a state. If it was a joke, Canada isn’t laughing.
Trudeau has proven to be very New Testament in his approach to Trump, turning the other cheek, even while promising to retaliate to tariffs if necessary. More aggressive leadership has been assumed by a Trump-like, Old Testament, eye-for-an-eye politician, Ontario Premier Doug Ford. He has said that if Trump imposes sweeping tariffs, his province will suspend electricity exports to several northern states and block American alcohol sales to the Liquor Control Board of Ontario, the world’s largest alcohol purchaser.
Trump was at it again on Tuesday evening, saying “many” Canadians want Canada to become the 51st state because they would save on taxes. “I think it’s a great idea,” he said. His former security adviser John Bolton told the CBC that Canadians shouldn’t over-intellectualize the tweets. “I think he’s just mean” and is trying to humiliate Trudeau, Bolton said.
From Canada’s point of view, the most encouraging thing about the social media post Trump made after Freeland’s resignation was his mention that there may be a deal to be had. The president-elect has made clear his belief in tariffs, what he calls “the most beautiful word in the dictionary.”
He believes that the US is “subsidizing” Canada because it has a trade deficit that is largely the result of oil prices that have doubled in the past four years (60% of US crude imports come from north of the border). But the president-elect can’t ignore the belief held by two-thirds of Americans that his tariff plan will add to the rising cost of living.
Trump’s other concern is over porous borders in the north and south that are leaking migrants and fentanyl. However, as Canada’s ambassador in Washington, Kristen Hillman, pointed out, the 24,000 illegal migrants and 43 pounds of fentanyl intercepted at the northern border represent 0.6% and 0.2%, respectively, of the totals. Ottawa allocated an additional US$900 million for a “comprehensive” border security package in Monday’s fiscal update.
Canada has also indicated its willingness to be deputized in the trade war against China. The federal government said it will bring in more tariffs on Chinese solar products, critical minerals, semiconductors, and natural graphite, having already imposed 100% duties on Chinese electric vehicles and a 25% levy on steel and aluminum.
But it may be down to Ford and other provincial premiers like Alberta’s Danielle Smith to secure exemptions from the blanket tariffs Trump has promised.
It looks very likely that around the time Trump takes office, the ruling Liberal Party will be either embroiled in a messy leadership race or fighting a general election. In that case, the odds are that Trudeau, if he is still on the scene, will be too distracted to be an effective captain of Team Canada.