Canada’s Finance Minister Freeland Steps Down Over Clashes with Trudeau on Trump Tariff Response

Canada’s Finance Minister, Chrystia Freeland, has tendered her resignation due to policy disagreements with Prime Minister Justin Trudeau regarding the response to President-elect Donald Trump’s proposed tariffs.

Freeland submitted her resignation in a letter to Trudeau on Monday, citing fundamental differences in their approach to addressing Trump’s “aggressive economic nationalism,” which she described as a “grave challenge.”

The resignation follows Trudeau’s recent decision to relieve her of her duties as the government’s chief economic adviser. The announcement came just hours before Freeland was scheduled to deliver the annual fiscal update in parliament.

Reports indicate that Freeland and Trudeau had clashed over a proposed policy to issue a C$250 ($175; £139) cheque to every eligible Canadian.

In her resignation letter, made public, Freeland stressed the importance of maintaining fiscal discipline to counter Trump’s tariff threats, which she labelled as a serious economic risk. She criticised “costly political gimmicks” and urged for a united stance against “America First” economic policies.

Trump’s proposed 25% levy on Canadian imports poses a significant threat to Canada’s economy, according to economists. Freeland emphasised the need to seriously address these threats and called for unity in response.

Freeland and Trudeau had reportedly disagreed over new policies aimed at addressing the cost-of-living crisis, including the C$250 cheques and a temporary tax break on essential items during the holidays, which would cost the federal government billions.

Concerns about the economic impact of these policies were raised by Freeland’s office, especially in light of Canada’s growing deficit. While the tax holiday was approved, the cheque policy faced opposition from the New Democratic Party, demanding its expansion.

A poll by the Angus Reid Institute indicated that the majority of Canadians viewed the cheque policy as a political move to boost Trudeau’s declining popularity.

Freeland, who also served as Deputy Prime Minister, has been a key ally of Trudeau within the Liberal Party, steering the country through the pandemic as Finance Minister since 2020. She succeeded Bill Morneau, who resigned amid a spending policy dispute and conflict-of-interest allegations.

Reactions from Liberal Party cabinet members to Freeland’s resignation were supportive, acknowledging the difficulty of her decision.

The delivery of the fall economic statement is now uncertain. A government official told Reuters that the finance ministry is considering the next steps.

Freeland announced her intention to remain a Liberal MP and to run in the upcoming federal election, scheduled for no later than October. Her resignation follows Housing Minister Sean Fraser’s decision not to seek re-election, citing family commitments.

Frances Ibiefo

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