Canadian Finance Minister Chrystia Freeland has resigned from her post, citing differences with Prime Minister Justin Trudeau over how to respond to incoming President Donald Trump’s threat of tariffs.
He announced his resignation in a letter to Trudeau on Monday, saying the two were “at odds about the best way forward for Canada,” and Trump’s “aggressive economic nationalism.” pointed to a “serious challenge” posed by the policy. .
Freeland said the decision came after Trudeau told him last week he no longer wanted her to be his government’s top economic adviser.
Her resignation came hours before she was due to deliver the government’s annual fiscal update to Parliament.
In recent days, the two have also reportedly clashed over a policy that would have provided every eligible Canadian with a C$250 ($175; £139) check.
The BBC has contacted the Prime Minister’s Office and the Treasury Department for comment.
In his publicly shared resignation letter, Freeland said Canada needed to keep its “fiscal powder” dry to deal with the threat of massive tariffs from U.S. President-elect Donald Trump.
He added that this means “avoiding costly political maneuvers” that Canada cannot afford.
Trump has promised to impose A levy of 25% on imported Canadian goodsEconomists have warned that it will cause significant damage to the Canadian economy.
Referring to the tariffs, Freeland called them a “threat” that needed to be taken “very seriously.”
He added that this means “pushing back against ‘America First’ economic nationalism” and acting with unity in response to these tariff threats.
Freeland and Trudeau were reportedly at odds over a series of policies recently proposed by the prime minister designed to address the country’s cost-of-living crisis.
Among them is a C$250 check that the government wants to send to every Canadian earning less than C$150,000 a year. The checks were expected to cost the federal government a total of C$4.68bn.
Another is the temporary tax break on essential items during the holidays, which is expected to cost C$1.6bn in lost tax revenue.
Freeland’s office reportedly expressed concern about the cost of both 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 the C$250 checks were blocked after the New Democratic Party – the centre-left party in parliament – indicated it would Will not support this policy unless extended. .
A poll by The Angus Reid Institute showed that four out of five Canadians saw the check as a political move Designed to gain public goodwill as Trudeau’s popularity declines.
In response to Freeland’s ouster, opposition Conservative Party of Canada leader Pierre Poilever called for early federal elections.
“Everything is spiraling out of control. We can’t just go on like this,” he said, adding that his resignation comes at “the worst possible time”.
Freeland, who also holds the post of deputy prime minister, has long been one of Trudeau’s closest allies in his Liberal Party. She has held the key role of Canada’s finance minister since 2020, helping guide the country through the pandemic and its aftermath.
He replaces former finance minister Bill Morneau, who resigned amid a dispute with Trudeau over government spending policies as well as allegations of a conflict of interest related to a youth charity.
Other members of the Liberal Party cabinet have reacted to his resignation.
“These are difficult and deeply personal decisions and obviously he made that decision and I respect him for that,” said Patty Hajdo, Canada’s minister of indigenous relations.
Transport Minister Anita Anand described Freeland as a “good friend” and added: “This news has really hit me hard and I will reserve further comment until I 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”.
Finance Canada has indicated that despite Freeland’s resignation, the fall economic statement will be released as planned on Monday.
Canadian public broadcaster CBC, citing a senior federal government source, reported that Freeland’s decision to resign today was not expected.
Freeland said she plans to remain a Liberal member of parliament, and will run again in Canada’s upcoming election, which should be held on or before October.
His resignation came after another cabinet member, Housing Minister Sean Fraser, announced he would not seek re-election, saying he wanted to spend more time with his family.