Good morning. We’re unpacking Chrystia Freeland’s sudden resignation as Finance Minister – which sent shock waves through Ottawa – along with the collapse of Germany’s government and the return (for now) of the mail. Let’s get straight into it.
Chrystia Freeland at the announcement of the GST holiday.Chris Young/The Canadian Press
Federal politics
A government in chaos
Well, that was dramatic: Yesterday morning, just hours before she was meant to deliver the government’s fall economic statement, Chrystia Freeland abruptly resigned as Finance Minister. For months, there have been rumours of discord between Freeland and Prime Minister Justin Trudeau; last week, The Globe reported she wasn’t exactly on board with her boss’s much-hyped GST holiday and $250 cheques, projected to run up a bill of $6.28-billion. On Friday, the Prime Minister told Freeland over Zoom that he no longer wanted her as his top economic adviser, but maybe she could tackle U.S.-Canada relations from inside the cabinet instead.
The move struck Freeland as a demotion, one source told The Globe. She wasn’t interested. “The only honest and viable path for me is to resign,” she wrote in her letter to Trudeau, which she swiftly posted to social media (in both official languages). “For the past number of weeks, you and I have found ourselves at odds over the best path forward for Canada,” Freeland added, citing the looming threat of U.S. president-elect Donald Trump’s economic nationalism. Then she took a swipe at the “costly political gimmicks” making Canadians wonder if the government recognizes “the gravity of the moment.”
Freeland becomes the ninth minister since July to quit the cabinet or decline to seek re-election. (She stepped on Sean Fraser’s toes a bit; the Housing Minister announced yesterday he was leaving politics.) That’s by far the largest exodus of ministers in Trudeau’s nine years in power.
The resignation
When Freeland’s predecessor in Finance, Bill Morneau, quit suddenly in 2020 – amid similar rumours of fiscal tension and Trudeau’s plummeting confidence – he chose diplomacy in his announcement. Morneau told reporters he never planned to run in more than two elections, and that it was appropriate to step down so that the “Prime Minister has, by his side, a finance minister who has that longer-term vision.”
Freeland opted for a mic drop. In her resignation letter, she suggested Trudeau wasn’t credibly responding to the challenges posed by Trump – particularly his promise to slap 25-per-cent tariffs on all goods from Canada. “We need to take that threat extremely seriously,” Freeland wrote. That means “keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war.” It also means avoiding those aforementioned gimmicks that “we can ill afford.” Canadians know when the government is working for them, she continued, “and they equally know when we are focused on ourselves.”
Freeland then went ahead and acknowledged what polls have said about the Liberals for more than a year: “Inevitably, our time in government will come to an end.” Conservative Leader Pierre Poilievre would like to hasten that along, convening a news conference yesterday to urge the NDP to join the rest of the opposition in a non-confidence vote. NDP leader Jagmeet Singh called on Trudeau to resign but did not indicate if he’d help defeat the minority Liberal government.
What now?
Freeland is adamant that she won’t be leaving politics: Her resignation letter said she’ll continue on as a Liberal Member of Parliament and will run again for her Toronto seat in the next federal election. It doesn’t sound like Mark Carney, whom Trudeau has long courted, could be tempted to take a cabinet role: Two sources close to the former central banker strongly suggested that he will not accept the Prime Minister’s offer to join the government. Instead, Public Safety Minister and long-time Trudeau ally Dominic LeBlanc – who joined the Canadian contingent at their Mar-a-Lago dinner with Trump last month – stepped into the finance post in a hastily organized ceremony at Rideau Hall yesterday.
Trudeau congratulates LeBlanc after he was sworn in as Finance Minister.Justin Tang/The Canadian Press
LeBlanc inherits a government spending plan that blew past its self-imposed deficit cap by more than $20-billion, landing at nearly $62-billion for the fiscal year ending on March 31. Those $250 cheques are now off the table, due to a lack of support from the NDP. But Ottawa is planning to inject $1.3-billion into beefing up Canada’s border security, alongside an extra $363-million in affordable housing and $598-million to buy back guns.
House Leader Karina Gould was tapped to table the fall economic statement, though she chose to forgo the traditional speech. Trudeau attended an emergency meeting of the Liberal caucus last night, but did not speak to reporters waiting outside his motorcade. Freeland let her resignation letter say it all.
More (so much more) from The Globe
- Robyn Urback writes that Chrystia Freeland’s years of loyalty culminate in a humiliating and tragic end.
- Andrew Willis argues that Freeland finally says what Trudeau needs to hear as she exits the cabinet.
- Campbell Clark says Freeland’s grenade brings crisis on top of crisis to a flailing Trudeau government.
- John Ibbitson writes that Freeland’s political estrangement from Trudeau is both shocking and understandable.
- Tony Keller says the country isn’t bankrupt – but Trudeau’s government is completely spent.
- Senior political reporter Marieke Walsh speaks with The Decibel about a chaotic day on Parliament Hill.
The Shot
Very good gifts for very good boys (and girls)
Desi sports some spiffy weather-proof boots.The Globe and Mail
You’ve got one week left to tackle your holiday shopping – and that includes gifts for any four-legged friends. The Globe has rounded up the finest treats, toys and gear, modelled by a few of the Toronto Humane Society’s most adorable (and adoptable!) rescue animals.
The Wrap
What else we’re following
At home: Canada Post says mail will start moving today after workers were ordered back on the job – but Canadians should expect delays into the new year.
Abroad: After the collapse of his coalition government, German Chancellor Olaf Scholz lost a confidence vote yesterday, paving the way for an early election at a turbulent time for Europe.
Weighing in: Holding court with reporters for the first time since he won the election, Donald Trump mused on embattled New York Mayor Eric Adams and the mysterious drone sightings over New Jersey. Meanwhile, a judge denied Trump’s bid to have his hush-money conviction thrown out.
Cashing in: With corporate insolvencies quickly climbing, Bay Street’s bankruptcy advisers are profiting from economic pain – to the tune of $1,300 an hour.