Deputy Prime Minister Chrystia Freeland resigned due to disagreements with Prime Minister Justin Trudeau over handling escalating trade tensions with the U.S. amid Trump’s tariff threats. Following her departure, Dominic LeBlanc took over her role as Canada revealed a larger-than-expected budget deficit. The political landscape appears unstable, with pressure mounting on Trudeau as he faces criticism and potential early elections, alongside concerns about retaliatory measures from provincial leaders in response to U.S. tariffs.
The ongoing tariff threats from Donald Trump are sending ripples through Canada’s political landscape. On Monday morning, Deputy Prime Minister Chrystia Freeland announced her unexpected resignation, citing fundamental disagreements with Prime Minister Justin Trudeau regarding the management of the escalating economic tensions with the United States.
In her resignation letter, which she shared on X, Freeland expressed, “We found ourselves at odds on the best way forward for Canada,” emphasizing the significant challenges the nation is currently facing.
Trump’s proposal to impose a 25% tariff on Canadian imports has created a substantial shockwave, particularly since the U.S. is Canada’s largest trading partner, representing 75% of its exports.
Freeland warned against a potential ‘tariff war,’ arguing that Canada cannot afford to engage in costly political maneuvers, likely referencing the recent tax cuts implemented by the Trudeau administration.
A long-standing member of Trudeau’s inner circle and once a top contender to succeed him, Freeland, 56, has held various ministerial roles since the Liberal Party rose to power in 2015. From 2015 to 2017, she served as Minister of International Trade, playing a pivotal role in the successful negotiation of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). Subsequently, she became Minister of Foreign Affairs from 2017 to 2019 before taking on the dual roles of Deputy Prime Minister and Minister of Finance, making history as the first woman to do so.
Later that day, Dominic LeBlanc stepped into the role of Deputy Prime Minister, as Canada revealed a budget deficit of 22 billion Canadian dollars (15 billion euros) higher than anticipated, reaching a total of 62 billion due to unforeseen expenditures.
LeBlanc will now tackle negotiations with the Trump administration, pledging to address this significant challenge. On the same day, Canada announced plans for 1.3 billion Canadian dollars in investments aimed at enhancing border security.
Throughout the day, Prime Minister Justin Trudeau remained silent on the developments but acknowledged at an evening event for party donors in Ottawa that it had been “not an easy day.”
While some media outlets reported that Trudeau was contemplating his resignation, his office firmly denied these claims, labeling them as “absolutely inaccurate.”
In response to Freeland’s departure, Trump remarked, “She will not be missed!!!” adding that her “toxic behavior” was detrimental to negotiating favorable deals for Canadians, as he expressed on his Truth Social platform.
The Fallout of Leadership Changes
In late November, Trudeau made an unexpected trip to Florida to meet with Trump and discuss customs issues. Since that meeting, he has been conducting numerous discussions, particularly with provincial leaders who are increasingly alarmed by the American threats.
Doug Ford, the Premier of Ontario, indicated last week that the province might retaliate by halting all electricity exports to the United States.
However, there has been no indication that Trump is willing to revise his stance on tariffs.
In this already tense atmosphere, Freeland’s resignation—following the departure of Housing Minister Sean Fraser for “family reasons” on the same day—adds to the mounting challenges facing Trudeau, who is grappling with a government that appears increasingly unstable.
Pierre Poilievre, the leader of the Conservative Party, reacted strongly, stating at a press conference, “Justin Trudeau has lost control, but he clings to power.”
As Trudeau prepares to run again in the upcoming months, he is already facing considerable pressure from recent political setbacks.
“This is a total disaster,” remarked Lori Turnbull, a political science professor at Dalhousie University. “The government is in shock and panic. I think it is becoming much more difficult for Mr. Trudeau to retain his position as Prime Minister, as he is losing legitimacy.”
The next federal elections are scheduled for no later than October 20, 2025, but many analysts speculate that the current government may struggle to survive until then, potentially leading to early elections.