Canada’s Deputy Prime Minister and Minister of Finance, Chrystia Freeland has resigned amid growing tensions with the Prime Minister, Justin Trudeau, over the looming threat posed by Donald Trump’s “America First” economic nationalism.

Freeland stood down on Monday, December 16, 2024, just hours before she was due to release the country’s first economic plan ahead of the change of administration in Washington.

The move stunned the country, left Trudeau without a key cabinet ally – and raised fresh doubts over his political survival.

Political observers were closely reading the resignation letter by Freeland, who has previously served as Foreign Affairs Minister and was once a journalist – and is seen as a ready replacement for Trudeau, who is facing growing pressure to resign.

Relations between Canada and the US have been upended by Trump’s pledge last month to slap a 25% levy on all Canadian goods and services.

Freeland in a letter she submitted to the Prime Minister that was published on social media platforms, noted, “For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada.”

“Our country today faces a grave challenge. The incoming administration in the United States is pursuing a policy of aggressive economic nationalism, including a threat of 25% tariffs. We need to take that threat extremely seriously.

“Inevitably, our time in government will come to an end. But how we deal with the threat our country currently faces will define us for a generation, and perhaps longer.”
Chrystia Freeland

Freeland further outlined that Canada needs to keep its “fiscal powder dry today” so that they have the reserves for a “coming tariff war.”

She warned Trudeau that “costly political gimmicks” need to be done away with as they can make Canadians doubt whether the government understands the “gravity of the moment.”

“That means pushing back against ‘America First’ economic nationalism with a determined effort to fight for capital and investment and the jobs they bring. That means working in good faith and humility with the Premiers of the provinces and territories of our great and diverse country, and building a true Team Canada response.”
Chrystia Freeland

Freeland and Trudeau have reportedly disagreed over proposals for for temporary tax breaks and other spending measures, which were meant to shore up political support, but risked forcing Freeland to miss her spending goals.

The letter comes amid continuing uncertainty in Canada over the potential impact of US tariffs, which Trump said would be imposed on Canada, Mexico and China, unless they take action against drug and human smuggling.

Freeland’s sudden resignation and repudiation of Trudeau’s approach to Trump comes as the prime minister’s popularity has all but evaporated.

Freeland had been set to announce the government’s delayed fall economic statement on Monday, which was anticipated to include details of increased enforcement at the US-Canada border.

She had also said that the plan would outline policies to incentivize and keep business development and investment in Canada.

When the statement will be delivered, and who will deliver it, is now unclear.

Freeland’s Resignation Deemed As Trudeau’s Rebuke

Éric Grenier, a Political Analyst at the Writ, said that Freeland’s resignation was a “clear rebuke of the Prime Minister.”

“Freeland was one of Trudeau’s first recruits when he became leader back in in 2013. She’s always seemed to be a pretty loyal member of cabinet.

“[The resignation] is pretty surprising and pretty important. You don’t often see this in Canadian politics,” he said. “It definitely shows there are lots of problems right now with the government.”
Éric Grenier

The resignation also appeared to catch other government officials off-guard.

Transport Minister, Anita Anand said, “This news has hit me really hard and I’ll reserve further comment until I have time to process it.”