Who saw Chrystia Freeland pulling a gun, after Justin Trudeau unsheathed a knife?
The finance minister is an unlikely champion of the Chicago Way, but she has just pulled off a coup that may end up toppling this government.
Just hours before she was due to give her fall economic statement, she quit.
Despite the widespread media speculation about a falling out between Freeland and Trudeau, it’s a good bet that no one was more surprised at the finance minister’s gangster move than the prime minister.
Her resignation letter was savage. She said that on Friday, Trudeau had told her he no longer wanted her as finance minister and offered her another job in cabinet.
She said that she concluded she had no option but to resign because she had lost the prime minister’s confidence.
Full text: Read Chrystia Freeland’s resignation letter sent to Justin Trudeau
The casus belli was the multi-billion-dollar affordability package that included a two-month GST holiday and mailing $250 cheques to nearly 19 million working Canadians.
As the National Post reported late Sunday, Freeland had already reversed the government’s position on the rebate cheques that would have cost an estimated $4.68 billion. One person with knowledge of the plans said that the measure will not be in the fiscal update but the government hopes to take another look in the new year, if it can find another party to support it.
In her letter, Freeland acknowledged that for the past few weeks she has been at odds with Trudeau over the best way forward for Canada, in the face of the challenge of the incoming Trump administration and the threat of 25 per cent tariffs.
“We need to take that threat extremely seriously. That means keeping our fiscal powder dry, so that we have reserves we may need for the coming tariff war. That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment,” she wrote.
She said that the government’s response to Trump’s America First agenda must be to fight for capital and investment, and to build a true Team Canada response.
“I know Canadians would recognize and respect such an approach. They know when we are working for them and they equally know when we are focused on ourselves. 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,” she said.
The implication is that Trudeau is putting the Liberal Party and his own re-election prospects ahead of the national interest.
The government’s plan was to send $250 cheques to the 18.7 million Canadians who worked in 2023 and earned less than $150,000, but it has not been able to get the measure through Parliament.
While the GST holiday received the backing of the NDP, Jagmeet Singh was clear that his party would withhold support for the rebate cheques unless seniors, people with disabilities and injured workers were included. The Bloc Québécois adopted a similar approach. An expanded rebate could have added another $2 billion to the cost.
The removal of the commitment to spend nearly $5 billion on a measure the Finance department did not believe made financial sense was a victory of sorts for Freeland. But it may have been the final straw for Trudeau, who has been wooing former central banker, Mark Carney, to join the government.
Matters appear to have come to a head late last week. Freeland seemed strained and teared up when she was asked about the tensions over spending at a press conference on Friday.
The last time a finance minister disagreed with the prime minister on spending — Bill Morneau on COVID benefit levels — Trudeau resolved that Ottawa wasn’t big enough for the both of them.
The PMO plan is said to be a smooth transition, with Carney taking over Freeland’s position and then running in a by-election.
But Freeland may have made it impossible, or at least unpalatable, for Carney to accept. He is said to be unhappy with the spin coming from the Prime Minister’s Office, which is a feature not a bug in this government.
A cabinet shuffle is overdue — there are two vacancies and four other ministers have said they are not running in the next election.
But this is no way to run a country.
We have reached a level of dysfunction at the very top even greater than at the time of the Morneau-Trudeau spat.
It is government by improv, with all the inconsistency and miscommunication that happens when you are making it up as you go along.
Trudeau has decided to grasp at shadows and lost the substance as a result, continuing in his tradition of sidelining strong, independent women in cabinet.
He had best hope that Carney comes on board. To lose one finance minister might be regarded as a misfortune. To lose two would persuade his few remaining supporters that he is unfit for office.
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