Justin Trudeau ‘considering resignation’ after shock clash with finance minister

Canadian prime minister Justin Trudeau is reported to be considering stepping down amid a crisis that saw his own finance minister resign over Donald Trump’s threat to hike trade tariffs.

Mr Trudeau told his cabinet that he is considering either resignation or prorogation – the process of ending the parliamentary session – according to the broadcaster CTV News. The prime minister is planning to address parliament on Tuesday, the report said.

The episode represents one of the greatest challenges yet of Mr Trudeau’s nearly 10 years as prime minister. His approval rating, which was as high as 63 per cent when he was first elected, has repeatedly dipped below 30 per cent this year amid economic struggles, a housing shortage and disagreements about the issue of immigration.

Some senior figures in Mr Trudeau’s own party have also called for him to resign ahead of a general election due before October next year.

On Monday the deputy prime minister and minister of finance, Chrystia Freeland, dramatically resigned just hours before she was set to release the country’s first economic plan ahead of the change of administration in America, where president-elect Trump has promised an “America First” policy of economic nationalism.

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Ms Freeland’s stinging resignation letter questioned Mr Trudeau’s ability to deal with the tariffs threatened by the incoming Trump administration, which she referred to as a “grave challenge” facing the country.

Mr Trump has promised to hit Canada with a 25 per cent tariff on goods, something economists say would have serious consequences for a Canadian economy already struggling with high inflation.

The prime minister’s only public comments on Monday came during a holiday party for Liberal donors.

“It’s not been an easy day,” Mr Trudeau said in a room full of party supporters, calling it one of the Liberal party’s “toughest days”. But he did not say what his next steps would be.

“It’s the absolute privilege of my life to serve as your prime minister,” Mr Trudeau continued.

“Canada is the best country on Earth, but it’s not perfect,” he said. “That’s why I wake up every single day thinking about how to make this nation work better for all Canadians.”

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In her scathing letter, Ms Freeland, a former journalist, went public with her opposition over Mr Trudeau’s push for short-term spending on vote-winning measures which will expand the budget deficit.

She said Mr Trudeau asked her to take on a less senior post in his cabinet last Friday, after weeks of arguing over spending.

“Our country today faces a grave challenge,” she said in her resignation letter. “That means keeping our fiscal powder dry today, so we have the reserves we may need for a 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 said the “only honest and viable path is for me to resign from the cabinet”.

“To be effective, a minister must speak on behalf of the prime minister and with his full confidence. In making your decision, you made clear that I no longer credibly enjoy that confidence and possess the authority that comes with it,” she added.

Ms Freeland stopped short of elaborating on what she meant by “costly political gimmicks”. But it was likely in reference to disagreements between the finance department and the prime minister’s office over a sales tax exemption during the Christmas holiday season.

Last weekend the government announced a tax exemption allowing Canadians to buy tax-free groceries, snacks, children’s clothing and gifts, as well as sending C$250 cheques to 18.7 million Canadians.

Public safety minister Dominic LeBlanc – a member of Mr Trudeau’s inner circle – was quickly named finance minister of the minority Liberal government.

Conservative leader Pierre Poilievre doubled down on his calls for the prime minister to resign and said the government was spiraling out of control.

“We cannot accept this kind of chaos, division, weakness, while we’re staring down the barrel of a 25 per cent tariff from our biggest trading partner,” he told reporters.

Mr Trudeau, however, accused Mr Poilievre of “actively willing to bet against Canadians and Canada”.

“Pierre Poilievre is uninterested in building homes, delivering vital supports, creating good jobs, or, even as we saw with his opposition towards GST tax break, he’s opposed to even cutting taxes,” Mr Trudeau said.

Mr Trudeau on Monday faced frustrated MPs at a hastily arranged caucus meeting following the finance minister’s shock exit.

Ontario Liberal MP Chad Collins, who was part of the meeting, said the party needs new leadership.

“I’m not going to breach confidentiality in terms of what happened in the caucus, but I can say we’re not united,” he said. “There’s still a number of our members who feel we need a change in leadership. I’m one of those.”

Mr Trudeau won the 2015 election in part by channeling the star power of his late father and former prime minister Pierre Trudeau. He promised “sunny ways” after almost a decade of Conservative Party rule.