The embattled minority authorities of Prime Minister Justin Trudeau faces a brand new problem with the current resignation of Deputy Prime Minister and Finance Minister Chrystia Freeland. With the sudden resignation come questions of whether or not Trudeau himself would possibly resign within the coming days. With president-elect Donald Trump’s inauguration on the horizon, who governs Canada is prone to set the tone for U.S.-Canada and broader North American relations.
Q1: What is occurring in Canada’s politics?
A1: The previous few days in Ottawa have been tumultuous on account of the sudden resignation of Deputy Prime Minister and Finance Minister Chrystia Freeland on December 16, 2024. The departure of Trudeau’s most essential and constant lieutenant got here simply hours earlier than she was scheduled to current Canada’s fall Financial Assertion to the Parliament of Canada. Because it seems, days earlier, Trudeau had advised Freeland he could be changing her with former Financial institution of Canada (and Financial institution of England) governor Mark Carney, however that the request to desk the financial assertion, which might present that the Liberals blew a CAD 20 billion gap within the funds, towards guarantees of retaining it regular, would stay. Freeland balked, and the favored Carney, who Trudeau has been attempting to recruit to show round his political fortunes, walked away.
In her resignation letter, Freeland cited disagreements with the prime minister and emphasised the necessity for Canada to take care of fiscal reserves to arrange for a doable tariff conflict with U.S. president-elect Donald Trump, arguing towards costly political-electoral strikes (similar to a vacation on the federal gross sales tax and a CAD 250 examine to most Canadians) that would undermine public confidence within the authorities’s capability to deal with the tariff disaster. Freeland’s resignation has heightened political uncertainty in Ottawa and has sparked hypothesis about Canada’s financial technique and political stability; the Canadian greenback has fallen to its lowest stage since March 2020. On the heels of her resignation got here calls from the leaders of all different main Canadian political events for Trudeau to resign.
This isn’t the primary time Trudeau has confronted important calls to step down. In late October 2024, at a closed-door caucus assembly, Liberal Occasion members urged him to resign to keep away from torpedoing the occasion’s probabilities within the subsequent election. For greater than a 12 months, the Liberals have trailed the Conservative Occasion by double digits in polls as a consequence of important coverage missteps, together with its dealing with of Canada’s housing disaster, which record-high immigration ranges and an inadequate housing provide have exacerbated. The lack of help from the New Democratic Occasion (NDP) contributed to the federal government’s tenuous maintain on energy. The NDP had supported the minority liberal authorities below what is named a provide and confidence settlement, the place in return for his or her help, the liberals agreed to pursue a number of the NDP’s priorities. However, the NDP pulled out of the settlement in September and has since been supporting the federal government in parliament on a case-by-case foundation. The Liberals’ help within the polls presently sits at about 22 p.c, a steep decline from its peak of 55 p.c in Might 2020.
This environment makes Canada the newest nation to probably face a worldwide anti-incumbency wave. In current elections, just about each different massive democratic nation has seen a change of presidency fueled by deep political dissatisfaction.
Q2: What’s going to occur if Prime Minister Trudeau resigns?
A2: Following the resignation of Freeland and blowback from throughout the Liberal occasion, Prime Minister Trudeau stated he would “reflect” upon criticisms of his management. Parliament went dwelling for the vacations on December 17 and won’t reconvene till January 25, 2025, giving Trudeau some respiratory house. Ought to the prime minister determine to resign, the Liberal caucus would identify an interim chief from amongst its members in Parliament who would instantly change into the brand new prime minister, that’s, as long as the federal government isn’t defeated by a no-confidence movement in parliament. The Liberals might select somebody who is just not a sitting member of parliament, however that particular person must run in a by-election in what could be a “safe seat” with the incumbent of that using resigning to make method for an interim chief. Nevertheless, given the Liberals’ deep unpopularity in the mean time, there could also be valuable few protected seats for such a maneuver, so it’s extra probably that the occasion would select an interim chief from amongst its present members of parliament.
Choosing a brand new everlasting chief will take a while. It took 5 months for Trudeau himself to win the management race again in 2013. Mark Carney, the previous banker (who is just not a member of Parliament); Chrystia Freeland; Melanie Joly, the nation’s minister of international affairs; and long-time Trudeau pal, Dominic LeBlanc, who was promoted to finance minister after Freeland’s resignation, are the entrance runners to switch the prime minister. Had been the federal government to fall and a snap election referred to as, the marketing campaign interval may be not more than 51 days, that means the unpopular Liberals would probably must marketing campaign with an interim chief who wouldn’t have the mandate of a everlasting chief chosen by the traditional occasion mechanism, making their lengthy odds even longer.
Resignation by the prime minister doesn’t essentially imply that the federal government would fall and new elections could be held. For that to occur, a no-confidence vote in parliament could be wanted. Whereas the Conservative Occasion below Pierre Poilievre is raring to carry the federal government down, it doesn’t have adequate votes to take action by itself. Right here, the New Democratic Occasion (NDP), below Jagmeet Singh, holds the keys. Like different occasion leaders, Singh referred to as for Trudeau to resign on December 16, however he didn’t say whether or not he would name for a no-confidence vote, telling the media that “all options are on the table.” Just like the Conservatives, the NDP accuses Trudeau of spending his time attempting to stop his ship from sinking slightly than addressing president-elect Trump’s tariff threats, which some describe as an existential menace to the Canadian economic system. The NDP is lower than 2.5 factors behind the liberals and is attempting to create sufficient daylight between their former governing accomplice to be able to soar into second place and change into the Official Opposition. Whereas nobody likes a winter election in Canada—two have taken place within the final 100 years—the times earlier than a no-confidence movement is authorised are getting fewer.
Trudeau additionally has the choice to prorogue Parliament, primarily terminating the parliamentary session till a sure day. This might stop any no-confidence votes and hold the federal government afloat, however would most certainly be extremely unpopular, decreasing the Liberals’ probabilities even additional within the subsequent election.
Q3: What’s prone to occur when Canada holds elections?
A3: Poilievre’s Conservatives have a large 21-point lead over the Liberals and can nearly definitely kind the subsequent authorities ought to there be an election. Present polling signifies they’d simply win a majority authorities with an estimated 218 seats in Parliament (172 are wanted for a majority within the 338-seat parliament), with the liberals lowered to 50 seats, the Bloc Quebecois surging to 41 seats, and the NDP profitable roughly 32 seats. Ranges inside polling outcomes might see the Conservatives with an excellent larger majority, the Liberals gaining or shedding extra seats, and inserting the Bloc and the NDP in a digital tie for Official Opposition standing.
Poilievre has excelled on the performative facets of politics, with punchy and combative slogans like “Axe the tax” and “Spike the hike” designed, very similar to president-elect Trump, to attraction to a working class annoyed by inflation, excessive housing prices, immigration, and different points. He has created excessive expectations however has been intentionally mild on substance. If elected prime minister, what would he do?
Poilievre has stated that his financial plan is to “axe the (carbon) tax, build the homes, fix the budget, stop . . . crime” and is “a bottom-up, free-enterprise agenda, not a top-down state capitalism agenda.” He goals to revoke the unpopular carbon tax and search to implement complete tax reform. As housing costs have skyrocketed, the Conservatives have proposed scrapping the federal gross sales tax on new housing costing lower than CAD 1 million, claiming that this can assist decrease mortgage prices and pace up homebuilding. On crime, Poilievre has voiced help for tough-on-crime insurance policies, like introducing necessary minimal penalties for extorsion and auto theft. On well being care, the Conservative chief has criticized the Liberal authorities’s pharma care laws, which incorporates pharmaceuticals within the umbrella of therapies and companies coated by nationwide Medicare. Below a Poilievre authorities, the personal well being care market would develop, and it’s probably extra folks will discover themselves paying out of pocket for a variety of medical companies. On immigration, Poilievre has stated that he would minimize the variety of folks arriving in Canada, given {that a} surge in worldwide college students and low-wage short-term international staff has ruined the “multigenerational consensus” that immigration is constructive for the nation in line with him.
This fall: What does this imply for U.S.-Canada relations?
A4: Relations with america would probably be higher below a extra business-friendly Poilievre authorities, not solely due to ideological affinity with president-elect Trump but additionally due to the low esteem the U.S. president has repeatedly demonstrated in the direction of Prime Minister Trudeau, just lately calling him the “governor of the great state of Canada.” Nevertheless, if Trudeau resigns now, it’s extremely unlikely {that a} new authorities may very well be constituted by the point Trump takes workplace on January 20, 2025. Which means Canada will enter the vital first 100 days of a U.S. administration rudderless, with an interim Liberal chief on the head of a extremely unpopular authorities. This state of affairs bodes unwell for Canada’s capability to navigate swirling threats of tariffs from its southern neighbor, whereas the Trump administration is prone to seize the chance to stress Canada over a bunch of commerce, protection, and border safety points. Over the long run, nevertheless, a change of management could present a window to enhance U.S.-Canada relations sooner slightly than later, even when the rapid penalties show disruptive. A brand new authorities in Canada will profit from having gained a mandate by elections, giving it a stronger hand to play in negotiations with america over tariffs and the 2026 USMCA evaluation, and given the ideological alignment below a possible Conservative authorities, might unlock new areas for cooperation, similar to in power and significant minerals cooperation.
Nevertheless, a change in management is not any panacea. The structural options of the U.S.-Canada relationship, specifically the U.S. commerce deficit with Canada and Canada’s laggard protection spending, are unlikely to be resolved in a single day. Each international locations must proceed engagement in any respect ranges to maneuver the connection in a constructive path. Some areas to concentrate on, no matter adjustments in authorities in Canada, embody border safety, the place Canada has acknowledged a rising problem in stemming the stream of legal exercise, together with illicit medicine and weapons. One other focus ought to be vital minerals, the place Canada’s huge useful resource wealth and experience in mining and refining may be an asset to america because it seeks to de-risk from China. Vitality safety can be mentioned, particularly as U.S. imports of crude oil from Canada reached a file of 4.3 million barrels per day in July 2024 following the growth of Canada’s Trans Mountain pipeline. Lastly, rising navy cooperation and funding, notably on the subject of North American Aerospace Protection Command modernization and truly bringing protection spending to the two p.c NATO goal, will probably be important for Canada to point out america it’s ready to hold its personal weight on the subject of North American safety and protection.
Neither america nor Canada advantages from frayed relations with each other. The potential for Prime Minister Trudeau’s resignation raises issues and alternatives alike, however none of those ought to overshadow the significance of the broader bilateral relationship and the hundreds of thousands of people on either side of the border who profit from it.
Christopher Hernandez-Roy is the deputy director and senior fellow of the Americas Program on the Middle for Strategic and Worldwide Research in Washington, D.C. Henry Ziemer is an affiliate fellow with the CSIS Americas Program. Andrea Casique is an intern with the Americas Program at CSIS.
