Dead party walking: Freeland quits, Trudeau clings to power

Prime Minister Justin Trudeau’s Liberals have never been as vulnerable as they are now, after Chrystia Freeland dealt what could be his final blow. 

Hours before she was set to unveil the federal government’s fall economic statement, Freeland publicly resigned as finance minister following months of Trudeau openly courting former Bank of Canada governor Mark Carney for the job. Freeland posted the resignation letter to Trudeau on her social media feeds, where she accused him of “costly political gimmicks,” and implied his office operates in an egotistic and bad faith way with premiers. 

Her explosive resignation letter admits she and Trudeau have been at odds for weeks over the government’s spending plans and strategy to deal with U.S. President-elect Donald Trump. But it concludes by saying she intends to run in the next election, setting herself up for a potential leadership bid, observers say.

“If she has leadership ambitions in the future, it’s important she not be the cause of sinking the ship,” Queen’s University political studies professor Jonathan Rose said.

Publicly separating herself from Trudeau’s spending policies, like the GST holiday and $250 cheques for Canadians, makes sense if she wants to position herself to lead the Liberals post-Trudeau, Rose told Canada’s National Observer.

“It’s about creating the narrative for the future, and I think the story about trying to be fiscally responsible, but being pressured to have the GST [holiday] and being pressured to spend more money, is a compelling one if she runs as a fiscally prudent Liberal.”

Rose said he now expects an election sooner rather than later, because the NDP is the only party propping Trudeau up, and with the Liberals imploding, it will be more difficult for the NDP to continue to justify supporting the government. 

Increasing calls for Trudeau’s resignation 

On Monday, calls for both an election and Trudeau to resign were mounting. 

Conservative leader Pierre Poilievre called for his resignation and a “carbon tax election,” as well as singling out NDP leader Jagmeet Singh and asking whether the NDP will continue to prop up the Liberals’ minority government.

“Justin Trudeau has lost control and yet he clings to power,” Poilievre said. “We cannot accept this kind of chaos, division and weakness while we're staring down the barrel of a 25 per cent tariff from our biggest trading partner and closest ally.

“Mr. Trudeau is being held in office by one man: Jagmeet Singh.”

Singh called on Trudeau to resign but stopped short of saying whether he would pull his party’s support for the minority Liberal government. He said “all options” are on the table and would not elaborate on what specifically that means.

Later that day, NDP House Leader Peter Julian told CBC News if Trudeau doesn’t step down by late February or early March his party would vote non-confidence to topple the Liberal government.

Alex Marland, a professor of Canadian politics at Acadia University, told Canada’s National Observer in a phone interview, he doesn’t believe “all options” include bringing down the government this week. 

“The bottom line is, the NDP is not going to want to have an election because they're behind in the polls,” he said. 

“They will find different ways of spinning their support. You know, they can say it is about policy, not people. … There would need to be something quite egregious for the NDP to say, ‘that's it.’”

‘Intra-party war’

At stake is more than Trudeau’s political career. This week, the federal government was expected to finalize its clean electricity regulations, and it has not yet put in place a cap on oil and gas emissions, as promised. If the government falls, key climate initiatives could die on the vine. 

On Monday afternoon, Intergovernmental Affairs Minister Dominic LeBlanc was sworn in as finance minister and shortly after spoke to reporters, saying he and Trudeau are both focused on the incoming Trump administration and addressing affordability issues in Canada in the months to come. 

As the Liberals’ top brass attempt to project stability by discussing the work they’re focused on, Marland said it's important to differentiate between the Liberal government and the Trudeau  government. 

“This is a conversation about Trudeau’s political future more than a conversation about the future of the Liberal government,” he said. “The Liberals could bring in a different leader, and that causes a reset and a different conversation.”

Following a Liberal caucus meeting Monday evening, MP Chad Collins told reporters the party is not united, and the only path forward is to choose a new leader. But not every Liberal agrees. Minister of Crown-Indigenous Relations Gary Anandasangaree told reporters he has confidence in Trudeau. 

James Rowe, an associate professor at the University of Victoria, said Freeland’s resignation is a massive blow to a prime minister who had already been struggling.

“It just increases the feeling that so many of us have that this is basically a dead party walking right now,” he said. By resigning so publicly on the day she was supposed to announce the fall economic statement, Freeland is giving permission to other senior MPs to call for change, he added.

“So it's war,” he said. “It's intra-party war, and I do think she's positioning herself for a leadership bid.”

Hadrian Mertins-Kirkwood, senior researcher with the Canadian Centre for Policy Alternatives, called Freeland’s decision a “statement resignation” that seems “deliberately designed to blow up the government.” 

Despite valid disagreements over the wisdom of doling out $250 cheques and pausing the GST, from a public policy perspective, the unfolding political drama is unfortunate because it means less focus on actually tackling problems that need to be addressed, he said. 

On the climate file, Freeland has not made that a priority, Mertins-Kirkwood added. 

“Freeland's legacy on climate will be those tax credits if they survive, which there's no guarantee of,” he said. Earlier in the Liberals' time in power, the party was more interested in direct spending using vehicles like the low carbon economy fund, but “that doesn’t seem [like] it’s been Freeland’s approach.”

Oilpatch-friendly climate policy

Like Trudeau, Freeland’s strategy on climate change is not always aligned with climate science. She has supported clean energy tax credits to incentivize growth in renewables, but she has also played a key role promoting fossil fuel extraction — which climate science is clear must be rapidly phased out. 

As previously reported by Canada’s National Observer, Freeland’s office oversaw the Trans Mountain pipeline expansion project costs as they spiralled out of control, while helping secure billions of dollars of new financing to complete it by putting taxpayers on the hook for loan repayments if the company couldn’t manage it. 

Her office has also delayed guidelines to determine what counts as green and transition-aligned investment for years, by pushing for fossil fuels like liquefied natural gas to be included, against expert advice. 

Together, this represents a strategy of reducing domestic emissions while facilitating higher fossil fuel exports that continue to warm the planet. Canada’s exported emissions from coal, oil and gas crossed one billion tonnes last year, surpassing the country’s domestic total. 

This strategy is “the formula that Trudeau Liberals have settled on, and Trudeau and Freeland have been really comfortable with,” Rowe said. Even if there are cabinet ministers who are frustrated with the approach and want to see more ambitious efforts, the reality is that Canada is the fourth largest producer of oil and fifth largest producer of gas in the world, and that means the industry holds tremendous sway. 

“So, I would expect that same approach to continue under any kind of Freeland leadership, unfortunately,” Rowe said.