New Delhi: The resignation of Chrystia Freeland as deputy prime minister and finance minister of Canada, just before she was to present the fall economic update, has exposed faultlines in Justin Trudeau’s cabinet. In her now public resignation letter, Freeland accused the government of resorting to “costly political gimmicks” instead of charting an “honest and viable path” to fiscal stability.
Canada’s national deficit is projected to rise from $40 billion to $62 billion, amid Trudeau’s populist measures, including a GST holiday and cash payouts. These policies, aimed at boosting his falling popularity, have failed to reassure the public as inflation concerns persist and fiscal discipline takes a back seat.
Meanwhile, US President-elect Donald Trump has threatened to impose a 25 percent tariff on imports from Canada. Given that 75 percent of Canada’s exports are destined for the US, such tariffs could have a negative impact on its economy. The Trump factor is interesting, as the next US president makes comments about the Canadian prime minister’s paternity and suggests that Canada should become America’s “51st state”.
At home, Trudeau’s minority government relies heavily on the National Democratic Party (NDP) for survival. Led by Jagmeet Singh, the NDP’s 25 seats provide the critical support needed to keep Trudeau’s administration afloat in the 338-member House of Commons, where a majority requires 170 seats.
This alliance, however, has drawn sharp criticism from opposition parties and political commentators. The Conservative Party has accused Singh of prioritising personal benefit, accusing him of supporting Trudeau till February just so he is eligible for pension. While Singh has publicly criticised Trudeau’s policies, he has refrained from withdrawing support, fuelling speculation about his motives.
The Conservative Party, under the leadership of Pierre Poilievre, is capitalising on Trudeau’s troubles. Recent byelections have shown a shift in voter sentiment, with Conservatives making substantial gains even in Liberal strongholds. Polls indicate that Poilievre’s party currently enjoys a significant lead, with 45 percent approval compared to 33 percent for Liberals.
Trudeau’s approval ratings have plummeted from 63 percent in 2015 to 33 percent, according to latest Ipsos data, reflecting widespread dissatisfaction with his government’s handling of economic and political challenges. The populist measures introduced by Trudeau, such as a CAD 250 cash payout to households earning under CAD 150,000, have been dismissed as desperate attempts to win favour. Critics argue that these measures lack substance, given their limited impact on the average Canadian household.
As Trudeau faces mounting pressure from both domestic critics and international challenges, his political future looks increasingly uncertain. The combination of economic instability, an emboldened opposition and a strained alliance with the NDP leaves his government on shaky ground.
In episode 1575 of #CutTheClutter, Editor-in-Chief Shekhar Gupta explains how Chrystia Freeland’s resignation, Trump’s tariff threats and Jagmeet Singh’s political maneuvering are reshaping the Canadian political landscape, with implications for Trudeau’s leadership and the nation’s future.
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