The Decibel - Freeland resigns, upending Trudeau’s government

Episode Date: December 17, 2024

On Monday morning, Chrystia Freeland announced she was stepping down as finance minister. This came after reports of increasing tensions between her and Prime Minister Justin Trudeau over the GST break and $250 cheques. She posted her letter on X just after 9 a.m., on the day when she was supposed to deliver the fall economic statement.Later, after a day of speculation and confusion, the Liberals tabled the fall economic update, and MP Dominic LeBlanc was sworn in as finance minister to replace Freeland. The day ended with a Liberal caucus meeting, where Trudeau’s leadership was put into question.Globe and Mail senior political reporter Marieke Walsh is on the show to walk us through a chaotic day on Parliament Hill and tell us what this could all mean for the Liberal government.Questions? Comments? Ideas? Email us at [e-mail]

On Monday morning, Chrystia Freeland resigned from her post as finance minister and deputy prime minister and left the Liberal cabinet. Premier, you must be concerned about the resignation of Chrystia Freeland today. Well, I think we all are, but again. As president of the Treasury Board and minister of transport, This news has hit me really hard. And I'll reserve further time. She's been an excellent team member to work alongside. And I continue to consider her a friend. The moment now is for us to focus on the best interests of Canadians. That's what we're doing.

Freeland was supposed to deliver the fall economic update yesterday, a kind of mini-budget that signals the government's priorities for the next few months. Instead, she delivered a resignation letter, saying Prime Minister Trudeau no longer wanted her to serve as finance minister, and that he'd instead offer her another cabinet position. This came after weeks of reported tension between Freeland and the prime minister's office. On Monday afternoon, Minister Dominic LeBlanc was announced as Freeland's replacement and was sworn in as finance minister at Rideau Hall.

I, Dominic LeBlanc, do solemnly and sincerely promise... And after a day of speculation and confusion, the government finally delivered the fall economic update to the House, without a speech introducing it or any debate around it. I'm looking for your advice, obviously, Mr. Speaker. What we're asking, Mr. Speaker, is the right to ask questions. I've never seen anything like this in Parliament. It's total chaos. Can you clarify who the Deputy Prime Minister is and who the Minister of Finance is?

The day capped off with a last-minute Liberal caucus meeting, which ended with the Liberals far from united. Marika Walsh, The Globe's senior politics reporter, has been following all of this. She's here to discuss what led to Freeland resigning, the fallout so far, and what it means for the Trudeau government. I'm Mainika Raman-Wilms, and this is The Decibel from The Globe and Mail. Marika, thanks so much for joining us. Thank you so much for having me. Just another slow day in Ottawa. Just a very quiet Monday. Yes. So, of course, Marika, you've covered politics for years. I know it has not been a slow day today.

You just got back from a house. It's almost 8 p.m. when we're talking now. Have you ever had a day like this on the Hill before? No, I have not. And honestly, you know, I'm middle aged and have been on the Hill for a while and covering politics for a while. But people who are more senior than me have said they also have not seen something like this in quite some time. And it just raises so many questions about what happens next and whether it's tenable for the prime minister to stay on. Yeah. I wonder, like anyone you talked to, did anyone kind of see this coming? I know you started the day in a lockup for the fall economic update. Like, how did that go?

The news of today is not the financial numbers. It is not what was in the fall economic statement. The news of Monday is Finance Minister Christia Freeland and the Deputy Prime Minister to Justin Trudeau stepping down and releasing an absolutely scathing letter that is very critical of the Prime Minister's policies, his approach right now, and raises very serious questions about what the government's plan is to address Donald Trump. There was also a policy criticism in her letter that cannot be overlooked. And that raises questions about the prime minister's handling of the situations before him. So let's talk about this letter, Marika. Like you said, she posted her resignation with this letter. She posted it on X around 9 a.m. Monday morning.

What actually is in the text of that letter? Let's dissect this. Well, it was really bombshell after bombshell. The first bombshell that she released in the letter is that on Friday, she says the prime minister told her that he no longer wanted her to serve as his finance minister. So that is the first real head scratcher from a political perspective. And granted, we do not know the side from the prime minister or his office as to how that conversation came about, what the content of that conversation is. But you have to wonder why you would expect somebody who you just told you don't want to be in that job anymore to still do the job you want them to do three days later on Monday and table a fall update. For which we have already reported, Robert Fyfe and myself, that there were tensions between her office and the prime minister's office over spending, over the policy priorities of spending priorities that the government was setting.

And so that is in the first two lines of the letter. She acknowledges point blank in the letter that she and the prime minister have been at odds over what she calls, quote, the best path forward for Canada. She says the country faces a grave challenge with Donald Trump's incoming threats of a 25% tariff. And she says we need to take them, quote, extremely seriously. 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 Canadians

doubt that we recognize the gravity of the moment. Can we talk about this political gimmicks then, Marika? I assume she's referring to potentially the GST rebate that just went into effect last weekend. What do we know about this? Yeah. So from our reporting, she's referring to the GST holiday that began just this weekend in which things like booze, kids diapers, restaurant meals,

Christmas trees are exempt from sales tax. And then, of course, there's the $250 checks the government said would go out to all working Canadians making less than $150,000, but that have been stymied by the opposition parties because of their concerns that it doesn't go to the right people, that it should be expanded, which would make it even more costly. Already, these measures were going to cost the public purse about $6.3 billion. And in this letter, she is clearly suggesting that not only does she believe that these are not the right policy prescriptions for the moment, but that she doesn't believe Canadians will even give the government credit for it. And the polling suggests actually that that's the case, that it has not led to a bump, for example, for the prime minister. So these are the substantive policy issues that she underlines. But politically, what this really did is reignite the discussion in a huge earthquake kind of way about whether

the prime minister can stay on, whether he has the support of his cabinet or caucus. And that is really still an open question at the end of Monday, as it was at the beginning. And I say that because there are Liberal MPs publicly now more than before calling for him to quit. And there is a lack of consensus coming out of that Liberal caucus meeting from Monday evening as to whether there is confidence in the prime minister, either wholly in cabinet or wholly in caucus. Many ministers would not say, for example, whether they have confidence in the prime minister or when they did say they have confidence in the prime minister, they said they were

only speaking for themselves. And while one liberal MP said that caucus is united behind the prime minister. I think he has the confidence of the caucus. I mean, Minister Freeland made a decision and I respect her. Another said that's not the case. But I can say we're not united. There's still a number of our members who feel we need a change in leadership. I'm one of those.

I want to go back to something you mentioned from the letter that I thought was really interesting. You were talking about these tensions between Freeland, the finance ministry, and the prime minister's office. She said in the letter that they find themselves at odds kind of for the vision of where the country should go. So can we talk about that? What do we know about those tensions? Well, what we reported about the tensions in advance of today was that the tensions had increased over the level of spending that the prime minister's office was pushing, both because the minister did not necessarily or her office did not necessarily agree with the actual policies being suggested.

But also because the spending meant that she would risk the fiscal guardrails or guideposts or objectives or anchors. They come by many names in Ottawa. But essentially, the spending goals, the things that would determine how much the government could spend, she was worried that those would be risked in the name of this new spending. And she's right. From what our colleagues are reporting, they did not follow the fiscal guardrail of keeping the 2023-24 deficit below $40.1 billion. It is well above that. And so those were the tensions that we were reporting on. But the prime minister's office clearly didn't see her resignation coming.

Cabinet clearly didn't see her resignation coming. And much of Ottawa did not see her resignation coming this morning. Ministers were going into Cabinet visibly shaken, shocked by the news. Chris Chifreland is a good friend, someone I work with very, very closely as president of the Treasury Board and Minister of Transport. This news has hit me really hard, and I'll reserve further comment until I have time to process it. The winter break begins Tuesday evening, so the prime minister only has to get through, you know, a few more hours in the House of Commons with an opposition facing him.

But that does not mean his troubles are over when the House rises on Tuesday afternoon. And I do want to ask you about that. But I thought it was a really important point that you said that people didn't really see this coming because Freeland has been such a strong ally of the prime minister, right? She's deputy prime minister, kind of always the right hand of Justin Trudeau, really since he's been in power. I wonder, when did we start to see, I guess, cracks in that relationship, Marika? Well, you're completely correct, first of all, of how close they have been in the past. Not just in the fact that in Mr. Trudeau's first mandate as a majority government, she was tasked with really leading the government's response to Donald Trump's first tenure in office. But also, very soon after the pandemic in 2020,

she was promoted to finance minister to replace Bill Morneau. And in that time period of the pandemic, the two essentially were in lockstep. They very much appeared that way. They presented themselves that way, to the point when the 2021 election happened, the first news the prime minister made was that Krista Freeland would be staying in her post as finance minister and deputy prime minister. So we've come a long way from that. And what her letter makes clear is that that gap has grown since essentially Donald Trump's election. and in the few weeks since then, how the government has handled it, both in terms of their policy response, as well as their domestic political response to the very poor fortunes that the Liberal Party is contending with. And by that, I mean, very low polling, very low personal popularity for the prime minister. And on top of that, as we've discussed before, you know, the loss of two by-elections. There's

another by-election tonight that we're not even talking about that the liberals are also expecting to lose. We'll be back in a minute. In Trudeau's attempt to maybe turn things around, we have been hearing, too, that Trudeau's courting Mark Carney, of course, former Bank of Canada governor and Bank of England governor, to potentially join the party. Is this factoring into what's happening now at Almarica? Of course it is. That was a huge factor into how last week played out. If you take a step back, it's almost surprising that nobody saw Ms. Freeland's resignation coming today. The people who had the full picture and those people who had the full picture are the Prime Minister's office and her office were growing. Then we reported that the Prime Minister had renewed his efforts to recruit Mark Carney, likely for the Finance Minister's post. And in the wake of those stories, the opposition repeatedly pressed and hammered the government about Ms. Freeland's status, about the relationship between the Prime Minister and the Finance Minister. And in's status, about the relationship between the prime minister and the finance minister. And in that context, the prime minister never explicitly came to her defense.

He defended his government's policy priorities. He defended his government's spending decisions. But he never explicitly came to her defense. And that can leave a finance minister really hanging out there alone, especially right before a false statement on the economics of the government, on the budget, the bottom line, the dollar signs of the government. And so you can imagine, and people were already asking us last week, why is she still there? How has she not resigned? This is so humiliating for her. At the same time as the prime minister was not defending

Chrystia Freeland in the House of Commons, he's still at an event about women's place in elected politics and promoting women in elected politics, took credit for appointing the first female finance minister. So on Tuesday night, he takes credit for appointing the first female finance minister. Then we learned today that on Friday, he told that first female finance minister that he planned to replace her. And then somehow the question now truly is, how is it that the prime minister's office expected her to stay in her position despite told that, and to deliver a false statement that they knew she was at odds with. And so it seems like they were potentially recruiting Carney to take over the finance portfolio after moving Freeland to something else, obviously, that maybe didn't go

exactly as they planned. Do we have a sense of, is Mark Carney in talks to join the government? Well, we know he was in talks to join the government. Those talks were ongoing as of Friday. If Mark Carney listens to the Decibel, I hope he'll give us a shout because we are keen to hear whether he is still open to those conversations. I think it would be difficult to see how that happens. However, a lot of things still need to happen. The prime minister still now desperately needs to shuffle his cabinet. He has Dominic LeBlanc in as finance minister, but Dominic LeBlanc is also the public safety minister right now and the minister for intergovernmental affairs. It's a lot of work.

It's a lot of overtime for one man. And there's several other ministers already holding dual portfolios. Jeanette Pettypat-Taylor is holding her role at Veterans Affairs and is also the employment minister since Randy Bosno stepped down earlier this fall under controversy. Anita Anand is the Treasury Board president and also the transport minister because Pablo Rodriguez quit a few months ago to run for the Quebec Liberal leadership. There are a lot of ministers in cabinet right now serving dual roles. And the prime minister, it can't be understated, in less than a year, he has lost eight or nine ministers. That is a significant chunk. That's

about a quarter of his cabinet who has left, all for different reasons. But nonetheless, when you put the whole together, it raises more questions about the stability of his government and the confidence that his cabinet ministers have in him. Well, we've been hearing calls for Trudeau to step down for months. They've been kind of quieted for a while. But after Freeland's resignation, where does that leave Trudeau? That is a million dollar question on Monday night in Ottawa. Since Freeland's resignation, where does that leave Trudeau? That is a million dollar question on Monday night in Ottawa. Since Freeland's resignation, at least eight MPs have publicly called for him to resign. That is a significant increase from the numbers we saw in October when that first revolt happened. One MP, Yvonne Baker, told me today he does not think that the prime minister would

survive a secret ballot vote in the Liberal caucus if one were allowed to take place. Now, he said that before the caucus meeting. And what we know from that caucus meeting is that the government's chief whip, Ruby Sahota, says that conversations are open. They're continuing. We're having those discussions. It's up to our caucus. So it's not clear yet where it ends, but there is no consensus from liberals within Justin Trudeau's own caucus on him staying. Freeland likely knew the timing of her resignation, of course, right before the fall economic statement could be used, especially by the opposition, I guess, as a further argument against the government. Right. I guess, Marika, what does it tell us about how bad things were that she decided to go ahead and resign, you know, despite all of that? Krisha Freeland exacted the absolute maximum pain on the prime minister that she could in the timing and manner of her resignation. The fact that she announced it just before cabinet was set to meet, the fact that she

announced it on the day the fall economic statement was supposed to be tabled, those are all things that further damage the prime minister and that further weaken him. And you could say she triggered this sort of crisis of confidence in the prime minister, or at least sort of reignited those questions about his future. On the flip side, you could say the prime minister triggered this himself when he told his finance minister three days before she was supposed to table the false statement that he no longer wanted her in that role. In that context, who could expect her to stay on? And what does it say about the prime minister that he seems to have thought she would? So what does her resignation and the way that she did it, what is the signal about Freeland's future? And I guess, is there anything that we can glean about her future intentions? I think we can. And I think the most notable thing from her letter on Monday morning

is that she was quitting cabinet, but actually made the point of saying that she will stand for reelection in the next election. To me, that is a sign of somebody who has more ambition. And Chrystia Freeland has long been talked about as a potential successor to Justin Trudeau. Another remarkable thing that Chrystia Freeland mentioned in the letter is that she said, our time in government will inevitably come to an end. And she was talking about how she thought the government should use the time it has and how it should best position Canada and its economy for the Donald Trump presidency. To me, all of that is very much leaving the door open then for her to mount a leadership bid should the leadership open up. That's very much an open question whether that will happen. The prime minister is making clear that he wants to stay on so far.

But I think you can absolutely read from her letter that she is also keeping her options open. Can I ask you about what the opposition had to say in response to all of this, Marika? Because it was, of course, a big day on the Hill. What did we hear from Pierre Polyev and Nijagmeet Singh? Yeah, it was such a big day and with so many scrums that it's actually hard to keep track of it all. But Pierre Polyev called the NDP's bluff and he argued that the NDP should vote no confidence

with the Bloc and the Conservatives and that would lead to an election and that would force voters, Canadians, to have a say on their government before Donald Trump becomes the next president in late January and essentially give a clear mandate to whoever does form government. He said that should happen by the government allowing a vote on the fall economic statement. We have so far not seen that happen. And really interestingly, Jagmeet Singh, while he on Monday called for Justin Trudeau to resign, he was expressly explicit in his party's position that they would not commit to pulling confidence in this minority liberal government.

He said all options are on the table, but he can't control who the liberal leader is. He can control who the government is. And at least on Monday, he would not commit to defeating this government, given the crisis of confidence that Krista Freeland has outlined. So I guess just very lastly, the big question here is, with all of this on the table, does this bring us any closer to a potential election? I think we first have to find out how this week unfolds. I think this is one of those weeks in Canadian politics where every minute can matter, every day can matter. And we clearly do not know what we will wake up to on Tuesday morning or end the day with on Tuesday evening,

given what we saw on Monday. Well, Marika, we may be chatting with you or one of our other Ottawa colleagues again pretty soon. Thank you so much for taking the time to be here tonight. Thank you so much for taking the time to be here tonight. Thank you. That's it for today. I'm Mainika Raman-Wellms. Our producers are Madeline White, Michal Stein, and Allie Graham. David Crosby edits the show. Adrian Chung is our senior producer, and Matt Frainer is our managing editor. Thanks so much for listening, and I'll talk to you tomorrow.