The Decibel - What’s next for Trudeau and the Liberals after a chaotic 2024

Episode Date: December 19, 2024

As new details around the feud between Prime Minister Justin Trudeau and his former deputy prime minister Chrystia Freeland emerge, the Liberal caucus gathered on Tuesday to awkwardly celebrate the holidays. The fete came after the final two days of the fall sitting of Parliament where a lot happened.John Ibbitson is a columnist and reporter based in Ottawa for The Globe. He goes through what we’ve learned since Monday about Freeland’s resignation, everything you missed about the Fall Economic Statement and where the Liberals could go in 2025.Questions? Comments? Ideas? E-mail us at [e-mail]

Way back at the start of this year, our first episode was with political columnist and reporter John Ibbotson. That episode was titled, It Was a Rough Year for Trudeau. What Will 2024 Bring? So it only made sense to go back to John at the end of the year and ask him to sum it up. So, John, on a scale of one to 10, where 10 is sunny ways and one is, you know, like total political disaster, how bad of a year did Justin Trudeau and the federal liberals have? Somewhere around minus five, minus six, I would say. I mean, I don't know how it gets worse. They are 20 points behind the conservatives in the poll, at least, down tied with the NDP in the basement. Mr. Trudeau's popularity is non-existent. He is meeting resistance from his own caucus, now from his own cabinet. And the president of the United

States incoming has started referring to him as the governor of the 51st state. And of course, his deputy prime minister and finance minister, Chrystia Freeland, resigned from cabinet earlier this week, which led to a, one could say,

awkward Christmas party for the liberal caucus on Tuesday night. Because that's what we really are, a big family. Now, like most families, sometimes we have fights around the holidays. But of course, like most families, we find our way through it. John is on the show today to reveal what new details we have about Freeland's resignation,

what was in this week's fall economic statement that slipped under the radar, and he'll sum up how this year went for the federal liberals. I'm Mainika Raman-Wilms, and this is The Decibel from The Globe and Mail. John, thanks so much for joining us. Great to be here. So, John, we're chatting at noon on Wednesday. I want to go back to the news that shook the Liberal Party at the start of this week. Of course, Chrystia Freeland's resignation.

It's now been over two days since all of that broke. What are some of the new details that we've learned in that time about how this all went down? Well, we had been reporting, the Globe had been reporting, that there was growing disenchantment in the prime minister's office with Christian Freeland, the finance minister. This was remarkable. She was the deputy prime minister. She was his right-hand woman, that he would be expressing discontent with her communication style, that the prime minister's office would feel this discontent and that discontent was appearing in the press was amazing. And what finally happened, apparently, we knew that Mr. Trudeau was trying to woo Mark Carney, the former governor of the Bank of Canada and the Bank of England,

to come into the cabinet as finance minister, presumably. And apparently on Friday, over Zoom, I think, the prime minister informed the finance minister that, A, she was out, and B, she should still give the economic statement on Monday before she was turfed and replaced by Mr. Carney. Ms. Freeland, it is fair to say, did not take this well. Okay, so there was that Zoom call on Friday then between Freeland and Trudeau. And John, I also understand that a picture posted over the weekend may have added to some of this tension as well. This was a picture posted by Katie Telford, who's the prime minister's chief of staff. Can you tell me about that? Yeah. And it shows how much things have

deteriorated. These people used to be really tight. You know, Katie Telford and Jerry Butts and Justin Trudeau were incredibly impressed by Chrystia Friedland when she was a journalist and talked her into coming back to Canada, running in a by-election. And then ultimately, of course, she became his number two deputy prime minister. But things have deteriorated to the point where apparently the minister's people were infuriated by a photograph that Katie Telford, the chief of staff, displayed on Instagram over the weekend where she was having a high old time in New York City. And it was felt that there shouldn't be such frivolity and happiness, even as the government was in such a state of crisis.

All right, let's come back to Mark Carney and his role in all of this. He's obviously not joined the government at this point. So do we know anything more about that? We don't. Presumably, Mr. Trudeau informed Ms. Freeland on Friday, assuming that he had the consent of Mr. Carney to come in as finance minister. Maybe he misunderstood Mr. Carney. Maybe Mr. Carney changed his mind, certainly by Monday morning, when Ms. Friedland issued that public letter resigning and basically excoriating the prime minister for what she considered to be his irresponsible obsession with quick fixes to try to win popularity, it would have been a remarkable act of courage on Mr. Carney's part to then come in and announce that he was prepared to be finance minister. It all just is nothing but chaos. What we do know for sure is that the prime minister's office and the prime minister acted rashly, and I would go so far as to say with blind incompetence

in trying to replace Ms. Freeland with Mr. Carney without having the details nailed down. And we should say, of course, Carney has not spoken publicly about this. Neither has Freeland or Trudeau. But I guess if we look at all of this information that we have now, John, about how this all happened, what does this tell you about how Prime Minister Trudeau handles, I guess, his cabinet? And how he handles individuals. Everyone accused conservative Prime Minister Stephen Harper of being incredibly controlling, of having all power within his hands and within the Prime Minister's office. Some said he was even undemocratic.

And then Justin Trudeau came along promising sunny ways, cabinet is back, he said. But in fact, things have been even more centralized under Mr. Trudeau than they were under Mr. Harper. The cabinet has even less power now than it had when the conservatives were in power. And we saw that with the resignation of his first finance minister, Bill Morneau, who said not only that he was constantly being overridden by the prime minister's office, but that he couldn't even have a proper conversation with Justin Trudeau, who appears to have great difficulty in one-on-one meetings with other

people or in small groups. He's a deeply introverted prime minister, but also a tightly controlling one. Can you give us some historical context here, John, in terms of the events that we saw this week? Like how unprecedented is it for a prime minister to have such a loyal minister as Freeland was then turn on them in this kind of way? Well, I can't think of a precedent. The closest that I could get to, I think, would be the cabinet crisis of 1963. In that case, John Diefenbaker was leading a minority progressive conservative government. The Americans were pressuring Canada to accept nuclear-tipped Bomark missiles to fend off Soviet bombers. Mr. Dieffenbaker couldn't make up his mind whether

to accept them or not. His defense minister demanded that we say yes. His foreign affairs minister demanded that Canada say no. And there was a crisis cabinet meeting in which Mr. Harkness, the defense minister, declared that he had lost confidence in the prime minister. In the end, three cabinet ministers resigned, the government fell, and Lester Pearson won the election. That was a pretty chaotic scene. This one is pretty close. And at the center of this chaotic scene is actually the fall economic statement, which is essentially an update on government spending from earlier in this year and outlines its fiscal priorities. And we haven't been talking much about this statement because it's been overshadowed by all this other drama that's

been going on here. So let's just take a minute and actually go through some of the important points that came out of this statement. What were, I guess, the top takeaways that we should know? Well, the top takeaway certainly is that the budget deficit turned out to be about $20 billion higher than projected. Now, the Liberals are saying this is a one-time charge related to Indigenous claims. But really, it doesn't matter whether it's a one-time charge. There's always a one-time charge of some kind or another just about every year related to something or other. What matters is the budget projected, the deficit for the last fiscal year would be about $40 billion.

Instead, it's about $60 billion, about 50% higher than projected. And that is bound to make the markets nervous, bondholders nervous, credit rating agencies nervous. And it's even more remarkable that Mr. Trudeau expected Ms. Freeland to stand up, announce this dismal piece of news, and then step aside for a new finance minister to take over. Okay, so the Liberal government overshot basically the deficit cap that it set maintaining specific debt to GDP ratio, as well as keeping deficits below 1% of the GDP in 2026 and onward, they were met in this statement. So I guess I just wonder, how much do we need to worry about the fact that they

didn't meet that specific deficit cap? I think you need to worry a lot. The government has been saying since 2015, that the deficit doesn't matter, that it's a debt to GDP ratio that matters the most. That's fine as long as you're in good economic times. But as we saw with the pandemic, as soon as you go into a recession of any kind, the debt to GDP ratio explodes. And then the real question is, well, what was your deficit before? What is your deficit now?

So I think we need to be very concerned about the fact that the federal government is running a deficit of about $20 billion more than it intended to run, especially with Donald Trump threatening to impose crippling 25% tariffs on Canadian export once he becomes president. For ordinary, everyday Canadians, it matters if your governments are not able to keep their finances under control because ultimately you have to pay the costs in interest rates of financing those deficits. The other thing that this fiscal update does is set spending priorities for the government, essentially like a budget, right? Was there any new spending that we saw in this fall economic statement? Yeah, there's new spending on the border.

Again, this is an attempt to convince Donald Trump that we are getting serious about controlling the border and that he should not impose these crippling tariffs. It's not an awful lot of money, though, and I don't think it's going to be enough to satisfy the Americans. It's $1.3 billion over a number of years, and that's really chump change in terms of the need to patrol what is the world's longest and mostly undefended border. And can you help me understand the process here, John? Because when there's new spending, doesn't Parliament have to vote on that? Like, does this mean that the Liberals will be facing essentially a non-confidence vote over the statement? They should face a vote eventually over the fall economic statement. But then again, we still haven't seen the measures implemented from the budget of last spring, including changes to the capital gains tax.

Parliament has been filibustered since the early fall on a conservative motion. The fact that virtually nothing has been taking place in the House of Commons for months and that most Canadians don't seem to have noticed or cared, I think, speaks volumes about the lack of an agenda that this government has right now. But yes, eventually, sooner or later, there should be some kind of vote on the measures. And that would be an opportunity then for potentially for the government to fall for an election to be called. Absolutely. But the government is now on winter recess. It doesn't come back to the end of January. And frankly, if Mr. Trudeau is still prime minister when the House comes back at the end of January, there will be all sorts of non-confidence motions and the economic statement could be the least of them. We'll be right back. All right, John, I want to pivot here a little bit and look back to earlier this year.

We've had you on the show a bunch. And in late June, we spoke with you. All right, John, I want to pivot here a little bit and look back to earlier this year. We've had you on the show a bunch. And in late June, we spoke with you. This was just after the Liberals lost their seat in a Toronto by-election. This was an important seat for them, too. During that conversation, you listed a few things that may come to pass in the second half of the year. So let's play that tape. Let's listen to what he said then. You know, if you are an MP in the 905, the suburban rioting surrounding the city of Toronto or in the lower mainland, and you have

won your rioting in the last three elections, but you didn't win by huge amounts, then you have to ask yourself, if we can't win in Toronto St. Paul's, can we win in Brampton? Can we win in Peel? Can we win in Surrey or Burnaby? And the answer is probably not. I'm probably about to be defeated. What are you going to do about that? Are you going to decide to step down and spend more time with your family? Are you going to confront the prime minister in a phone call and say, Justin, since that time, we've seen both of those things happen, right? Ministers saying they're not running to spend more time with their family, leaving cabinet and actually people being more upfront with Trudeau there. There are currently eight portfolios that need new ministers in this government. So, John, what effect does this instability essentially have on the functioning of our government? Short term, not so much. You still have a public service, you still have deputy ministers and those below them who are able to run their departments

on a day-to-day basis. In the long term, there's no policy being made. There's no minister who is seized with the files of that particular department and who is making recommendations to cabinet on how those files should be addressed. But then again, as we've said before, this is a government at the end of its third term. Its agenda is largely fulfilled, and it doesn't seem to have much in the way of a new agenda. So we're able to get away with a pretty unprecedented number of vacancies in cabinet because there isn't very much for cabinet to do. Hmm. number of vacancies in cabinet because there isn't very much for cabinet to do.

Do you think we are going to be seeing a cabinet shuffle, though, in the foreseeable future? Oh, absolutely. Sometime between now and the return of the House at the end of January, there has to be a shuffle in which these positions are filled, in which a new team is in place to address the incoming American administration, or Mr. Trudeau resigns, prorogues parliament, and calls a leadership race, in which case everything is on hold until there's a new leader in place, or we have an election. You mentioned the possibility of proroguing parliament. So why might that be an option? If Mr. Trudeau were to decide to resign and to suggest that the Liberal Party find a new leader who would then become

prime minister, it would be tempting for the opposition parties to simply bring down the government before that new leader was in place. By proroguing parliament, that would allow the liberals to find a new leader and a new prime minister, and it would not permit the conservatives and the NDP and the bloc to bring the government down. So it would be basically a safety mechanism for the governing party. OK, but that sounds like that would be kind of contingent though on if Trudeau resigns? Yeah, it's possible that Mr. Trudeau could provoke parliament and not resign. But that means that

when the House returns at the end of January, there would have to be a throne speech to launch the new session. And of course, a throne speech is a question of confidence, and it's most likely that the government would fall. So I imagine that Prime Minister Trudeau is going to want to have some strong allies in his cabinet, especially after what happened with Chrystia Freeland. Does he have many of those left, John? I guess I just wonder, who are those people? Well, I can think of Dominic LeBlanc, his good friend and the new finance minister. Frankly, I'm not sure that there are any other really staunch stalwart

allies in cabinet or caucus that he can rely upon. That said, I got everything wrong on Monday, to myself at least, not in public, thankfully. I was quite confident that after Christian Freeland resigned, that cabinet would confront him and demand that he resign. Cabinet apparently did not confront him and demand that he resign. Well apparently did not confront him and demand that he resign. Well, I thought to myself, surely if he meets caucus, caucus will rise up as one and insist that he step aside. He met caucus and they did not rise up as one and insist that he step aside. So he has a remarkably compliant cabinet and caucus,

even in these incredibly difficult times when you would expect under any normal circumstances that if the prime minister did not resign, which does seem to be the obvious decision to make when your deputy prime minister and finance minister quits on the day of the fall economic statement and accuses you of fiscal irresponsibility, if he does not resign, then it does not at this point appear that there's enough of a momentum within the cabinet and caucus to force him out. So I guess it sounds like from what you're saying then, John, if he doesn't resign,

is there nothing that his caucus can do or maybe will do is the question? I mean, there is a political tipping point at which so many members of caucus are demanding the prime minister step aside, in which cabinet ministers are publicly demanding that he step aside, that it becomes impossible for him to carry on. What is that tipping point? I don't know. I would have thought it arrived on Monday with the Minister of Freedoms resignation, but I was wrong about that. He says he's reflecting about his future, but there's nothing that he has signaled at this point that suggests he has decided that he will, in fact, step aside or call an election. So if he is determined to carry on, I'm not sure what is the mechanism

by which his party and his caucus and his cabinet can force him to go. Let's come back to this prospect of an election. We know, of course, one has to happen by fall 2025. And a big part of the reason why we haven't had one yet is because the NDP, of course, have been voting with the liberals on confidence votes. So what is stopping them from voting down the government at this point?

Up until now, they maintained that they wanted their agenda to be fulfilled. That included dental care and pharmacare, both of which are now in place. And indeed, Jagmeet Singh ended the supply and confidence agreement earlier in the fall. But he has kept the government going on confidence votes. Why? Well, Pierre Polyev, the conservative leader, says Mr. Singh is waiting until he gets his pension, which would arrive in the winter. I don't know that that's true.

It is certainly true that the NDP is no better off in the polls than the liberals are. They don't have a lot of money, but then again, they never have a lot of money. I think it could simply be that up until the last few days, the NDP was worried that an election held now would be as hard on them as it would be on the Liberals. However, Mr. Singh has now indicated that he wants Mr. Trudeau to go and that he should step down. I think we can safely assume that if a confidence vote were held, let's say at the end of January when Parliament returns, that the NDP would join the opposition parties and the government would fall. That's a projection on my part, but I'm easily confident in that projection.

So just very lastly here, John, before I let you go, as we look ahead now to 2025, is there any way that the Liberals can rank better than a meager minus five out of 10? I think that was your ranking there. Can they do better than that next year? I certainly don't think they can do better than that with Justin Trudeau as leader. The Canadian public seems to have stated as emphatically as possible that they want him to go 20 points or more behind in the polls. If Mr. Trudeau were to step down and someone were to replace him would the party's popularity increase i think it would uh would it increase enough that it would move ahead of the conservatives

under mr polyev no at this point i don't think it would but we'd have to wait and find out how that new leader appeals to the public if and when that leader is chosen always great to hear your insights. Thank you so much for being here, John. Hey, my pleasure. 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.