Canada's finance minister resigns as Prime Minister Trudeau deals with declining popularity

TORONTO (AP) — Canadian Finance Minister Chrystia Freeland, long Prime Minister Justin Trudeau's most powerful and loyal minister, announced Monday she was resigning from the Cabinet as Trudeau struggles with declining popularity.

Freeland, who also was deputy prime minister, said Trudeau had told her Friday that he no longer wanted her to serve as finance minister and that he offered her another role in the Cabinet.

But she said in her resignation letter to the prime minister that the only "honest and viable path" was to leave the Cabinet.

"For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada," Freeland said.

Freeland and Trudeau disagreed about a two-month sales tax holiday and $250 Canadian (US$175) checks to Canadians that were recently announced.

Freeland said Canada is dealing with US President-elect Donald Trump's threat to impose sweeping 25 per cent tariffs and should eschew "costly political gimmicks" it can "ill afford."

"Our country is facing a grave challenge," Freeland said in the letter. "That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war."

Trudeau has said he plans on leading the Liberal Party into the next election, but there are some party members who do not want him to run for a fourth term. It wasn't immediately clear what Freeland's resignation from the Cabinet means for Trudeau's immediate future.

No Canadian prime minister in more than a century has won four straight terms.

The federal election has to be held before October. The Liberals must rely on the support of at least one major party in Parliament, as they don't hold an outright majority themselves. If the opposition New Democrats pull support, an election can be held at any time.

Trudeau channelled the star power of his father in 2015, when he reasserted the country's liberal identity after almost 10 years of Conservative Party rule. But the son of late Prime Minister Pierre Trudeau is now in big trouble. Canadians have been frustrated by the rising cost of living and other issues like immigration increases following the country's emergence from the COVID-19 pandemic.

Freeland said in the resignation letter that Canadians "know when we are working for them, and they equally know when we are focused on ourselves. Inevitably, our time in government will come to an end. But how we deal with the threat our country faces will define us for a generation, and perhaps longer."

Freeland's resignation comes as Trudeau has been trying to recruit Mark Carney to join his government. Carney is the former head of the Bank of England and Bank of Canada.

He was so well regarded after helping Canada dodge the worst of the global economic crisis that the UK named him the first foreigner to serve as governor of the Bank of England since it was founded in 1694.

Carney has long been interested in entering politics and becoming leader of the Liberal Party. It wasn't immediately clear if Carney has agreed to join Trudeau's Cabinet.

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