BNN Bloomberg Rewind: Morneau out, Freeland in as finance minister
Chrystia Freeland’s appointment as Canada’s new finance minister puts one of Justin Trudeau’s most trusted aides in the job of overseeing the nation’s economic recovery and gives the prime minister more leeway to reset his government’s agenda.
Freeland, who takes over after the resignation of Bill Morneau on Monday to become the first woman to hold the job, has been the go-to minister for Trudeau on some of the government’s thorniest issues over the last five years, including the renegotiation of the North American free trade pact.
Amid speculation Morneau’s departure may signal Trudeau plans to keep the fiscal taps wide open, Freeland’s appointment was welcomed by economists and business leaders. She’s seen as someone with enough authority in a left-leaning cabinet to maintain government discipline on spending.
Freeland is “someone who can be expected to stand her ground on key issues, her choice will provide some confidence,” said Doug Porter, chief economist at the Bank of Montreal. “She is a very good choice to take on the massive challenge of guiding Canada’s fiscal position through the next stage of the economic recovery.”
The government projects it will run a record deficit of 16% of gross domestic product this year, with economists predicting a budget gap of almost 5 per cent next year even without any new measures.
The cabinet shuffle comes at a critical moment for Trudeau as his government prepares a plan for economic recovery amid historically high unemployment. CBC News reported that Trudeau will prorogue, or suspend, the current session of parliament, which would give him a respite from a House of Commons investigation into his links to a Toronto charity that was given a government contract.
Morneau resigned amid disputes over what that recovery plan should look like, and how ambitious it should be. Advocates close to Trudeau have been pushing for a transformational social and economic agenda to take advantage of historically low interest rates, and some had seen Morneau as too cautious and an obstacle.
“The decisions made over coming weeks will set the country’s economic direction for the next several years,” Perrin Beatty, chief executive of the Canadian Chamber of Commerce, said in a statement. “The Prime Minister’s decision puts a strong hand on the tiller during an unprecedented economic storm.”
Freeland, 52, is only the second female finance minister appointed by a Group of Seven country, following Christine Lagarde of France. The former financial journalist, who has worked at the Financial Times and Thomson Reuters, was first elected in 2013, and won her district again in 2015 with the wave of new Liberal lawmakers that came to power with Trudeau.
She was appointed trade minister in Trudeau’s first cabinet before being promoted to foreign affairs minister, where she was lauded for her deft handling of President Donald Trump’s administration during Nafta talks. She also carried Canada’s trade deal with the European Union across the finish line.
After the governing Liberals were re-elected last year, Trudeau promoted her again -- to the post of deputy prime minister -- making her the point woman in dealing with increasingly hostile provincial governments in the oil-rich provinces of Alberta and Saskatchewan.
Economists say this negotiating experience will be an asset in her new role, which she will formally assume on Tuesday.
She’s “a strong choice with seasoned experience on domestic and international policy issues along with a record for forging consensus across different views,” Rebekah Young, economist at Scotiabank said by email. “Pushing back on further spending requests will be part of the job and she’s been proven to be a tough but effective negotiator.”
Her appointment was first reported by CTV.
While considered independent, Freeland has also been careful not to butt heads with Trudeau publicly -- who has now seen a number of his top ministers resign under contentious circumstances.
Many of their broad views align. Freeland wrote an award-winning book on the emergence of the “global super elite” and the squeezed middle class titled “Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else” that largely dovetails with Trudeau’s own economic thinking. In fact, Freeland and Trudeau met in 2012 at one of her book launches, after which the prime minister asked her to run for office.
Freeland graduated from Harvard University with a degree in Russian Studies and was a Rhodes Scholar at Oxford University.