Finance Minister Chrystia Freeland Resigns Ahead of Economic Statement
The Canadian government’s fall fiscal update has been overshadowed by the sudden resignation of Finance Minister Chrystia Freeland, raising political uncertainty and economic concerns across the country.
Freeland, who led the development of the fiscal plan, announced her resignation Monday morning, just hours before the update was tabled. She revealed Prime Minister Justin Trudeau had informed her last week of a cabinet shuffle that would remove her from the finance portfolio. Declaring that stepping down was the only “honest and viable path,” Freeland’s departure ignited calls for Trudeau’s own resignation, including from Liberal MPs and NDP Leader Jagmeet Singh.
$250 Rebate Program Shelved
Among the notable announcements missing from the fiscal plan is the cancellation of the $250 rebate cheques. Initially promised to Canadians earning up to $150,000 in 2023, the rebates were shelved after failing to gain support from opposition parties.
Rising Deficits and Business Incentives
The fiscal update revealed a larger-than-expected deficit of $61.9 billion for 2023-24, up by $22 billion from earlier forecasts, due to unresolved pandemic benefits and Indigenous legal claims. The deficit is expected to shrink to $48.3 billion this fiscal year.
To spur business investment and compete with expected U.S. tax cuts under Donald Trump’s return to office, the government reinstated a temporary capital cost allowance measure. This change will allow businesses to claim larger tax deductions on investments, costing the federal treasury $17.4 billion over six years.
GST Holiday Introduced, Border Security Boosted
While the $250 rebate is cancelled, the GST holiday on select essential items began on Saturday. Additionally, the government allocated $1.3 billion to strengthen border surveillance amid Trump’s threats of 25% tariffs on Canadian and Mexican goods unless migration and drug flows are controlled.
Dominic LeBlanc Steps In as Finance Minister
In a swift transition, Public Safety Minister Dominic LeBlanc was sworn in as Canada’s new finance minister late Monday. His appointment comes amidst growing pressure on Trudeau to stabilize his government and avert an early election.
Political analysts describe the fiscal update as a placeholder in a climate of uncertainty, with major economic and leadership questions dominating the headlines.