Freeland, who had served as finance minister since 2020, stepped down on Monday, opposing Prime Minister Justin Trudeau’s focus on short-term spending and voter-targeted tax breaks that would widen the budget deficit.
Freeland previously led a cabinet group tasked with developing strategies to address US policies under President-elect Donald Trump.
Trump has threatened 25 percent tariffs on Canadian goods, a scenario Deutsche Bank strategist Michael Puempel said is now more likely given Canada’s current political turmoil.
“Simply put, unless there is more stability in Canadian political leadership, we believe Trump is likely to maintain his maximalist approach to trade with one of the US’s largest trading partners,” Puempel wrote in a note to clients.
He anticipates an early Canadian election in the first quarter of 2025 and expects tighter fiscal policy to follow.
