Why We Should Treat the Trudeau Government as Finished

I do not know what shape the Canadian government is in by the time you read this, but the last few days of 2024 played out like a movie. Let me walk through what happened, and more importantly, what it means for next year. Here is my bottom line up front: we should start saying goodbye to the Liberal government and expect a Conservative one within a few months. This is not a guess. What happened this month points straight at it.

How it started: Freeland fired on a Zoom call

To tell the story simply, go back a week. Prime Minister Justin Trudeau removed Chrystia Freeland as finance minister on a Zoom call. He told her she was no longer finance minister but offered her a new role handling relations with the United States and building a team to deal with the incoming Trump administration.

Trudeau seemed to think Freeland would go along with it. She did not. She was clearly upset, went on X and posted a sharp letter criticizing Trudeau, and resigned. Remember, Freeland had been one of his most loyal allies, his deputy prime minister, holding one of the most important posts in government. She did not expect to be pushed out, least of all on a Zoom call, and her reaction was pointed and emotional.

The Liberal caucus turns

That moment cracked the already shaky support Trudeau had inside the Liberal party. The news kept coming. The housing minister resigned. Around 23 Liberal MPs publicly called on Trudeau to step down. About a month earlier, a group of MPs had quietly floated the idea of him leaving in October. Now it hit like an earthquake. Trudeau was already dealing with serious political trouble even with loyal allies at his side. Without them, he is far weaker.

A new finance minister nobody wanted

Trudeau then went looking for a new finance minister, and it seems nobody wanted the job. He eventually landed on Dominic LeBlanc, who did not appear especially eager but stepped in when no one else would. Put it in context: we had Bill Morneau as finance minister from 2015 to 2020, then Freeland, and now LeBlanc. LeBlanc has long been one of Trudeau's trusted names, a minister across various posts over the years, and someone often mentioned as a possible successor.

The NDP pulls its support

Here is the piece that really matters. The NDP has now asked Trudeau to resign and said its members will not vote with the Liberals. Why does that matter? Trudeau's government is a minority. To pass legislation, it needs the NDP. Until now, the NDP had chosen to cooperate. With that gone, the Liberals no longer have the votes. Based on the polls, once the government falls and an election is held, the Conservatives come to power. It could take a few months, with a possible spring or early summer election, but the direction is set.

Trump, tariffs and what comes next

There is a real worry that things get bumpier before a new government arrives. Donald Trump is set to be sworn in on January 20, and he has already been sparring with Canada, going as far as mocking Trudeau. So we have open political and economic instability at the same time.

On the economics, if Trump follows through with a 25% tariff on Canadian imports, estimates suggest Canada's GDP could fall by 2.6%, which would mean a recession. Canada would not sit still; there is talk of raising energy prices and pushing back. But keep some perspective. Trump has threatened tariffs on China, Mexico, Canada and the European Union all at once, and nobody can pick a fight with the whole world at the same time. Tariffs also hurt the American economy, and no president wants to damage his own country. So this may not be as severe as it sounds.

Even setting all of this aside, I have said for the past year that Canada's economy has been weak, and the data backs that up. If you are trying to plan a move in this environment, the worst thing you can do is freeze. Fill out the form at the bottom of this page or book a free consultation, and we will build a plan that fits whatever the next few months bring. Stay well and take care.