Bloomberg Audio Studios, podcasts, radio News. On Monday morning, Canada's Prime Minister Justin Trudeau stood outside his residence in Ottawa and made the announcement that after nine years leading the country, he'll be stepping down. I intend to resign as party leader as prime minister. The decision came after years of growing economic strains in Canada and months of political turmoil for Trudeau and the Liberal party he leads.
For the past three weeks, everyone's felt that Trudeau was not going to survive this, and on Monday he made it official, calling our leadership race to replace him.
Brian Platt covers Canada for Bloomberg and has been chronicling every twist and turn of Trudeau's fall. He's based in Ottawa and he was there at Rideau Cottage for the announcement, braving the negative fourteen degrees celsius chill that's about seven degrees fahrenheit.
There was one little propane heater that we were all rotating around, and Trudeau came out and spoke to us for about forty five minutes. It was kind of understated the way that you would normally see Trudeau speak. There was moments where you could catch a bit of emotion to his voice, like he had the phrase he used a couple of times, always been a fighter. Every bone in my body has always told me to fight because I care deeply about Canadians.
I care deeply about this country.
And his voice caught a little bit. His eyes looked a little bit puffy, but maybe that was just because of the cold. But you know, he did not want to do this. I think that's the biggest thing that people should realize is Trudeau was fully preparing to fight the next election, and ultimately it just became untenable for him to hang on as leader, and so against all of his instincts and all of his intentions, he was
forced into this position. And I think you could really see that in his speech yesterday.
Today on the show, how housing costs, inflation and the looming threat of US tariffs helped force Trudeau into this position, and what Canada's right word shift and current leadership vacuum means for the country's economy and its position on the global stage. This is the big take from Bloomberg News. I'm Sarah Holder. Over the past few months, as Trudeau's polling numbers dropped, the Conservative opposition gained steam and Trudeau's
allies and the Liberal Party started turning against him. But Brian says for a while he still didn't think Trudeau would actually resign.
I mean I talked to him through news conferences, I talked to a lot of his inner circle. I was very convinced all the way through that Trudeau was not going to step down. Despite his bad polling numbers. He believed he could turn it around and win the next election, which is going to happen sometime in twenty twenty five. And right up until December sixteenth, I would have told you that same answer, Trudeau not stepping down.
But then on December sixteenth, his Finance Minister, Christian Freeland, publicly quit and the tides turned. Freeland was also Deputy Prime Minister, pretty much the second most important person in the government, and she had been a long time Trudeau ally, so this split it was a grab the popcorn moment in Canadian politics.
She published a letter criticizing Trudeau. Really it didn't directly call him out, but it Barry clearly criticized him and said he was not preparing seriously enough for the threat of tariffs under Donald Trump, that he was too focused on sort of populist measures, she called them political gimmicks, and not preparing for what might be a major trade war. In the moment that Christian Freeland quit, and quit in
such a public way, it really changed everything. It kind of cut the legs out from under Trudeau and his party, I would say decisively turned against him after that happened, and.
Says What happened to cause such a split between Freeland and Trudeau isn't completely clear, but we do know that he was planning to replace her as Finance Minister in an attempt to try to revitalize his government with fresh faces, a new narrative. His administration thought that might help improve their polling numbers. Trudeau offered Freeland a new job overseeing US Canadian relations.
I don't want to put words in her mouth, but I think if you look at the tone of her letter, she saw this as a humiliating demotion, as she was no longer going to be running a government department. But I have to say the manner in which she did this was kind of calculated to inflict maximum damage on
the Prime minister. And I know there are people around Trudeau now who were very taken by surprise with how Christia Freeland did this and are wondering if this was a play by her essentially to take out the prime minister and run for leadership herself. I want to be clear, I'm not reporting that that's why she did this, but there are people around Trudeau who are wondering that absolutely.
Well, let's step back for a moment. Trudeau served for nine years. When he first took office, he was a pretty popular leader. He came to the role as the son of a beloved former prime minister. His cabinet featured an equal number of men and women, which is a first for Canada.
I understand one of the priorities for you was to have a cabinet that was gender balanced.
Why was that so important to you, because it's twenty fifteen. In his first few years in office, he declared Canada open for anyone fleeing persecution, terror and war, and initiated reconciliation with Canada's Indigenous people. Those are just a few of the things that he did. Can you just chart his rise and fall for us?
When Trudeau became Liberal leader, the Liberals had suffered a devastating election fet in twenty eleven, they were in third place. They weren't even the official opposition party, you know, and this is a party that has governed Canada for much of the past one hundred years. So they were in a really bad place in many ways. They were in the worst place that they'd been in modern Canadian history. And Trudeau came in and absolutely reinvigorated and energized the
party and really created a big youth movement. I mean, when he won the election in twenty fifteen, younger voters really propelled him into office. There was a huge turnout in that election, and he was promising things that appealed to younger voters. He promised to legalize recreational marijuana use. He promised a big tax cut that raised taxes on the highest income earners and cut them for everybody else.
He also brought the Liberal Party, I would say, much further to the left, especially economically, than it had been a very centrist party. You know, it's maybe a little much to say he reinvented the Liberal Party, but he really did change it when he came in, and he won a big election victory in twenty fifteen and stayed
on as Prime minister for nine almost ten years. But what happened after the pandemic, especially with inflation and the rise in housing prices in particular, really cut into him and that was when things really changed.
Well, yeah, what were those issues that really brought Trudeau and the Liberal Party He leads to this inflection point.
I remember the timeline when the polling started to change dramatically for Trudeau because it was the summer of twenty twenty three when the narrative really took over that nobody could afford a house in Canada anymore. Renz had exploded and housing prices had exploded, and interest rates were high because of well various global factors in particular around supply chains and so on.
This is sounding familiar, Yes.
Yes, this was not just in particular the Canadian problem, right, Although there's one thing that I think did exacerbate the problem in Canada, which is after the pandemic, Trudeau's government kind of lost control of the immigration system, especially on temporary foreign workers in the international students. So there's a few things I think that fed into it. But there was a huge surge Canada brought in I believe within
twelve months. At one point the number was one point two million people in a country of about forty million people. The population growth rate exploded and it blew up the housing market. On top of the inflation problem around food prices and everything else. That the rest of the world was experiencing inflation in Canada, just like it did in every other developed country. I mean, it's killer for an
incumbent government. And one thing I thought was interesting was that well into the summer of twenty twenty four, when inflation was actually pretty much under control in Canada, but if you looked at polling, conflation was either the number one or the number two issue for many many months
after it had been brought back under control. And I do think that there is you know, along with the specific Canadian elements I mentioned, the global anti incumbent movement is specially around the inflation surge that came after the pandemic took a bite out of Trudeau absolutely, and so he was always going to be up against it to try to recover from that.
Trudeau will stay in office until his Liberal Party chooses a new leader. What will the process look like. Who are the front runners to replace him and what vision for Canada's economic and political future are they promising that's after the break. Trudeau's resignation comes at the start of an election year for Canada. The country will hold its national election by October at the latest, which would have already been a tight deadline for a new political leader
to gain support. But as Bloomberg's Brian Platt explained, when Trudeau resigned on Monday, he also asked to suspend the parliament to allow his Liberal Party some breathing room to choose a new leader. When parliament returns, there's a strong chance it'll be thrust into an election right away.
There's a lot of parliamentary drama right now because the three big opposition parties here have all now promised to vote against the government at the next opportunity. So you have this election deadline hanging over everything right now, and parliament is suspended, but it will come back on March twenty fourth, and when it comes back, you will pretty quickly have a confidence vote, and if the opposition parties follow through on what they promised, they will defeat the
government and that will trigger an election. So that's a pretty hard deadline to get a new leader in the place. You basically have two months, give or take a week or two.
Well, so, who are the front runners that are kind of emerging right now as Canada searches for new leadership for its parties.
Well, Freeland is probably the biggest name that everyone's talking about right now, Mark Carney. He's the former Central Bank governor of Canada and of England, and it holds many other positions right now, including the chair of Bloomberg ink we should disclose, but also the chair of Brookfield Asset Management, a very prominent and well established global figure. We wrote a story on Monday night, shortly after Trudeau gave a speech that Mark Carney is considering running for the leadership.
But you've got a bunch of other cabinet ministers around Trudeau who may run, So there actually is a pretty big potential pool here.
And all this comes at a time when President elect Donald Trump has threatened to impose steep tariffs of twenty five percent on Canadian experts to the US once he takes office. With Trudeau on his way out and his cabinet leader is potentially preparing to run for leadership themselves, Brian says the country's negotiating power with the US could be weakened.
It's a very not ideal situation for a Canadian government dealing with a potentially economically devastating threat south of the border. Trump is all already been mocking Canada right and mocking Trudeau, calling Canada the fifty first state, calling Trudeau the governor of Canada, and now Trudeau will just be the absolute definition of a lane duck or a custodian leader at this point, because he has said he has resigned, but he's just staying in office until his successor is chosen.
So he's already on his way out. And I think the only thing potentially that might help Trudeau in that situation is that he maybe has a bit more freedom to do some politically unpopular things because he personally will not be facing voters in an election.
But as Brian mentioned, the outlook for Trudeau's Liberal Party in the upcoming election is gloomy. It's been trailing the Conservative Party led by Pierre Pauliev.
You know, this sort of catch all term that people use for him is he's populist. He does have a very aggressive way of speaking, very blunt. He's also a pretty polarizing figure and there's a lot of Canadians on the other side who will be quite repelled by him, but he is in many ways, at least when it comes to policy, in his vision of government, just the total opposite of Justin Trudeau. If you go essentially from a Trudeau government to a Pierre Pouliev government, it will
be a huge turn for Canada. The kinds of things Polyev is talking about doing are build more fossil fuel projects, unleash Canada's oil and gas sector, and reduce the size of government and cut taxes. If Polyev comes in with a large majority government so it controls most of the seats in parliament, you know, he potentially will come in and make some pretty big changes that will just be, you know, quite a sharp turn from what we've seen
in the Trudeau era. And it's going to be very interesting to see if you take Justin Trudeau out of the picture, can a new Liberal leader eat into the commanding lead that Poliev has because at the moment it sure looks like he's heading for a huge victory and the Liberal Party you know, might be back in the world and is where it was before Justin Trudeau took over more than ten years ago.
Well, as you said, a lot of this sounds a little bit familiar when you're looking at the global stage. Canada is just the latest country that's poised for this consequential change in leadership. It's seeing a right word shift. France AusAID its prime minister last month. Germany is headed for a snap election next month. Trump is about to take office in the US. How does this news from
Canada fit into that global picture in your eyes? How should listeners be thinking about this moment of global political upheaval.
It does fit into the narrative and the established track record that it's just a very bad time to be an incumbent government right now. And Trudeau spent last year watching a lot of his G seven counterparts get taken out in elections, and they wanted to delay an election as long as they could into twenty twenty five to try to avoid the faith that you had seen in a lot of these other G seven countries. And that was the hope, you know, survive this period of global
instability and global back clash, especially related to inflation. Survive this, get through it, and you know, twenty twenty five, interest rates are lower, inflation is receding into people's memory. This is a chance to sort of turn things around. That's what Trudeau wanted to do, avoid the fate that he had seen around the rest of the world, and ultimately he has not been able to do it. Domestic political events eventually forced his hand.
This is The Big Take from Bloomberg News. I'm Sarah Holder. This episode was produced by Alex tie. It was edited by Tracy Samuelson and Laura Dylan Kane. It was mixed and sound designed by Alex Sugiura. It was fact checked by Adriana Tapia. Our senior producer is Naomi Shaven. Our senior editor is Elizabeth Ponso. Our executive producer is Nicole Beamster born Sage Bauman is Bloomberg's head of podcasts. If you liked this episode, make sure to subscribe and review
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