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CWA # 1561, 8 January 2025
NIAS Global Politics Early Bird
Why did Justin Trudeau resign? What next for Canada?

  C Shraddha, Vaishak Sreekumar, Kumari Krishna, Nova Karun K

On 6 January, the Canadian Prime Minister Justin Trudeau announced his resignation, ending a decade-long term in office. In a news conference in Ottawa, Trudeau said he would step down as prime minister and party leader when the next leader has been elected through a "robust, nationwide, and competitive process."

Why did Trudeau resign?
The immediate reasons were his declining popularity, economic situation internal opposition within party, and the loss of his Liberal Party in the recent election. 

In 2024, Justin Trudeau's approval rating dropped to 27 per cent from 63 per cent in 2015.In September 2024, the Liberal Party lost its stronghold constituency in the Montreal by-election. 

The economic situation and the rising living costs have made Trudeau unpopular. The GDP growth rate, a key indicator of a country’s economic health, has witnessed sluggish growth in Canada indicating a recession. The country’s annual GDP growth rate fell from 5.3 per cent in 2021 to 1.1 per cent in 2023, combined with a six-quarter consecutive decline in real GDP per capita by 0.4 per cent. 

In 2024, 45 per cent of Canadians stated their inability to meet day-to-day expenses due to price rises. Although inflation has slowed since March 2024, food prices remain high. Compared to 2021 levels, food prices in 2024 have risen by 21 per cent. Housing prices in Canada have risen approximately 355 per cent since 2000.  Fluctuating immigration policy of the Trudeau administration has amplified the unemployment rate.  

Within the Liberal Party, leaders like Chandra Arya, Ken McDonald, and Sean Casey had publicly called for Trudeau's resignation in October. The abrupt resignation of former Deputy Prime Minister and Finance Minister Chrystia Freeland further heightened the internal pressure.

Who is Justin Trudeau? 
Justin Trudeau was born in 1971 to then-Canadian Prime Minister Pierre Trudeau and became an active member of the Liberal Party in 2006. He ran a successful campaign in 2015, dethroning the incumbent conservative party and becoming Canada's second-youngest prime minister ever. 

Trudeau's political platform has been quite close to the liberal philosophy of "Trudeauism" popularized by his father. It emphasizes social liberalism, economic nationalism, and a centralized political order prioritizing social justice. His first stint as prime minister began with a slew of liberal reforms, including an equal number of men and women in his cabinet and proposed environmental regulations. Trudeau's government also implemented a series of progressive policies like the legalization of marijuana, free childcare, pro-LGBTQ campaigns, and dedicated programs for Canada's indigenous communities. Externally, Trudeau oversaw signing the updated North American Free Trade Agreement, now known as the United States - Mexico - Canada Agreement or USMC, which preserved much of NAFTA. 

What next for the Liberal Party? Is Trudeau’s resignation too late for the party?
Trudeau's resignation has caused a leadership vacuum. It will likely lead to a contested race within the Liberal Party, which should happen by the end of the prorogation period. The party has to elect the next leader; the potential contenders include Chrystia Freeland, the former Finance Minister; Anita Anand, the current Transport Minister; Mark Carney, the former governor of the Bank of Canada and Bank of England; Melanie Joly, the current Foreign Minister, is also a potential leader. 

The leadership race could cause internal divisions and competition within the party. Coming at a time when the Liberal Party was already under decline in support and facing parliamentary challenges, Trudeau's resignation may have pushed internal dissatisfaction and public discontent to the detriment of the party, leaving the party in an uncertain position for a potential federal election. 

Trudeau's resignation announcement may not give the party enough time to regroup and effectively respond to the country's political and economic issues.

What are the implications for Canada's internal politics? 
Trudeau's resignation will likely make Canada's politics unstable in the near future. The opposition, especially the Conservatives under Pierre Poilievre, along with other Opposition parties, like the New Democratic Party (NDP) and Bloc Quebecois, are poised to take advantage of the leadership transition and the liberal party dynamics to weaken its standing. The party already lacks a majority in the parliament, and with the withdrawal of support from the NDP leader Jagmeet Singh, there is further destabilization of the political landscape. The polls indicate that the Liberals will lose the next elections, with a new leader by 24 March, a confidence vote could trigger a federal election, likely resulting in a Conservative win.

What does the resignation mean for Canada's external relations?
Trudeau has failed to impress and caused considerable damage to Canada's relations with the US, NATO and India. Trump had, on multiple occasions, publicly criticized Trudeau and his policies. Trump also threatened to impose 25 per cent tariffs since Canada had failed to stop the flow of illicit drugs and immigrants into the US from its southern border. Trump renewed his offer to make Canada the 51st state of the US shortly after Trudeau announced his resignation! 

Trudeau failed to make any headway with President-elect Trump on his threats of imposing tariffs. He had also failed to stand by his promise to increase the defence budget spending at the NATO summit in July 2024. Trudeau has also made promises to the UK and other countries on multiple global issues like energy, trade, and security. How these will be upheld depends on his successor. 

With India, Canada’s relations had reached an all-time low during Trudeau’s term. The significant areas of contention are the assassination accusations and the changes in the immigration policy. His term saw the end of many fast-track study programs, international student permits dropping by 35 per cent in 2024. However, India remains a crucial international interest for Canada owing to the sizeable Indian diaspora and the USD 8.4 billion trade achieved in 2024. 

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