Trudeau Steps Down After Nine Years as Prime Minister

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December 2024 Federal Reserve Inflation Rate Decision

Willem Buiter | Independent economic advisor

Canadian Prime Minister Justin Trudeau, 53, has announced his resignation after over nine years in office. Facing declining approval ratings and internal party dissent, he will remain in office until a new Liberal Party leader is chosen. Parliament is suspended until March 24 as the leadership contest unfolds, with the Conservatives favored in upcoming elections.

Image courtesy of interviewee. January 6, 2025

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This video discusses significant political upheaval surrounding Canadian Prime Minister Justin Trudeau, who faces increasing internal opposition and speculation about stepping down due to low poll numbers for the Liberal Party. The recent demotion and resignation of Finance Minister Chrystia Freeland, who criticized Trudeau in her resignation letter, is viewed as detrimental to his leadership. The discussion highlights the economic context, noting that while Canada faces issues such as an affordability crisis, it is not in dire economic straits.

With Trudeau's leadership potentially coming to an end, numerous candidates are emerging for the Liberal Party leadership, including Freeland, current Finance Minister Dominic LeBlanc, and other notable figures like Mélanie Joly and François-Philippe Champagne. This video suggests that a leadership convention could occur within a short timeframe, limiting the ability of candidates to campaign or build support.

The potential challenges for the next leader are underscored, particularly regarding relations with the U.S. under President Trump, whose unpredictable policies could impact Canada significantly. The overall sentiment indicates a bleak outlook for the Liberal Party, as they are far behind in the polls and face the urgent task of revitalizing their competitiveness ahead of upcoming elections. This video draws a parallel to past political scenarios where new leadership failed to recover a party from severe decline, hinting that unless significant changes occur, the Liberals might suffer a similar fate.

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Here are five key points from the video:

1. **Trudeau's Leadership Challenges**: Rumors suggest that Prime Minister Justin Trudeau may step down due to growing internal opposition, particularly highlighted by Finance Minister Chrystia Freeland's recent demotion and subsequent resignation, which is seen as a significant blow to his leadership.

2. **Impact on Liberal Party's Polling**: The Liberal Party has been struggling in the polls for over a year, and there are concerns about their dismal electoral prospects unless they can regain lost support. Despite this turmoil, recent changes in leadership have not yet influenced polling results.

3. **Freeland's Future in Politics**: Chrystia Freeland is expected to be a significant contender for the leadership of the Liberal Party despite criticism regarding her communication skills. Her resignation was pointed, and she has indicated that this is not the end of her political career.

4. **Potential Leadership Candidates**: Various candidates have emerged or are expected to run for the Liberal leadership, including the current Finance Minister, several Quebec ministers, and potential dark horse candidates. The tight timeframe for the leadership contest could favor well-known figures.

5. **Challenges with U.S.-Canada Relations**: The next Liberal leader will face significant challenges, especially concerning relationships with U.S. President Donald Trump, who has threatened tariffs against Canadian products. Trudeau's experience may help navigate these complex issues before he steps down.

These points encapsulate the critical issues facing Trudeau's leadership, the Liberal Party's current struggles, and the implications for future governance.

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Here are some key quotes extracted from the video:

1. **Trudeau's Leadership and Internal Opposition**:
- "Rumors have been flying that Trudeau would be announcing that he was stepping down mainly because of internal opposition to his leadership... has grown exponentially over the past few weeks."

2. **Christie Freeland's Resignation**:
- "She responded by resigning as finance minister, which is seen by most observers as being a death blow for his leadership."

3. **Liberal Party's Polling**:
- "They've been very low on the polls for over a year... the dismal electoral prospects, unless they can pull back some of that lost support."

4. **Criticism of Economic Management**:
- "The leader of the opposition, Pierre Paul Yev, likely the next Prime Minister, has been intensely focused on how the liberals have mismanaged the economy."

5. **Freeland's Political Communication**:
- "She had been under some criticism for being a poor political communicator... by the media as well as by liberal backbenchers."

6. **Freeland's Intentions After Resignation**:
- "She has made it clear that she intends to seek leadership. She said this wasn't the end of the road for her."

7. **Potential Leadership Candidates**:
- "There are others, the current finance minister... very respected for his political skills... Francois Philippe Champan is another high profile Quebec minister who will probably throw his hat in the ring."

8. **Timeframe for Leadership Convention**:
- "We're talking about maybe a two month period for this leadership convention to happen... there wouldn't be anytime really to go about raising money or signing up new members."

9. **Challenges Ahead for New Leadership**:
- "I mean, yes, that's going to be a huge challenge... threatening very severe tariffs against Canadian products."

10. **Trudeau's Ongoing Role**:
- "Trudeau is staying on until a new leader is chosen... he at least has long experience with dealing with Trump."

11. **State of the Liberal Party**:
- "The liberals are in a situation now, we're really, it's to save the furniture election for them... more than 20 points behind for the last year is highly unlikely that any new candidate will be able to turn things around."

12. **Historical Convideo of Leadership Changes**:
- "The main thing is to try to prevent the liberals from suffering the same fate as Brian Mulroney's progressive conservatives in 1993."

These quotes encapsulate the main themes and insights from the video regarding Trudeau's leadership challenges, Freeland's resignation, the state of the Liberal party, and the potential for new leadership candidates.

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Rumors have been flying that,

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Trudeau would be announcing,

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that he was stepping down mainly

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because of internal opposition to his leadership has,

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has grown exponentially over the past few weeks,

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especially since,

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the finance minister Christie Freeland was, sort

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of unceremoniously, demoted.

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And, she responded by resigning as finance minister,

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after penning, quite a, a sharp criticism

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of Trudeau in her resignation letter, which, is

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seen by most observers as being,

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a death blow for his leadership.

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I think in large part, in order to try

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to revive liberal fortunes,

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they've been very low on the polls for over a year.

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And, the dismal electoral prospects,

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unless they can pull back some of that loss support.

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And I think that the, the,

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the spending was being aimed at trying to do that.

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It's had no impact whatsoever on the polls.

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And Freeland was pushing back against

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that at the time in which she was told

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that she would no longer be

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finance minister, and then she resigned.

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So, you know, the Economics Canada's economy is,

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is not doing poorly.

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Of course, like other countries,

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we've had an affordability crisis.

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Inflation has been tamed in Canada, there is a criticism

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of the government, for Canada's low productivity,

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but low productivity is optimum Canadian economy problem.

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So I don't think the economy is in such bad straits.

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Although the leader of the opposition, Pierre Paul Yev,

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likely the next Prime Minister,

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has been intensely focused on,

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how the liberals have mismanaged the economy.

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Uh, that's a good question.

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I mean, it's a very short timeframe to choose a new leader.

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I think that obviously gives better known

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and better established candidates,

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a big advantage over anybody else who might want

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to contest to the leadership.

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Uh, I don't know if Kearney will run

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for the leadership or not.

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He's never held elected political office.

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He declined to run for the liberals in the last election,

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declined to replace Freeland as as finance minister.

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So I don't know how well received his candidacy will be

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within liberal ranks.

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Uh, partly for that reason, yes, he has a very high profile,

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a lot of respect internationally and so on,

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but he hasn't been a political warrior in the trenches

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and in a short campaign like this that may work against him,

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Freeland, I wouldn't have thought that,

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her prospects were, were all that great.

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Prior to this episode where she resigned,

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she had been under some criticism

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for being a poor political communicator, both

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by the media as well as by, liberal backbenchers

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who didn't think that she was doing a very good job

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communicating their government's message. And then she,

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She resigned under these, these circumstances.

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And, with her letter of resignation,

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which was extremely pointed

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and well put together, has seemed to revive

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her standing, frankly.

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Uh, she was very well received within the liberal caucus,

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when she attended caucus after her resignation.

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And she has made it clear that she intends

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to seek leadership.

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She said this wasn't the end of the road for her.

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I think that that's the message that she will be a contender

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and she'll be one of the main contenders.

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There are others, the current finance minister,

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very close confidant of, of, Justin Trudeau,

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Dominic LeBla, and he's been, there

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for a very long period of time, very respected

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for his political skills.

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Um, he'll,

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he'll be a leadership candidate, I believe as well.

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Uh, there are some others, a Quebec candidate,

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certainly there should be, one or two Quebec candidates.

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There was a big New York Times profile of Melanie Jolie,

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who is the current, foreign affairs minister for Canada,

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which gave her, boost in terms of her prospects.

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Uh,

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Francois Philippe Champan is another high profile Quebec

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minister who, will probably throw his hat in the ring.

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And there are others, Sean Fraser, Anita

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and Nan, who are more long shots.

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So I think there, there will be a considerable field

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of candidates and there wouldn't be anytime really

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to go about raising money or signing up new members.

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All of that is out the window.

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We're talking about maybe a two month period

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for this leadership convention to happen, if

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that's what's going to happen.

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Uh, we'll find out the details shortly.

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Um, so it, it,

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that at least does level the playing field a bit, you know,

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and, who knows, with, with these,

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leadership conventions.

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So we might see a surprise in the end.

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That's just the half of it, actually.

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I mean, yes, that's going to be a huge challenge.

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Uh, you know, Trump is, blustering away

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as he does down there, threatening very severe,

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tariffs against Canadian products.

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But the Canadian and American economies are so integrated,

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that any tariffs against Canadian products going

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to the United States, inevitably rebounds to hurt American

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companies and producers and consumers.

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So, you know, there's also some speculation that,

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this is a negotiating tactic on Trump in order

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to get Canada to do other things.

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He wants it to do, you know, pump up defense spending,

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be more vigilant on the borders with the United States and,

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and so and so and so, so that,

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that threat coming from Trump, of course,

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he's very unpredictable character

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and it will have a big impact, I think,

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on whoever takes over trying to respond to

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Trump. Trudeau is staying

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on until, a new leader is chosen.

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So he at least has long experience with dealing with Trump,

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and that that may be a good thing,

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for Canada, at this point.

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But the liberals are in a situation now, we're really,

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it's to save the furniture election for them.

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And no one expects that a new leader will be able

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to pull the liberals out of the doldrums.

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They've been in it. I mean, they're so far behind.

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More than 20 points behind

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for the last year is highly unlikely

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that any new candidate will be able to turn things around.

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The main thing is to try to prevent the liberals,

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from suffering the same fate

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as Brian Ma Rooney's, progressive conservatives.

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In 1993, he handed over poison chalice to a new leader

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and the party was decimated

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and they never recovered from that.

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And that may be the liberals fate as well.

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Uh, if, things go really badly for them.

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So any new leader, the first task for them will be try

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to save the furniture, bring the liberals back to some sort

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of semblance of competitiveness.

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Um, very unlikely to win the election,

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but at least try to save as many liberal seats as possible.

Leadership Crisis: Trudeau's Challenges Amidst Resignation

00:00:00 - Rumors have been flying that, Trudeau would be announcing, that he was stepping down mainly because of internal opposition to his leadership has, has grown exponentially over the past few weeks, especially since, the finance minister Christie Freeland was, sort of unceremoniously, demoted. And, she responded by resigning as finance minister,

00:00:35 - of Trudeau in her resignation letter, which, is seen by most observers as being, a death blow for his leadership. I think in large part, in order to try to revive liberal fortunes, they've been very low on the polls for over a year. And, the dismal electoral prospects, unless they can pull back some of that loss support. And I think that the, the,

00:01:03 - It's had no impact whatsoever on the polls. And Freeland was pushing back against that at the time in which she was told that she would no longer be finance minister, and then she resigned. So, you know, the Economics Canada's economy is, is not doing poorly. Of course, like other countries, we've had an affordability crisis. Inflation has been tamed in Canada, there is a criticism of the government, for Canada's low productivity,

Challenges Ahead for Liberal Leadership

00:01:34 - So I don't think the economy is in such bad straits. Although the leader of the opposition, Pierre Paul Yev, likely the next Prime Minister, has been intensely focused on, how the liberals have mismanaged the economy. that's a good question. I mean, it's a very short timeframe to choose a new leader. I think that obviously gives better known and better established candidates, a big advantage over anybody else who might want to contest to the leadership.

00:02:04 - for the leadership or not. He's never held elected political office. He declined to run for the liberals in the last election, declined to replace Freeland as as finance minister. So I don't know how well received his candidacy will be within liberal ranks. partly for that reason, yes, he has a very high profile, a lot of respect internationally and so on, but he hasn't been a political warrior in the trenches and in a short campaign like this that may work against him,

00:02:36 - her prospects were, were all that great. Prior to this episode where she resigned, she had been under some criticism for being a poor political communicator, both by the media as well as by, liberal backbenchers who didn't think that she was doing a very good job communicating their government's message. And then she, She resigned under these, these circumstances. And, with her letter of resignation, which was extremely pointed

Emerging Leadership Contenders in the Liberal Party

00:03:09 - her standing, frankly. she was very well received within the liberal caucus, when she attended caucus after her resignation. And she has made it clear that she intends to seek leadership. She said this wasn't the end of the road for her. I think that that's the message that she will be a contender and she'll be one of the main contenders. There are others, the current finance minister, very close confidant of, of, Justin Trudeau,

00:03:42 - for a very long period of time, very respected for his political skills. he'll, he'll be a leadership candidate, I believe as well. there are some others, a Quebec candidate, certainly there should be, one or two Quebec candidates. There was a big New York Times profile of Melanie Jolie, who is the current, foreign affairs minister for Canada, which gave her, boost in terms of her prospects.

00:04:12 - Francois Philippe Champan is another high profile Quebec minister who, will probably throw his hat in the ring. And there are others, Sean Fraser, Anita and Nan, who are more long shots. So I think there, there will be a considerable field of candidates and there wouldn't be anytime really to go about raising money or signing up new members. All of that is out the window. We're talking about maybe a two month period for this leadership convention to happen, if

Leadership Challenges Amid Trump's Tariff Threats

00:04:43 - we'll find out the details shortly. so it, it, that at least does level the playing field a bit, you know, and, who knows, with, with these, leadership conventions. So we might see a surprise in the end. That's just the half of it, actually. I mean, yes, that's going to be a huge challenge. you know, Trump is, blustering away as he does down there, threatening very severe, tariffs against Canadian products.

00:05:16 - that any tariffs against Canadian products going to the United States, inevitably rebounds to hurt American companies and producers and consumers. So, you know, there's also some speculation that, this is a negotiating tactic on Trump in order to get Canada to do other things. He wants it to do, you know, pump up defense spending, be more vigilant on the borders with the United States and, and so and so and so, so that,

00:05:48 - he's very unpredictable character and it will have a big impact, I think, on whoever takes over trying to respond to Trump. Trudeau is staying on until, a new leader is chosen. So he at least has long experience with dealing with Trump, and that that may be a good thing, for Canada, at this point. But the liberals are in a situation now, we're really, it's to save the furniture election for them.

Reviving Liberal Fortunes Amidst Electoral Challenges

00:06:21 - to pull the liberals out of the doldrums. They've been in it. I mean, they're so far behind. More than 20 points behind for the last year is highly unlikely that any new candidate will be able to turn things around. The main thing is to try to prevent the liberals, from suffering the same fate as Brian Ma Rooney's, progressive conservatives. In 1993, he handed over poison chalice to a new leader and the party was decimated and they never recovered from that.

00:07:09 - if, things go really badly for them. So any new leader, the first task for them will be try to save the furniture, bring the liberals back to some sort of semblance of competitiveness. very unlikely to win the election, but at least try to save as many liberal seats as possible.

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