Finance Minister Resigns: Where Does That Leave The Liberal Government?

The resignation of a finance minister is no small matter. For an opposition party, bringing down a finance minister is the equivalent of bagging big game (in the political jungle). For a government, losing a finance minister (because of a rupture in the relationship with a prime minister or over policy disagreements) is a huge blow because a finance minister is the lynch-pin of the government apparatus. Every legislative and policy initiative crosses the minister’s desk, either at inception or implementation.

The relationship of a finance minister and his or her prime minister is the essential one. It need not be cordial; but it has to be constructive and they have to appear as one. When a prime minister and a finance minister can’t hold it together, both are surely at fault. That’s bad enough in normal times. In this fraught moment, this outcome reflects selfishness or foolishness or both. There will always be a certain tension in the relationship; but clashes of personality or over policy are best kept inside the tent.

With so much leaking out about a growing dysfunction, the resignation of Bill Morneau had already been “priced in” (by political observers) as brokers say of the markets. Another way of putting it: Morneau was cooked. As between the Prime Minister and the Finance Minister, both mired in the incomprehensibly stupid We charity mess, if one of them had to go, it was not going to be the Prime Minister looking at himself in the mirror. Bill Morneau had no doubt figured that much out!

The new Finance Minister, Chrystia Freeland, faces unprecedented challenges and opportunities. The good news: with no Budget having been tabled yet this year, she can put her stamp on the Government agenda and not be selling someone else’s ideas. The bad news: the Covid crisis has already saddled the Government with a huge bill that will come due one day and the spending probably ain’t done yet.

Election timing both tempers and enables budgetary adventurism. But the new Finance Minister has to be “the woman with the plan” and very soon. Economic commentators and budget hawks will call for spending caution; but it is unrealistic to think that the new Finance Minister will be brought on board to tie the Prime Minister’s hands as he thinks about spending his way out the hand he has been dealt. In any event, it ain’t no fun to be Minister of Austerity.

The Opposition, including a newly minted Conservative leader out to prove himself, will want to eat the new Minister for lunch. And the Prime Minister’s attractiveness has been wearing thin (once again). Gratitude for his calm fortitude in the darkest days of the Covid crisis will only carry you so far. The next election may be soon and the “ballot question” won’t be about how Covid was handled; but who is considered best to lead Canada in the post-Covid world. Remember, the British people threw out Winston Churchill after their wartime love affair. The new Minister’s first budget will be the last from this Government and this one will be written entirely in the Prime Minister’s Office.

For more information, please contact:
Barry Campbell: barry@campbellstrategies.com