OTTAWA (Reuters) – Chrystia Freeland, a former journalist who was Canada’s lead negotiator for a new North American trade deal, was named the country’s first female finance minister on Tuesday after the abrupt resignation of her predecessor, as the government shifted focus to the long-term economic recovery from the coronavirus pandemic.
Freeland, 52, who is Prime Minister Justin Trudeau’s deputy and widely seen as his likely successor for leadership of the Liberal Party, was appointed after Bill Morneau stepped down as finance minister on Monday amid friction with the prime minister over spending policies.
Prior to being appointed deputy prime minister and minister of intergovernmental affairs in 2019, Freeland was Canada’s foreign minister and minister for international trade. In that role, she renegotiated the North American Free Trade Agreement, now known as the United States-Mexico-Canada Agreement (USMCA).
While popular with business and trade groups, Freeland does not have the traditional corporate background of many of her predecessors in the finance portfolio, which could be viewed as a risk for markets as Canada grapples with a coronavirus-induced recession.
But her close ties to Trudeau combined with the government’s focus on the coronavirus response and expected higher spending to boost the economic recovery will lead to few nasty surprises for markets, analysts said.
“At a time of uncertainty, it’s the best choice for the role in the wake of Morneau’s resignation,” said Scotiabank economist Derek Holt, noting that Freeland was a financial markets policy wonk.
“She has international brand name recognition, she did well representing Canada against the protectionist U.S. administration in the trade talks. She’s a good communicator.”
Prior to his exit, Morneau in July announced that Canada would post its largest deficit since the Great Depression amid billions in emergency aid spending in response to the COVID-19 pandemic.
With the deficit already expected to top C$343.2 billion ($260.4 billion), Reuters reported on Sunday that Morneau had clashed with Trudeau over coronavirus-related spending and disagreed on the scope and scale of proposed green initiatives.
Freeland is seen as more willing to back up Trudeau’s ambitions to use the crisis as an opportunity to push ambitious environmental spending to start weaning Canada’s oil-dependent economy off fossil fuels.
“Ms. Freeland does have that record of being sort of a big thinker … and interested in a big agenda,” said Jonathan Malloy, a political science professor at Carleton University in Ottawa. “The job of the finance minister is to be a bit skeptical of big spending programs and big new things. So, it’s going to be really interesting.”
In 2012, Freeland published her book ‘Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else’ highlighting how the wealthiest 0.1% of the population are amassing colossal fortunes on the backs of the masses.
Before entering politics in 2013, she worked as a journalist and in senior editorial roles with several media companies, including the Financial Times, the Globe and Mail, and Reuters News.
Freeland grew up in Alberta and was tasked with quelling a growing sense of Western Canadian alienation after the 2019 election, when the Liberals failed to win a single seat in the oil-producing provinces of Saskatchewan and Alberta.
She has stood behind Trudeau in the face of numerous ethics investigations, including a recent scandal over his role in a government decision to appoint a charity with ties to his family to manage a multi-million dollar student grant program.
($1 = 1.3179 Canadian dollars)
(Additional reporting by Kelsey Johnson in Ottawa and Denny Thomas in Toronto; Editing by Paul Simao)