Predecessor Bill Morneau was embroiled in controversy over payments from WE Charity and had clashed with PM over how to reboot economy

Parliament suspended as Trudeau prepares Covid-19 recovery plan

Prime Minister Justin Trudeau tapped Chrystia Freeland to be Canada’s first woman finance minister on Tuesday as an ethics scandal that clipped her predecessor’s wings reverberates through the government.

Freeland received a standing ovation after being sworn in at a small ceremony at Rideau Hall, the official residence of Governor General Julie Payette in Ottawa. Guests socially distanced, wore face masks and Freeland greeted Trudeau with an elbow bump after taking the oath of office.

Freeland, 52, has held key posts in the Liberal government including deputy prime minister – a role she keeps – and previously as foreign minister, as well as leading free trade talks with the US and Mexico.

The former journalist, first elected in 2015 and well-respected by her peers, takes on the top finance job as Canada goes through its worst economic crisis since the Second World War.

After five years in the post, Bill Morneau – under pressure from opposition parties – announced his surprise resignation from politics late Monday.

He told a news conference he was leaving to pursue the job of secretary general of the Organisation for Economic Co-operation and Development (OECD).

Tuesday’s cabinet shuffle also saw Dominic Leblanc take back his job as intergovernmental affairs minister from Freeland, after a fight with cancer.

The changes in the upper echelons of Canadian power allow Trudeau to reset the agenda as his government pivots to lifting Canada out of an economic slump following a months-long nationwide pandemic lockdown.

Parliament has been suspended until September 23, when Trudeau is due to formally outline his new recovery plan. It will be subject to a confidence vote and if the minority Liberal administration loses, Canada will head into an election.

The two-month shutdown of parliament also effectively ends parliamentary committee inquiries into the WE Charity scandal dogging his Liberals.

“It seems like the government is trying to press the reset button, and try to perhaps, put the charity affair behind them and get a fresh start with the electorate,” Stephanie Chouinard, a politics professor at the Royal Military College of Canada in Kingston, told public broadcaster CBC.

In recent weeks, local media had reported a growing rift between Trudeau and Morneau on how to reboot the Canadian economy weakened by the new coronavirus pandemic, as the government budget deficit soared to more than C$340 billion (US$257 billion).

Morneau was also being investigated by Canada’s ethics commissioner over his ties to the WE Charity tasked with distributing pandemic relief to young Canadians.

Trudeau too is being probed over his family ties to the charity, which paid his wife, brother and mother for speaking engagements. Both Trudeau and Morneau apologised last month for the affair, saying they erred in not recusing themselves from discussions about awarding the roughly C$500 million contract to WE Charity to distribute student scholarship funds.

Morneau faced calls to step down after he revealed he had only recently paid back more than C$41,000 in travel expenses to the charity, where one of his daughters works.

The reimbursement check – which was a bit less than the average Canadian annual salary – was meant to cover expenses incurred by the charity over two humanitarian trips he and his family took in 2017.

The scholarship programme has been cancelled but the controversy remains.

In his final public remarks as an MP, Morneau denied that his departure was linked to the scandal. But opposition parties remain sceptical, saying he was made a scapegoat.

“We all know it was the scandal that brought Mr Morneau down,” Conservative MP Pierre Poilievre said on Tuesday.

Bloc Quebecois leader Yves-Francois Blanchet and New Democratic Party leader Jagmeet Singh accused Trudeau of “throwing his finance minister (Morneau) under a bus”.

Blanchet said the Bloc would seek to topple Trudeau’s minority government in the coming months and trigger snap elections, but it would need the support of at least two other parties to do so.

The Tories are set to elect a new leader this week, while the New Democrats and Greens have rejected going to the polls in the midst of a global health crisis that has claimed the lives of more than 9,000 Canadians. Opinion polls show the Liberals have been damaged by the scandal, but are still positioned well for an early election.

Additional reporting by Reuters

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