Freeland said she felt she had to step down from her position because the prime minister had lost faith in her and wanted to assign her to a new role after she fought back against some of his policy decisions.

Her departure from Trudeau's front bench reignited calls for Trudeau to step down and call an election, though no such vote is imminent with MPs poised to break soon for the holidays.

LeBlanc was sworn in as finance minister late Monday at a ceremony at Rideau Hall, just as the Liberal caucus was meeting halfway across town.

In her resignation letter that morning, Freeland said she and Trudeau found themselves at odds for weeks about "the best path forward for Canada."

She said the country faces a "grave challenge" with the incoming Donald Trump administration and its threat of 25 per cent tariffs.

"We need to take that threat extremely seriously. That means keeping our fiscal powder dry, so we have the reserves we may need for a coming tariff war. That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment."

Conservative Leader Pierre Poilievre said Trudeau has lost control of the government and repeated calls for an election.

"The government of Canada itself is spiralling out of control, right before our eyes, and at the very worst time," he told reporters on Parliament Hill.

Poilievre said it's up to NDP Leader Jagmeet Singh, whose caucus has supported the minority Liberals in key confidence votes throughout this fall, to force an election.

Singh called on Trudeau to step down as Liberal leader, saying Canadians are struggling with the cost of living and face Trump's dangerous tariff threats, while the Liberals are "fighting themselves instead of fighting for Canadians."

Yet he refused to say if he is now ready to bring down the minority government in a House of Commons vote, repeatedly telling reporters that "all options are on the table."

Singh's New Democrats have voted with the Liberals to defeat Conservative non-confidence motions in the House three times this fall.

Bloc Quebecois Leader Yves-Francois Blanchet said the prime minister should dissolve Parliament and call an election early in the new year centred on who is best positioned to take on the Trump White House.

"Mr. Trudeau's government is over. He must acknowledge that and act accordingly," Blanchet said.

Liberal MP Chad Collins, who signed a letter in October with 23 of his Liberal caucus colleagues calling on Trudeau to step down, re-upped his demand, and so too did vocal Liberal dissenter Wayne Long.

A senior government official not authorized to speak publicly on the matter told The Canadian Press that the prime minister does not intend to resign, but all other options are being considered, including proroguing Parliament.

Freeland's resignation came just as she was to deliver the fall economic statement, showing a ballooning deficit of 61.9-billion dollars -- far beyond what the government had promised for the year.

The financial package announced with her economic snapshot contains measures designed to respond to demands made by Trump to beef up the border.

Freeland's move to step down also comes on the heels of a government decision to grant consumers a temporary tax holiday on GST.

Neither Freeland nor Trudeau were in the House of Commons for question period Monday, and Poilievre made sure to needle the government for not having a finance minister.

"I have a question for the finance minister," he said, looking across to Freeland's empty seat. "Who are you?"

Freeland's bombshell announcement landed just as Housing Minister Sean Fraser was holding his own news conference to announce he will not seek re-election, citing a need to be closer to his family.

Fraser is seen internally as a good communicator and a top performer in cabinet. His name has even been floated at times in speculation as someone who could one day replace Trudeau.

Cabinet ministers were terse reacting to the news but the few who spoke to media on their way into a cabinet meeting expressed confidence in the prime minister and said they will stand by the fiscal update.

Treasury Board President Anita Anand told reporters outside the cabinet room Monday that Freeland is a good friend to her and that "this news has hit me really hard."

Labour Minister Steven MacKinnon said he regrets Freeland's departure, but the government "remains very strong with a number of very capable ministers and the prime minister."

Trudeau's Liberals have trailed behind Poilievre's Conservative party for more than a year now as an affordability crisis grips the nation.

That's put the Trudeau government consistently on the ropes and on track to lose power in the next election -- which must happen before next October -- unless something changes to improve his party's fortunes.

Rumours of a cabinet shuffle have been swirling in Ottawa since four cabinet ministers had announced they won't be running in the next campaign.

Pablo Rodriguez also stepped down as transport minister and quit the Liberal caucus in September to run for the Quebec Liberal leadership.

Randy Boissonnault left his cabinet role as employment minister last month amid a scandal that ballooned from his claims of Indigenous identity and his business dealings.

At the premiers' meeting in Mississauga, Ontario Premier Doug Ford was asked if he has confidence in Trudeau to lead the Team Canada effort against Trump's tariff threat. Ford replied, "I have faith in the premiers."

This report by The Canadian Press was first published Dec. 16, 2024.