TORONTO (AP) — Former central banker Mark Carney will become Canada’s next prime minister after the governing Liberal Party elected him its leader Sunday as the country deals with U.S. President Donald Trump’s trade war and annexation threat, and a federal election looms.

Carney, 59, replaces Prime Minister Justin Trudeau, who announced his resignation in January but remains prime minister until his successor is sworn in in the coming days.

Carney navigated crises when he was the head of the Bank of Canada and when in 2013 he became the first noncitizen to run the Bank of England since it was founded in 1694. His appointment won bipartisan praise in the U.K. after Canada recovered from the 2008 financial crisis faster than many other countries.

The opposition Conservatives hoped to make the election about Trudeau, whose popularity declined as food and housing prices rose and immigration surged.

Trump’s trade war and his talk of making Canada the 51st U.S. state have infuriated Canadians, who are booing the American anthem at NHL and NBA games. Some are canceling trips south of the border, and many are avoiding buying American goods when they can.

The surge in Canadian nationalism has bolstered the Liberal Party’s chances in a parliamentary election expected within days or weeks.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

TORONTO (AP) — Canada’s governing Liberals will announce a replacement for Prime Minister Justin Trudeau on Sunday as the country deals with U.S. President Donald Trump’s tariff threats and as a federal election looms.

Liberal Party members look set to pick former central bank governor Mark Carney as the new party leader and Canada’s next prime minister in a vote to be announced on Sunday evening.

Carney, 59, navigated crises when he was the head of the Bank of Canada and when in 2013 he became the first noncitizen to run the Bank of England since it was founded in 1694. His appointment won bipartisan praise in the U.K. after Canada recovered from the 2008 financial crisis faster than many other countries.

The opposition Conservatives hoped to make the election about Trudeau, whose popularity declined as food and housing prices rose and immigration surged. Trudeau announced his resignation in January, but remains prime minister until a successor is chosen and sworn in. Election laws mandate a general election before the fall, but one is expected this spring.

Trump’s trade war and his talk of making Canada the 51st U.S. state have infuriated Canadians, who are booing the American anthem at NHL and NBA games. Some are canceling trips south of the border, and many are avoiding buying American goods when they can.

The surge in Canadian nationalism has bolstered the Liberal Party’s chances in a parliamentary election expected within days or weeks, and Liberal showings have been improving steadily in opinion polls.

“We have made this the greatest country in the world and now our neighbors want to take us. No way,” Carney said.

After decades of bilateral stability, the vote on Canada’s next leader now is expected to focus on who is best equipped to deal with the United States.

Carney has picked up one endorsement after another from Cabinet ministers and members of Parliament since declaring his candidacy in January. He is a highly educated economist with Wall Street experience who has long been interested in entering politics and becoming prime minister, but he lacks political experience.

The other top Liberal leadership candidate is former Deputy Prime Minister Chrystia Freeland. Trudeau told Freeland in December that he no longer wanted her as finance minister, but that she could remain deputy prime minister and the point person for U.S.-Canada relations. Freeland resigned shortly after, releasing a scathing letter about the government that proved to be the last straw for Trudeau.

The party is also expected to pay tribute to Trudeau on Sunday evening. More than 151,000 Liberal members voted.

“There is a remarkable wave of patriotism across our country,” Freeland said. “All of us have one message for Donald Trump tonight. Canada will never be the 51st state.”

The new leader is expected to trigger an election shortly afterward. Either the new Liberal party leader will call one, or the opposition parties in Parliament could force one with a no-confidence vote later this month.

TORONTO (AP) — Canadian Prime Minister Justin Trudeau faced the biggest test of his political career after Finance Minister Chrystia Freeland, long one of his most powerful and loyal ministers, resigned from the Cabinet on Monday.

The stunning move raised questions about how much longer the prime minister of nearly 10 years — whose popularity has plummeted due to concerns about inflation and immigration — can stay on as his administration scrambles to deal with incoming U.S. President-elect Donald Trump.

“The Great State of Canada is stunned as the Finance Minister resigns, or was fired, from her position by Governor Justin Trudeau,” Trump posted on Truth Social. “Her behavior was totally toxic, and not at all conducive to making deals which are good for the very unhappy citizens of Canada. She will not be missed!!!”

Trump previously trolled Trudeau by calling Canada a state. And during his first term in his office — when he renegotiated the free trade deal with Canada and Mexico — Trump said Freeland wasn’t liked.

Trudeau swiftly named longtime ally and close friend Dominic LeBlanc, the pubic safety minister who recently joined him at dinner with Trump at Mar-a-Lago, to replace Freeland. Freeland did not make that trip.

After being sworn in, LeBlanc told reporters he and Trudeau are focused on the cost of living facing Canadians and on finding common ground with Trump on border security and economic issues.

“It’s not been an easy day,” Trudeau later told a room of party supporters. He called it one of his party’s “toughest days” but he did not say what he planned to do.

Jagmeet Singh, leader of the opposition New Democratic Party which Trudeau’s ruling Liberals have relied upon to stay in power, called for him to resign earlier Monday.

“He has to go,” NDP leader Singh said.

The main opposition Conservatives have not called for Trudeau’s resignation but demand an election.

But a no confidence vote in the government is not imminent with Parliament about to break for the holidays .

Freeland, who was also deputy prime minister, said Trudeau had told her on Friday he no longer wanted her to serve as finance minister and offered her another role in the Cabinet. But she said in her resignation letter that the only “honest and viable path” was to leave the Cabinet.

“For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada,” Freeland said.

Freeland and Trudeau disagreed about a two-month sales tax holiday and 250 Canadian dollar ($175) checks to Canadians that were recently announced. Freeland said Canada is dealing with Trump’s threat to impose sweeping 25% tariffs and should eschew “costly political gimmicks” it can “ill afford.”

“Our country is facing a grave challenge,” Freeland said in her letter. “That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war.”

A Liberal party official said Freeland was offered a position as minister in charge of Canada-U.S. relations without portfolio and without a department. The official, who spoke on condition of anonymity because of not being authorized to speak publicly on the matter, said the position would have been in name only and wouldn’t have come with any of the tools Freeland previously had when she negotiated the trade with the United States.

Freeland, who chaired a Cabinet committee on U.S. relations, had been set to deliver the fall economic statement and likely announce border security measures designed to help Canada avoid Trump’s tariffs. Trump has threatened to impose a 25% tax on all products entering the U.S. from Canada and Mexico unless the neighbors stem the numbers of migrants and drugs.

The statement shows a much larger deficit than expected for the fiscal year and more than a billion for border security.

Trudeau has said he plans on leading the Liberal Party into the next election, but many party members have said they don’t want him to run for a fourth term, and Freeland’s departure was a huge blow.

Trudeau met with his lawmakers on Monday evening. Later, most of them brushed past reporters, declining to say what was said in the meeting.

Liberal lawmaker Chad Collins said they were “not united.”

“There’s still a number of our members that want a change in leadership. I’m one of them,” he said. “I think the only path forward for us is to choose a new leader.”

No Canadian prime minister in more than a century has won four straight terms.

The federal election has to be held before October. The Liberals must rely on the support of at least one other major party in Parliament, because they don’t hold an outright majority themselves. If NDP pulls support, an election can be held at any time.

Singh said all options are on the table.

Trudeau channeled the star power of his father, late Prime Minister Pierre Trudeau, in 2015, when he reasserted the country’s liberal identity after almost a decade of Conservative Party rule.

But Canadians are now frustrated by the rising cost of living and other issues, including immigration increases following the country’s emergence from the COVID-19 pandemic.

Justin Trudeau’s legacy includes opening the doors wide to immigration. He also legalized cannabis and brought in a carbon tax intended to fight climate change.

Freeland also said in her letter that Canadians “know when we are working for them, and they equally know when we are focused on ourselves. Inevitably, our time in government will come to an end.”

Separately, Trudeau has been trying to recruit Mark Carney, the former head of the Bank of England and Bank of Canada, to join his government. Carney has long been interested in entering politics and becoming the leader of the Liberal Party. LeBlanc’s appointment to finance suggests that won’t happen.

Daniel Béland, a political science professor at McGill University in Montreal, called Freeland’s resignation a political earthquake.

“This is clearly a minority government on life support but, until now, the (opposition) NDP has rejected calls to pull the plug on it,” Béland said. “It’s hard to know whether this resignation will force the NDP to rethink its strategy.”

TORONTO (AP) — Prime Minister Justin Trudeau told Donald Trump that Americans would also suffer if the president-elect follows through on a plan to impose sweeping tariffs on Canadian products, a Canadian minister who attended their recent dinner said Monday.

Trump threatened to impose tariffs on products from Canada and Mexico if they don’t stop what he called the flow of drugs and migrants across their borders with the United States. He said on social media last week that he would impose a 25% tax on all products entering the U.S. from Canada and Mexico as one of his first executive orders.

Canadian Public Safety Minister Dominic LeBlanc, whose responsibilities include border security, attended a dinner with Trump and Trudeau at Trump’s Mar-a-Lago club on Friday.

Trudeau requested the meeting in a bid to avoid the tariffs by convincing Trump that the northern border is nothing like the U.S. southern border with Mexico.

“The prime minister of course spoke about the importance of protecting the Canadian economy and Canadian workers from tariffs, but we also discussed with our American friends the negative impact that those tariffs could have on their economy, on affordability in the United States as well,” LeBlanc said in Parliament.

If Trump makes good on his threat to slap 25% tariffs on everything imported from Mexico and Canada, the price increases that could follow will collide with his campaign promise to give American families a break from inflation.

Economists say companies would have little choice but to pass along the added costs, dramatically raising prices for food, clothing, automobiles, alcohol and other goods.

The Produce Distributors Association, a Washington trade group, said last week that tariffs will raise prices for fresh fruit and vegetables and hurt U.S. farmers when the countries retaliate.

Canada is already examining possible retaliatory tariffs on certain items from the U.S. should Trump follow through on the threat.

After his dinner with Trump, Trudeau returned home without assurances the president-elect will back away from threatened tariffs on all products from the major American trading partner. Trump called the talks “productive” but signaled no retreat from a pledge that Canada says unfairly lumps it in with Mexico over the flow of drugs and migrants into the United States.

“The idea that we came back empty handed is completely false,” LeBlanc said. “We had a very productive discussion with Mr. Trump and his future Cabinet secretaries. … The commitment from Mr. Trump to continue to work with us was far from empty handed.”

Joining Trump and Trudeau at dinner were Howard Lutnick, Trump’s nominee for commerce secretary, North Dakota Gov. Doug Burgum, Trump’s pick to lead the Interior Department, and Mike Waltz, Trump’s choice to be his national security adviser.

Canada’s ambassador to the U.S., Kirsten Hillman, told The Associated Press on Sunday that “the message that our border is so vastly different than the Mexican border was really understood.” Hillman, who sat at an adjacent table to Trudeau and Trump, said Canada is not the problem when it comes to drugs and migrants.

On Monday, Mexico’s president rejected those comments.

“Mexico must be respected, especially by its trading partners,” President Claudia Sheinbaum said. She said Canada had its own problems with fentanyl consumption and “could only wish they had the cultural riches Mexico has.”

Flows of migrants and seizures of drugs at the two countries’ border are vastly different. U.S. customs agents seized 43 pounds of fentanyl at the Canadian border during the last fiscal year, compared with 21,100 pounds at the Mexican border.

Most of the fentanyl reaching the U.S. — where it causes about 70,000 overdose deaths annually — is made by Mexican drug cartels using precursor chemicals smuggled from Asia.

On immigration, the U.S. Border Patrol reported 1.53 million encounters with migrants at the southwest border with Mexico between October 2023 and September 2024. That compares to 23,721 encounters at the Canadian border during that time.

Canada is the top export destination for 36 U.S. states. Nearly $3.6 billion Canadian (US$2.7 billion) worth of goods and services cross the border each day. About 60% of U.S. crude oil imports are from Canada, and 85% of U.S. electricity imports as well.

Canada is also the largest foreign supplier of steel, aluminum and uranium to the U.S. and has 34 critical minerals and metals that the Pentagon is eager for and investing for national security.