March 4, 2019 / 6:46 PM / 3 months ago

UPDATE 5-Second Canadian minister quits over scandal, Trudeau taking it 'seriously'

(Adds quotes by prime minister, foreign minister staying in Cabinet, unhappy legislator)

By David Ljunggren and Julie Gordon

OTTAWA, March 4 (Reuters) - In a serious blow to Canadian Prime Minister Justin Trudeau, a second member of his Cabinet resigned on Monday, saying she had lost confidence in how the government had dealt with an escalating political scandal.

The departure of recently appointed Treasury Board President Jane Philpott, who was in overall charge of government spending, deprives Trudeau of another powerful female Cabinet minister just months ahead of an election that polls show he could lose.

Philpott expressed unhappiness about the government's response to allegations that officials inappropriately pressured former Justice Minister Jody Wilson-Raybould last year to help major construction company SNC-Lavalin Group Inc avoid a corruption trial.

"Sadly, I have lost confidence in how the government has dealt with this matter and in how it has responded to the issues raised," Philpott said in a statement.

Trudeau told a Liberal Party rally in Toronto that he was disappointed but understood why she had left.

"Concerns of this nature must be taken seriously and I can ensure you that I am," said Trudeau, who did not specifically address Philpott's stated reasons for leaving. He also thanked her for serving in his Cabinet - something he notably did not do when Wilson-Raybould quit.

Philpott is a close friend of Wilson-Raybould, who resigned on Feb. 12 after she was unexpectedly demoted in January. Wilson-Raybould said last week she was convinced her refusal to help SNC-Lavalin was behind the demotion.

Andrew Scheer, head of the official opposition Conservative Party, repeated calls for Trudeau to quit amid the "ethical rot" he said was undermining the rule of law.

The departure of Philpott, who was appointed on Jan. 14, is another setback for a prime minister who came to power in November 2015 promising "sunny ways," more accountability in politics and a greater number of women ministers.

"What should be worrisome for the Trudeau Liberals is that the two Cabinet resignations have been on issues of principle and ethics," said Nanos Research pollster Nik Nanos.

"The second resignation begs the question – what did happen and could there be more resignations," he said by email.

SIGNS OF STRAIN

Other members of the government, including Finance Minister Bill Morneau and Foreign Minister Chrystia Freeland, said they would stay in the Cabinet.

Philpott said evidence of efforts by politicians and officials to pressure Wilson-Raybould had raised serious concerns. Wilson-Raybould tweeted to Philpott that "you are a leader of vision and strength and I look forward to continuing to work alongside you."

Philpott, 58, was widely regarded as one of the best of Trudeau's Cabinet ministers. She previously served as minister of health and minister of indigenous services.

Most Liberal members of parliament have so far backed Trudeau but there are signs of strain.

Legislator Wayne Long said he was "deeply troubled" by Philpott's departure and called for a full public inquiry into the matter, something Trudeau has rejected.

Celina Caesar-Chavannes, a parliamentarian who is not seeking re-election, tweeted that "when you add women, please do not expect the status quo. Expect us to make correct decisions, stand for what is right and exit when values are compromised."

Gerald Butts, who quit as Trudeau's principal secretary last month over the SNC-Lavalin affair, will testify to the House of Commons justice committee on Wednesday.

In her testimony to the committee last week, Wilson-Raybould singled out Butts as one official who tried particularly hard to change her mind. Under questioning, she said she did not consider officials had broken any laws. (Reporting by Julie Gordon and David Ljunggren; Editing by James Dalgleish and Peter Cooney)

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