Canada PM shuffles Cabinet, seeks to reduce reliance on U.S.

OTTAWA (Reuters) - Canadian Prime Minister Justin Trudeau shuffled his Cabinet on Wednesday ahead of a challenging 2019 election, stressing the need to diversify trade away from the United States while leaving key ministers in place.

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Polls show the ruling Liberals are facing an increasing threat from the official opposition Conservatives, and Trudeau made 11 changes to freshen up his front bench.

In a move designed to shore up domestic support, trade minister Francois-Philippe Champagne was shifted to the infrastructure portfolio, where he will oversee plans to spend billions of dollars on major projects.

This should allow Champagne - one of the government’s dynamic performers - to spend more time in his home province of Quebec, where Liberals say they must gain seats to stand a chance of keeping their Parliamentary majority in October 2019.

A Nanos Research poll released on Tuesday put the Liberals at 37 percent and the Conservatives at 35 percent, indicating that if an election were held now, Trudeau would end up with a weakened minority government.

This would crimp his agenda, which focuses on issues such as increased governmental spending, environmental initiatives and boosting gender equality.

Champagne’s move will have little immediate impact on trade policy, which is dominated by the possibility of U.S. auto tariffs and the future of the North American Free Trade Agreement. Foreign Minister Chrystia Freeland is in charge of ties with the United States, including NAFTA.

The strains with Washington show the risks of relying so much on the United States, which takes 75 percent of all Canadian goods exports.

“We need to ensure that we are not as dependent on the United States. Promoting small businesses to export more, ensuring that we are diversifying our trade is a huge responsibility for this government,” Trudeau told reporters.

Champagne’s former department has therefore been renamed as the ministry of international trade diversification. It will be led by Jim Carr, previously minister of natural resources.

In the last year Canada has signed free trade deals with the European Union and 10 Asia-Pacific nations.

Freeland and Finance Minister Bill Morneau are staying in their positions, as reported by Reuters on Tuesday.

Senior Conservative legislator Lisa Raitt said the shuffle was “a desperate attempt” to hit the reset button.

Trudeau, who Raitt says has botched the job of handling migrants streaming across the U.S. border, created a minister in charge of border security and irregular migration.

Reporting by David Ljunggren; Editing by Catherine Evans, Dan Grebler and Jonathan Oatis