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Prime Minister Justin Trudeau.


Prime Minister Justin Trudeau is in the midst of planning a cabinet shake-up as the Liberal government gears up for the challenge of dealing with an unpredictable Donald Trump presidency and his espousal of protectionist policies.

Mr. Trudeau and top advisers have been meeting over the past week on the design of the new cabinet team that could be unveiled as early as Tuesday, according to a government insider. The new cabinet will hold its first retreat in Calgary on Jan. 23 and 24.

The retreat will focus on job creation and how to deal with the uncertainty over Mr. Trump's economic agenda. Mr. Trump, who will be be sworn in as U.S. president on Jan. 20, has called for a tax overhaul, massive infrastructure spending and tough trade policies to create jobs for American workers.

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Related: PMO held talks with Trump team to avert trade war

Read more: Trudeau hails Canada-U.S. trade in video welcome to Congress

Immigration Minister John McCallum is expected to leave cabinet for a critical role as Canada's envoy to China at a time when the Trudeau government is embarking on free-trade negotiations.

"Canada is not alone among many countries that are in a state of such suspense to see what the Trump administration's policies will ultimately be," Mr. Trudeau's former foreign policy adviser, Roland Paris, told The Globe and Mail. "I am cautiously optimistic about the prospects for a constructive relationship between the Canadian government and the Trump administration, but the stakes are so high that we have to take this extremely seriously."

Senior officials are being tight-lipped about who will be in or out of the cabinet remake and what ministers are destined for greater responsibilities in dealing with the Trump administration. Up to nine people could be in line to be shuffled, one source said.

It is very possible that Foreign Affairs Minister Stéphane Dion will be demoted or moved out entirely. He is known to have a cranky personality, which might not sit well with the Trump government and the nominee for U.S. secretary of state, Rex Tillerson, the former CEO of Exxon Mobil Corp. Mr. Dion has had a bumpy ride at Foreign Affairs, where he was often put on the defensive for his handling of the $15-billion Saudi arms deal.

Chrystia Freeland, the International Trade Minister, could be promoted to foreign affairs, although Mr. Trudeau might want to keep her in the current job so she can assume the key role of renegotiating the North American free-trade deal.

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Ms. Freeland, an economics writer who has lived in the United States, Britain and Russia, has won high marks for her effort to negotiate and win approval for the Canada-European Union free-trade deal. She also chairs the cabinet committee on Canada-U.S. relations.

"Chrystia Freeland has done a terrific job as Minister of International Trade. She took a very difficult task of concluding the [Canada-EU] negotiations, tackled it and finished it. That was impressive," said Mr. Paris, who noted he did not have any inside knowledge of the cabinet shuffle.

Transport Minister Marc Garneau, a former astronaut who lived for nine years in Houston, could easily fit the role of foreign minister. He is a solid performer with a strong understanding of the U.S. political system.

Sources say Labour and Employment Minister MaryAnn Mihychuk will be replaced by Patty Hajdu, currently Status of Women's Minister. Somalia-born MP Ahmed Hussen is  expected to take over Mr. McCallum's portfolio.

Other possible ministers who might face demotions are Democratic Institutions Minister Maryam Monsef and Veterans Affairs Minister Kent Hehr. Sources say rookie MP François-Philippe Champagne, who is now the parliamentary secretary to Finance Minister Bill Morneau, is expected to be named to cabinet. There is speculation he could get international trade if Ms. Freeland moves to global affairs.

Some other Liberal MPs who are expected to receive promotions are Marco Mendicino, a former Crown prosecutor who represents a Toronto riding, and Burlington's Karina Gould, who is parliamentary secretary to the Minister for International Development. Toronto MP Adam Vaughan may also be appointed.

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During the planning for a new cabinet, Mr. Trudeau's principal secretary Gerald Butts, chief of staff Katie Telford and Canada's ambassador to the United States, David MacNaughton, have met several times in Washington for what have been described as bridge-building talks with Jared Kushner, Mr. Trump's son-in-law, and Stephen Bannon, chief strategist and senior counsellor to the incoming Republican president.

Peter Navarro, who will lead a White House office overseeing U.S. industrial policy as Mr. Trump moves to reshape trade relations with a protectionist bent, also joined in some of the discussions. Mr. Navarro advocated a more aggressive stand toward U.S. trade partners, particularly China and Mexico.

The talks are part of a charm offensive at the senior-most levels in Ottawa to shield Canada's economy from the impact of protectionist policies espoused by Mr. Trump against China and Mexico, including his pledge to renegotiate or pull out of the 1994 North American free-trade agreement.

The Prime Minister has also enlisted former Progressive Conservative prime minister Brian Mulroney and Derek Burney, Canada's past ambassador to Washington who played a key role in the 1989 Canada-U.S. free-trade agreement, to open doors in D.C. for the Liberal government.

The Canadian strategy includes outreach efforts to U.S. senators and congressional representatives in the 35 northern states. In addition, Mr. Trudeau and Mr. MacNaughton appeared in a video message to the U.S. Congress last week stressing the strong economic relationship between the two countries, including the fact Canada is the largest foreign market for U.S.-made goods and services.

With a report from Daniel Leblanc

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