Canada's Trudeau talked with Carney about joining government, newspaper says

OTTAWA (Reuters) -Canadian Prime Minister Justin Trudeau met with former Bank of Canada Governor Mark Carney last week about eventually joining his government, days after the Liberal leader reassured Finance Minister Chrystia Freeland her job was safe, a newspaper reported on Thursday.

After Trudeau's Liberals were upset in a by-election last month in Toronto, speculation has swirled that Freeland, who also serves as deputy prime minister, might lose her finance portfolio because of the perception that her economic policies were failing to win over voters.

Carney, who was the Canadian central bank's chief from 2008 to 2013 and later served as head of the Bank of England, has been frequently mentioned as a possible replacement for Freeland in the finance ministry.

During his talk with Trudeau, Carney was not immediately offered the post of finance minister or any other cabinet position, the Globe and Mail reported, adding that the prime minister has privately assured Freeland she will not be removed.

Trudeau will hold a virtual cabinet meeting on Friday, the newspaper reported, without specifying the agenda.

Ahead of that meeting, Labour Minister Seamus O'Regan announced he was stepping down for personal reasons and that he would not seek reelection.

"These were difficult decisions," O'Regan said in a statement. "But, ultimately, my family comes first. I need to be a better husband, son, uncle, and friend, and this job means, and deserves, a lot of time in order to do it well."

Trudeau in a statement thanked O'Regan and said his replacement, who has not been announced yet, will be sworn in on Friday.

Carney could become a member of the government through a by-election or wait until the next general election, expected to be held by October 2025, the Globe and Mail reported, citing four sources that it did not identify as they were unauthorized to speak on the record.

The prime minister's office and Freeland's office did not respond to requests for comment.

Talk of a cabinet reshuffle surfaced after Trudeau's Liberals last month lost the coveted Toronto-St Paul's constituency to the opposition Conservatives for the first time since 1998. The victory marked the first time since 2015 that the Conservatives have won any seat in Toronto, the country's largest city and key to Trudeau's hold on power.

The loss also raised calls for Trudeau, who has been in power since November 2015, to step down. His approval ratings currently are below 30% for the first time in his nine years in power, according to a poll by the Angus Reid Institute.

During a press conference last week, Trudeau called Freeland "a close friend and an ally" and said he had full confidence in her abilities and the work they were doing together.

When asked if he was in touch with Carney, the Canadian leader said he had been talking to him for years to get him to enter federal politics.

(Reporting by Promit Mukherjee and Ismail Shakil in Ottawa; Editing by Frank McGurty and Paul Simao)