Prime Minister Justin Trudeau announced his new Cabinet on Wednesday and Chrystia Freeland is moving from foreign affairs to become Canada's deputy prime minister.
Freeland will still oversee Canada-U.S. relations and the new trade agreement with the United States and Mexico that still needs to be ratified.
Trudeau also named Freeland to be intergovernmental affairs minister. The role oversees relations with the provinces at a time of increasing dissatisfaction in western Canada.
"Chrystia and I have worked very closely on some of the biggest files facing Canada, Canada and the world but particularly Canada and the United States," Trudeau said.
"Our ability to work well together on these issues that quite frankly touch national unity, touch energy and the environment, touch relations with all provinces and all regions in this country is an extremely important thing at a time where we see some very different perspectives in the country that need to be brought together," he said.
Trudeau's Liberal party failed to elect one member of Parliament in oil-rich Alberta and Saskatchewan. Voters in the rest of Canada elected members who vowed to tackle climate change.
"The election sent a message from the West to our party and now is a moment when we need to respond by listening really hard," said Freeland, who was born in Alberta.
Freeland called Canada the strongest liberal democracy in the world today but said this is one of the most challenging environments for liberal democracies since World War II. The former journalist said Canada is facing big issues and the country needs to face them united.
Quebec lawyer Francois-Philippe Champagne will leave his current post at the infrastructure ministry to take over from Freeland at foreign affairs. He takes over as Canada speaks robustly in defense of human rights and the international rule of law.
Relations between Canada and China are at the lowest point since the Tiananmen Square massacre after Canada arrested a top executive of Chinese tech giant Huawei on a U.S. extradition request last December.
Beijing detained Canadian ex-diplomat Michael Kovrig and Canadian entrepreneur Michael Spavor on Dec. 10 in an apparent attempt to pressure Canada to release the daughter of Huawei's founder. China has also sentenced two other Canadians to death and suspended imports of Canadian canola.
Bill Morneau remains Canada's finance minister. Former Toronto police chief Bill Blair becomes the country's public safety minister.