Bill Morneau says he is leaving politics and has put his name forward as a candidate to lead the Organisation for Economic Co-operation and Development (OECD).

Trudeau thanked Morneau for his five years as finance minister and said on Monday that "Canada will vigorously support his bid to lead" the OECD.

Morneau and Trudeau have reportedly butted heads amid spending to backstop the pandemic-hammered economy. Morneau said he was not asked to resign but added he was no longer the appropriate the person for the job.

Canada's government is predicting a historic $C343 billion (A360 billion) deficit for 2020-21, resulting from its economic stimulus plans to battle the impact of COVID-19.

Recent news that Mark Carney, a former governor of the Bank of Canada and the Bank of England, was advising Trudeau during the pandemic fuelled speculation Morneau might be replaced.

Carney and Deputy Prime Minister Chrystia Freeland would be considered favourites to replace Morneau but a senior government official told the Associated Press that Carney was not a potential candidate to replace him.

Opposition parties have been calling for Morneau's resignation over allegations he had a conflict of interest in a controversy with WE Charity, a scandal that has also touched Trudeau.

Trudeau has said he should have recused himself from a cabinet decision to award a contract to WE Charity to administer money to students having trouble finding work due to the pandemic.

The program came under scrutiny after it was revealed that WE Charity, an organisation Trudeau's family has worked for, was chosen to administer it.

Trudeau's wife, brother and mother have been paid a combined $C300,000 for speaking at a number of WE events.

Australian Associated Press