Jane Philpott, who had held several portfolios in Trudeau's cabinet before becoming treasury board president, announced her decision to leave Monday.
In a tweet she said had lost confidence in the government's handling of an inquiry into allegations that officials linked to Trudeau had pressured a former minister to help Quebec-based construction company SNC-Lavalin avoid criminal prosecution.
"The solemn principles at stake are the independence and integrity of our justice system.... Sadly, I have lost confidence in how the government has dealt with this matter and in how it has responded to the issues raised," she said in her resignation letter.
"There can be a cost to acting on one's principles, but there is a bigger cost to abandoning them."
With her resignation she joins Jody Wilson-Raybould, the former minister of justice and attorney general, and Gerald Butts, Trudeau's former top aide, in stepping down.
Wilson-Raybould initially brought the firestorm around Trudeau's government, alleging in testimony to the House Justice Committee in February that she faced "veiled threats" and "sustained" pressure from government officials to intervene in a corruption and fraud case against SNC-Lavalin, one of the world's largest construction and engineering companies.
Second cabinet minister to resign
On Monday, Trudeau thanked his former cabinet secretary for her service, and said that the growing scandal had opened a critical window on the country's political institutions.
"In a democracy like ours, and in a space where we value our diversity so strongly, we're allowed to have disagreements and debate. We even encourage it," he told a crowd at the Liberal Climate Action Rally in Toronto.
"This matter has generated an important discussion -- how democratic institutions, specifically the federal ministry, and the staff and officials who support it, conduct themselves. It is critical and core to all of our principles."
The scandal now threatens to engulf Trudeau's Liberal party ahead of elections scheduled to take place before October this year.
The leader of the opposition Conservatives, Andrew Scheer, said that Philpott's resignation "clearly demonstrates a government in total chaos led by a disgraced prime minister," according to CNN affiliate CTV, calling on other cabinet ministers to either resign or demand Trudeau step down.
"Is this what you got into politics for?" he asked, in a press conference. "If not, it's time for them to stand up and be heard, like Jane Philpott did today."
NPD leader Jagmeet Singh also capitalized on Philpott's move as well, tweeting that her resignation "underscores the need for a public inquiry (into the SNC-Lavalin scandal) now more than ever" and "raises serious questions about PM Trudeau's interference... Canadians deserve a government on their side."
His party is calling for Trudeau to testify under oath about the SNC-Lavalin scandal, CTV reports.
Pressure from overseas
The controversy comes at an unfortunate time for Trudeau, who is currently facing a full-blown diplomatic crisis with China following the arrest of Huawei executive Meng Wanzhou.
Meng is the Chinese technology company's chief financial officer and the daughter of its founder, Ren Zhengfei. At the request of the US, Canada detained her on December 1 to face possible extradition to the US over charges of breaking Iran sanctions.
Beijing has labeled her arrest a political decision and demanded her immediate release.
Shortly after Meng was arrested in Canada, two Canadians in China were detained and now are facing serious charges of spying.
Another Canadian man, imprisoned on drug charges, was rapidly retried in January and sentenced to death.
In a statement Monday, Trudeau said he was "obviously very concerned with this position that China has taken."
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