(CNN) A scandal is swirling around Canadian Prime Minister Justin Trudeau and his Liberal Party. It could threaten the political future of the country's leader and the rule of the Liberal Party, seven months ahead of national elections.

What happened?

Wilson-Raybould later alleged in testimony to the House Justice Committee that she faced "veiled threats" and "sustained" pressure to help Montreal-based SNC-Lavalin , a major employer in Canada. A conviction would keep the company from getting government contracts for a decade. It has 9,000 employees in Canada and thousands more worldwide.

Resignations

The allegations, denied by Trudeau, sparked national outrage and resignations.

Wilson-Raybould resigned from the Cabinet. She had been moved to minister of Veterans Affairs in January in a Cabinet shuffle and resigned in February.

Gerald Butts, Trudeau's top aide, also resigned in February amid accusations he pressured the former attorney general. He denied the accusations and said he stepped away from the office because "it cannot and should not take one moment away from the vital work the Prime Minister and his office is doing for all Canadians."

Jane Philpott , who had held several portfolios in Trudeau's Cabinet before becoming Treasury Board president, resigned Monday, saying she lost confidence in the government's handling of an inquiry into the allegations of pressure.

The latest

On Wednesday, Butts appeared before the House Justice Committee. He contradicted Wilson-Reybould's claims and said he believed she saw the Cabinet change as a demotion over "her refusal to negotiate an out-of-court settlement with SNC."

"I firmly believe nothing inappropriate occurred here and nothing inappropriate was alleged to have occurred until after the Cabinet shuffle," Butts testified.

Some of the meetings and events Butts testified about were not addressed by Wilson-Raybould, compelling some members of the Justice Committee to ask to hear from her again.

But that was opposed in a closed-door meeting, according to Conservative lawmaker Lisa Raitt, and the Liberals on the committee decided not to pursue a motion for her return.

"Canadians are going to be pretty ticked off, to be honest," she said. "Liberal members of the committee decided, well we've heard enough. Nothing new to see here, nothing new can come of it, and I think that's atrocious."

Trudeau's image

Trudeau, the son of former Prime Minister Pierre Trudeau, swept into power in November 2015 presenting a fresh-faced image. He disputed Wilson-Raybould's testimony to the House Justice Committee.

But because of the controversy, his image as a clean politician has taken a hit.

Daniel Beland , director of the McGill Institute for the Study of Canada, cites Philpott's stance about concern over the "independence and integrity" of the justice system. He's a professor of political science at McGill University.

"It's starting to hurt the Prime Minister and liberals in the polls," he said, with the opposition conservatives taking a slight lead in polling seven months before the election.

To the incomparable @janephilpott, truly the #MOC...For almost 4 years our country has witnessed your constant & unassailable commitment to always doing what is right & best for Cdns. You are a leader of vision & strength & I look forward to continuing to work alongside you. ❤️U. pic.twitter.com/bwL6ouQjSA — Jody Wilson-Raybould (@Puglaas) March 4, 2019

Trudeau has been seen as a figure who will do politics differently, but Beland said, "You hear on social media that he's just a politician like any other." The claim of pressuring and Trudeau's perceived lack of candor about what happened "is very damaging" since the issue centers around "trying to undermine the rule of law."

"He has not said much about this," Beland said. "People have complained about the fact that the PM didn't give a strong account of the story."

Beland said in recent days there are indications Trudeau was listening to the concerns of Canadian citizens. He canceled public events to seek counsel on the matter, for example.

"But it's not going well. You can't change the channel. This story is not going away. The public sympathy is on the side of Jody Wilson-Raybould."

The resignation of the two Cabinet members hurts Trudeau's vision of promoting feminism and helping indigenous people, Beland said. Wilson-Reybould is an indigenous woman and Philpott had been minister of Indigenous Services.

The controversy also accentuates the belief among some that Trudeau cares more about Quebec, where SNC-Lavalin is located, than other regions and industries, such as the oil industry in the West.

There is strong support among people in Quebec to support SNC-Lavalin because of the jobs it provides.

What's next?

Beland said this could undermine Liberal Party prospects seven months from now. The Conservatives are leading slightly in polls but the parties have been neck and neck.

"There's still time for the liberals to catch up and bounce back," he said. "I don't think they are finished."

He said Trudeau's trip to India last year was mocked and criticized, but he and the Liberals rebounded.

The Conservatives, led by Andrew Scheer , are waiting in the wings. Scheer said Philpott's resignation "clearly demonstrates a government in total chaos led by a disgraced Prime Minister."

Beland said, "The Conservatives and Liberals both have a shot at forming a government. It would probably be a close race."

"I can't recall anything specific."

Green Party Leader Elizabeth May asks Gerald Butts whether there was any evidence jobs were actually at stake, if SNC-Lavalin did not get a deferred prosecution agreement.

Follow LIVE updates here: https://t.co/bvWfNdDT6c#cdnpoli pic.twitter.com/71bysKXL0q — CTV News (@CTVNews) March 6, 2019

Canada could also face the prospect of a minority government, where neither party has a majority. That would be a weaker government. The New Democratic Party, a leftist party, could have more clout in that arrangement.

If this continues, it could tarnish Trudeau and also Canada's image as a clean and humane democracy.

China, already at odds with Canada over the arrest of Huawei executive Meng Wanzhou , is now accusing Canada of not respecting the rule of law.

"The rule of law is a very important issue," Beland said.

"The independence of justice is very important in the US, it raises important issues about the independence of the judiciary and democracy."