Days following the breakdown of trade discussions with the Trump administration, the Canadian government is introducing a $7.5 billion aid package to assist workers and businesses facing new 50% tariffs on $27.6 billion worth of Canadian exports imposed by the U.S. president.
Finance Minister François-Philippe Champagne, along with other officials, revealed on Tuesday that starting from September 8, the government will reciprocate the U.S. tariffs by imposing equivalent tariffs on $27.6 billion worth of comparable U.S. goods.
Addressing the press at a roofing company in Ottawa, Champagne emphasized the unprecedented challenge faced by Canada and assured that the country is ready to tackle it collectively. He reiterated the commitment to support workers, businesses, and industries for as long as necessary.
The support package, which complements the nearly $25 billion in previous tariff assistance over the past 18 months, is tailored to provide targeted aid to workers and businesses, especially small and medium enterprises nationwide.
A significant portion of the $7.5 billion support funding, totaling $3.5 billion, will be allocated to a rapid response program for workers and employers. This includes extending existing Employment Insurance (EI) benefits like waiving the one-week waiting period, extending EI payment eligibility, and granting additional weeks of EI for long-tenured employees.
New measures will also allow voluntarily departed workers to access EI benefits without penalties and facilitate job placements for unemployed or underemployed workers in major projects. Employers can receive up to $1,000 per employee to cover training and administrative costs for work-sharing and retention programs.
Moreover, the government plans to establish the Canada Strong Diversification Fund with a $2 billion investment to aid tariff-affected companies in executing capital maintenance projects. Adjustments to the Large Enterprise Tariff Loan facility will offer more flexibility, extending financial support from 24 to 36 months and increasing the maximum repayment period to 15 years.
Medium-sized enterprises will benefit from an additional $1.5 billion in funding through regional development agencies, raising the cap on non-repayable grants and providing interest-free loans for qualifying businesses. The Business Development Bank of Canada will offer a $500 million liquidity stream to support small and medium-sized businesses facing cash flow challenges.
Canada’s retaliatory tariff strategy will target U.S. goods similar to those hit by Section 232 and 338 tariffs imposed by the Trump administration. The focus is on safeguarding Canadian industries, matching U.S. tariff rates on specific products, and promoting Canadian-made alternatives where feasible.
Prime Minister Mark Carney’s government is engaging with opposition leaders to ensure a unified approach in safeguarding jobs, bolstering the economy, and defending Canadian interests amid escalating trade tensions with the U.S. Opposition parties are advocating for robust measures to counter the tariff impacts and protect the Canadian workforce and economy.