Days following the breakdown of trade discussions with the Trump administration, the Canadian Liberal government has unveiled a $7.5 billion aid package to assist workers and businesses facing the impact of a 50 percent tariff on $27.6 billion worth of Canadian exports imposed by the U.S. president.
Finance Minister François-Philippe Champagne and other government officials revealed that starting September 8, Canada will reciprocate the U.S. tariffs by imposing equivalent tariffs on $27.6 billion worth of U.S. goods. Champagne emphasized Canada’s commitment to meet the challenge posed by these tariffs and pledged to support workers, businesses, and industries as needed.
The government’s support initiative, on top of the previous $25 billion in tariff aid implemented over the past 18 months, is specifically tailored to assist workers and businesses, especially small and medium-sized enterprises nationwide.
Under the aid package, $3.5 billion of the total funds will be allocated to a swift response program for workers and employers. This includes extending existing Employment Insurance (EI) benefits such as waiving the one-week waiting period for EI claims, extending EI payment permissions, and providing additional weeks of EI benefits to long-tenured employees.
In addition, new measures will allow voluntarily unemployed individuals to collect EI without penalties and connect job seekers with major projects in need of staff. Employers will receive up to $1,000 per employee to cover training and administrative costs for implementing EI work-sharing and retention programs.
To further support impacted companies, the government is investing $2 billion in the Canada Strong Diversification Fund and enhancing the Large Enterprise Tariff Loan facility to provide more flexibility for larger companies. Medium-sized enterprises will benefit from $1.5 billion in additional funding through regional development agencies.
Moreover, the Business Development Bank of Canada will offer a second $500 million liquidity stream to provide working capital support for small and medium-sized businesses facing cash flow challenges. Eligible companies affected by the tariffs can access loans ranging from $250,000 to $5 million, with the option of interest-only payments for 36 months.
Canada’s retaliatory tariffs will mirror the U.S. tariffs on selected goods, focusing on products where Canadian alternatives are available. The government aims to protect Canadian industries through these reciprocal tariffs rather than generate revenue.
Prime Minister Mark Carney briefed federal opposition leaders on the government’s response to the tariff escalation, emphasizing the need for unity in protecting Canadian interests. Opposition leaders expressed varying opinions on the government’s actions, with the NDP supporting a firm stance and the Conservatives calling for additional economic measures. Industry Minister Mélanie Joly reaffirmed the government’s commitment to supporting workers and businesses amidst escalating trade tensions.