Days following the breakdown of trade negotiations with the Trump administration, the Canadian Liberal government is unveiling a $7.5 billion aid package to assist workers and businesses in coping with the new 50% tariffs imposed by the U.S. president on $27.6 billion worth of Canadian goods.
Finance Minister François-Philippe Champagne, accompanied by other ministers, disclosed on Tuesday that in response to the U.S. levies, Canada will match them dollar for dollar by imposing tariffs on $27.6 billion of comparable American products starting September 8.
Addressing the media at a roofing company in Ottawa, Champagne emphasized the unprecedented challenge facing Canada but expressed determination in facing it together as Canadians. He reiterated the government’s commitment to supporting workers, businesses, and industries for as long as necessary.
The newly announced support package, in addition to the nearly $25 billion in existing tariff assistance over the past 18 months, is designed to provide targeted aid to workers and businesses, with a specific focus on small- and medium-sized enterprises nationwide.
Under the support plan, the Liberal government is allocating $3.5 billion of the total funding towards a rapid response initiative aimed at supporting workers and employers. This includes extending certain Employment Insurance (EI) benefits, such as waiving the one-week waiting period, extending EI payment eligibility without exhausting separation payments, and granting additional weeks of EI for long-tenured employees.
Furthermore, new measures involve allowing voluntarily separated workers to access EI benefits without penalties and facilitating connections between unemployed or underemployed workers and major projects requiring staffing. Employers will receive up to $1,000 per employee to cover training and administration costs for implementing EI work-sharing and retention initiatives.
To address the impact of tariffs on businesses, the government is setting up the Canada Strong Diversification Fund with a $2 billion investment to support affected companies with ready-to-implement projects for capital maintenance. Larger enterprises will benefit from enhanced flexibility through modifications to the Large Enterprise Tariff Loan facility (LETL), extending the financial liquidity period to 36 months and extending the maximum loan repayment term to 15 years.
Medium-sized enterprises will gain access to an additional $1.5 billion in funding through regional development agencies, raising the grant cap to $3 million and offering interest-free loans of up to $2 million for qualifying businesses. Industry Minister Mélanie Joly highlighted that these programs are open to businesses with revenues exceeding $1 million.
The Business Development Bank of Canada will provide an extra $500 million in liquidity support to aid small- and medium-sized businesses facing cash flow challenges, offering loans ranging from $250,000 to $5 million with interest-only payment options for 36 months.
Canada’s retaliatory tariffs will mirror those imposed by the U.S. administration on Canadian goods targeted under Section 338 and 232 tariffs, covering various products from steel and aluminum to dairy and alcohol. The objective of Canada’s tariff regime is to safeguard domestic industries by aligning tariff rates with the U.S. on similar products, focusing on Canadian-made alternatives where feasible.
Prime Minister Mark Carney engaged with opposition leaders to discuss the government’s response to the escalating tariffs, emphasizing the importance of a unified approach to protect jobs and advance Canadian interests. Opposition leaders expressed varying perspectives on the government’s actions, with demands for additional measures and economic plans to mitigate the impact of tariffs and save jobs.