Days following the breakdown of trade negotiations with the Trump administration, the Canadian Liberal government is introducing a $7.5 billion aid package to assist workers and enterprises in coping with the new 50% tariffs imposed on $27.6 billion worth of Canadian exports by the U.S. president.
Finance Minister François-Philippe Champagne, along with other ministers, disclosed that starting from September 8, the government will mirror the U.S. tariffs by levying $27.6 billion on equivalent American products. Champagne, speaking at the announcement held in Ottawa, emphasized Canada’s commitment to addressing the challenging situation together.
The support initiative, which complements the previous $25 billion in tariff assistance rolled out over the last 18 months, aims to provide targeted assistance to workers and businesses, with a focus on small and medium-sized enterprises nationwide.
Under the aid package, $3.5 billion of the total funding will be allocated to a rapid response program for workers and employers. This includes extending existing Employment Insurance (EI) benefits such as waiving the waiting period, allowing workers to retain EI payments without exhausting separation payments, and granting additional EI weeks for long-tenured employees.
New measures include enabling voluntarily departed workers to access EI benefits, facilitating the connection of unemployed individuals with high-demand projects, and providing employers up to $1,000 per employee for implementing EI work-sharing programs.
Furthermore, the government plans to establish the Canada Strong Diversification Fund with a $2 billion investment to support companies affected by tariffs with capital maintenance projects. Significant improvements are also being made to the Large Enterprise Tariff Loan facility to offer extended financial liquidity and repayment periods to eligible firms.
Additionally, medium-sized enterprises will have access to $1.5 billion in additional funding through regional development agencies, with increased grants and interest-free loans available. Industry Minister Mélanie Joly highlighted the eligibility criteria for these programs, emphasizing support for businesses with revenues exceeding $1 million.
Canada’s retaliatory tariff strategy will mirror the U.S. tariffs imposed on select Canadian goods, protecting domestic industries. The government will align tariff rates with the U.S. on similar products, focusing on sectors where Canadian alternatives are viable.
Prime Minister Mark Carney engaged with opposition leaders to discuss the government’s response to the tariff escalation, emphasizing a unified approach to safeguard jobs and promote economic growth. Opposition leaders expressed varying perspectives on the government’s actions, with calls for additional measures and economic plans to mitigate the impact of tariffs.