Days after trade discussions with the Trump administration fell through, the Liberal government of Canada has unveiled a $7.5 billion support package to assist workers and companies in coping with new 50 percent tariffs on $27.6 billion worth of Canadian exports imposed by the U.S. president.
Finance Minister François-Philippe Champagne and other officials revealed on Tuesday that in addition to aid for businesses, starting September 8, the government will reciprocate the U.S. tariffs by levying $27.6 billion on similar U.S. products.
Champagne, speaking at a press conference held at a roofing firm in Ottawa, emphasized, “This is an unparalleled challenge for Canada, but we are ready to face it collectively. We stand by our workers, businesses, and industries with unwavering support.”
The support package, explained by officials speaking on background earlier, supplements the nearly $25 billion in tariff relief already deployed over the past 18 months.
The assistance measures aim to specifically target workers and businesses, especially small- and medium-sized enterprises nationwide.
Under the support initiative, $3.5 billion of the total $7.5 billion fund will be allocated to a rapid response program for workers and employers. This includes extending certain Employment Insurance (EI) benefits previously set to expire, such as waiving the one-week waiting period, extending EI payments without exhausting separation payments, and granting additional EI weeks for long-tenured employees.
New provisions will also allow voluntarily departing workers to receive EI benefits without penalties and facilitate the connection of unemployed individuals with major projects requiring staff. Employers can receive up to $1,000 per employee to cover costs related to implementing work-sharing and retention programs under EI.
Moreover, the government is investing $2 billion in the Canada Strong Diversification Fund to aid tariff-affected firms with capital maintenance projects. The Large Enterprise Tariff Loan facility (LETL) is being enhanced to provide eligible companies with extended financial support, now spanning 36 months with an extended repayment period of 15 years.
Medium-sized enterprises will access an additional $1.5 billion in funding through regional development agencies, increasing the non-repayable grant limit to $3 million and offering interest-free loans up to $2 million. The Business Development Bank of Canada will offer a second $500 million liquidity stream for working capital support to small- and medium-sized enterprises facing cash flow challenges.
Canada’s retaliatory tariffs will mirror U.S. tariffs on goods like steel, aluminum, autos, lumber, and more. The Canadian tariff strategy aims to safeguard local industries by matching U.S. tariffs on equivalent products where possible.
Prime Minister Mark Carney conferred with opposition leaders to discuss the response to the tariff escalation, emphasizing a united approach to protect jobs and the economy. Opposition leaders expressed varied opinions on the negotiation stance, with calls for additional measures to pressure the U.S.
Conservative Leader Pierre Poilievre urged transparency in the rejected agreement, parliamentary recall, and an economic action plan. Industry Minister Mélanie Joly dismissed these demands, highlighting Conservative opposition to prior Liberal relief efforts for workers and businesses.