Days following the breakdown of trade negotiations with the Trump administration, the Canadian Liberal government has unveiled a $7.5 billion aid package to assist workers and businesses affected by the newly imposed 50% tariffs on $27.6 billion worth of Canadian exports by the U.S. President.
Finance Minister François-Philippe Champagne and other officials disclosed on Tuesday that in addition to aiding businesses, starting September 8, the government will reciprocate the U.S. tariffs by imposing equivalent tariffs on $27.6 billion worth of comparable American products.
“This presents an unprecedented challenge for Canada, but we are ready to face it together,” said Champagne during the announcement at a roofing company in Ottawa, emphasizing the government’s commitment to supporting workers and industries for as long as necessary.
The support initiative, which complements the nearly $25 billion in previous tariff relief efforts over the past year and a half, aims to primarily assist workers and small- to medium-sized enterprises nationwide.
Under the plan, $3.5 billion of the total funding will be directed towards a rapid response program benefiting workers and employers. This includes extending existing EI benefits changes until further notice, such as waiving the waiting period to collect EI and granting additional weeks of EI payments for long-tenured employees.
Furthermore, new measures will allow workers who voluntarily resign to collect EI without penalties and facilitate the connection of unemployed individuals with job opportunities in major projects. Employers will receive up to $1,000 per employee to cover training costs for implementing EI work-sharing programs.
To address the financial needs of impacted companies, the government is allocating $2 billion towards the Canada Strong Diversification Fund and expanding the Large Enterprise Tariff Loan facility. The LETL will now offer 36 months of financial support and extend the loan repayment period to 15 years from 10.
In addition, medium-sized businesses can access $1.5 billion in funding through regional development agencies, with increased grant caps and interest-free loans available. The Business Development Bank of Canada will provide working capital support to small and medium-sized enterprises facing cash flow challenges.
Canada’s retaliatory tariffs will mirror those imposed by the U.S. on Canadian goods, protecting local industries with equivalent tariff rates. The government’s approach is strategically targeting U.S. products where Canadian alternatives are viable.
Prime Minister Mark Carney engaged with opposition leaders to discuss the response strategy, emphasizing unity in safeguarding Canadian interests. Opposition leaders expressed varying perspectives, with the NDP advocating for assertive measures and the Conservatives calling for an economic action plan to mitigate job losses and reduce costs.
Despite opposition demands, Industry Minister Mélanie Joly defended the government’s initiatives, highlighting the Conservatives’ historical opposition to supportive measures for workers and businesses. Joly urged critics to align their actions with their rhetoric.