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 in coping with the newly imposed 50% tariffs on $27.6 billion worth of Canadian goods by the U.S. President. Finance Minister François-Philippe Champagne and other officials revealed the plan on Tuesday, stating that starting September 8, the government will mirror the U.S. levies by imposing tariffs on $27.6 billion worth of comparable American products.
“This is an extraordinary challenge for Canada, but we are prepared to face it head-on. Canadians will unite to overcome this challenge together,” Champagne declared during the announcement held at a roofing firm in Ottawa. He emphasized the government’s commitment to supporting workers, businesses, and industries for as long as necessary.
The new support package, on top of the nearly $25 billion in existing tariff relief implemented over the past 18 months, is specifically tailored to assist workers and businesses, especially small- and medium-sized enterprises nationwide. As part of the aid initiative, $3.5 billion of the total fund will be allocated to a rapid response program for workers and employers.
The program includes extending existing Employment Insurance (EI) benefits such as waiving the one-week waiting period, allowing workers to receive EI payments without exhausting their separation payments, and granting additional weeks of EI benefits for long-tenured employees. Additionally, new measures will enable workers who voluntarily leave their jobs to collect EI without penalties and facilitate the connection of unemployed or underemployed individuals with projects requiring staff.
Employers will receive up to $1,000 per employee to cover training and administrative costs for implementing EI work-sharing and retention programs, allowing them to reduce work schedules while employees receive EI payments for the remaining days. Minister of Jobs and Families Patty Hajdu emphasized the importance of retaining skilled workers during challenging times.
In terms of financing and loans, the government is investing $2 billion in the Canada Strong Diversification Fund to support tariff-affected companies with capital maintenance projects. Changes to the Large Enterprise Tariff Loan facility will provide more flexibility to larger companies, extending financial liquidity periods and repayment timelines.
Medium-sized enterprises will have access to an additional $1.5 billion in funding through regional development agencies, including increased grants and interest-free loans. The Business Development Bank of Canada will offer working capital support to small- and medium-sized businesses facing cash flow constraints due to the tariffs.
Canada’s retaliatory tariff strategy will mirror U.S. tariffs on specific goods, focusing on industries where Canadian alternatives are available. Prime Minister Mark Carney engaged with opposition leaders to discuss the government’s response, emphasizing unity in protecting jobs and the economy. Opposition leaders expressed varying views on the government’s actions, with calls for additional measures and economic plans to mitigate the impact of tariffs.
