Days after the breakdown of trade negotiations with the Trump administration, the Canadian government is unveiling a $7.5 billion relief package aimed at assisting 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, along with other ministers, revealed on Tuesday that in addition to supporting businesses, the government will implement matching tariffs on $27.6 billion worth of similar U.S. goods starting September 8.
Champagne, speaking at an event in Ottawa hosted by a roofing company, emphasized the unprecedented challenge facing Canada but expressed confidence in the country’s ability to overcome it collectively. He reiterated the government’s commitment to backing workers, businesses, and industries for as long as necessary.
The support package, according to officials speaking on background, builds upon the nearly $25 billion in tariff relief measures introduced over the past 18 months. The focus of these measures is on providing assistance to workers and businesses, especially small and medium enterprises nationwide.
Under the relief package, the Liberal government is allocating $3.5 billion of the total funding towards a rapid response initiative designed to aid workers and employers. This includes extending existing Employment Insurance (EI) benefits such as waiving the one-week waiting period, extending EI payments for workers, and granting additional EI weeks to long-tenured employees.
New initiatives include enabling workers who voluntarily leave their jobs to access EI benefits without penalties and facilitating connections between unemployed individuals and major projects requiring staff. Employers will receive up to $1,000 per employee to cover training and administrative costs associated with EI work-sharing programs, allowing reduced work schedules while enabling employees to collect EI at a higher rate.
Additionally, the government is launching the Canada Strong Diversification Fund with a $2 billion investment to support companies impacted by tariffs, particularly medium-sized enterprises. The Large Enterprise Tariff Loan facility is being enhanced to provide extended financial support to eligible companies.
Medium-sized businesses will have access to an extra $1.5 billion through regional development agencies, which includes increased non-repayable grants and interest-free loans. The Business Development Bank of Canada will offer a $500 million liquidity stream to provide working capital support to small and medium enterprises facing cash flow challenges.
The retaliatory tariffs by Canada target products affected by the U.S.’s Section 232 and 338 tariffs, covering a wide range of goods from steel and aluminum to dairy products. Canadian tariffs are strategically designed to safeguard domestic industries and match U.S. tariff rates on equivalent products where Canadian alternatives are available.
Prime Minister Mark Carney engaged with opposition leaders to update them on the government’s response to the escalating trade tensions, emphasizing the importance of a unified approach to protect jobs and Canadian interests. Opposition leaders expressed differing perspectives on the response, with demands for additional measures to address the economic impact of the tariffs.