Days following the breakdown of trade negotiations with the Trump administration, the government led by the Liberal Party is introducing a financial aid package of $7.5 billion to assist workers and businesses in mitigating the impact of new 50% tariffs imposed by the U.S. President on $27.6 billion worth of Canadian goods.
In an announcement made on Tuesday, Finance Minister François-Philippe Champagne, along with other ministers, revealed that starting September 8, the government will mirror the U.S. tariffs by imposing equivalent tariffs on $27.6 billion worth of U.S. products.
The Finance Minister emphasized the significant challenge facing Canada due to these tariffs but assured that Canada is prepared to face it collectively. The package is in addition to the nearly $25 billion in tariff support already provided over the past 18 months.
The government’s focus is on supporting workers and businesses, especially small and medium enterprises across the country. A substantial portion of the $7.5 billion support funding, amounting to $3.5 billion, will be directed towards a swift response initiative for workers and employers.
The initiative includes extending existing Employment Insurance (EI) benefits such as waiving the one-week waiting period for EI claims, allowing workers to receive EI without exhausting their separation payments, and granting additional EI weeks for long-tenured employees. New measures also involve enabling voluntarily departed workers to access EI benefits and facilitating connections between unemployed individuals and projects in need of staff.
Employers are set to receive up to $1,000 per employee to cover training and administration costs related to implementing EI work-sharing and retention programs. Minister of Jobs and Families Patty Hajdu highlighted the importance of retaining skilled workers during economic downturns.
Furthermore, the government plans to establish the Canada Strong Diversification Fund with an allocation of $2 billion to support companies affected by tariffs. Additionally, adjustments will be made to the Large Enterprise Tariff Loan facility to offer more flexibility, extending the financial liquidity period from 24 to 36 months and allowing a longer loan repayment term.
Medium-sized enterprises will gain access to $1.5 billion in additional funding through regional development agencies, with increased grant limits and interest-free loans available. Industry Minister Mélanie Joly confirmed that these programs would benefit businesses with revenues exceeding $1 million.
Canada’s retaliatory tariff strategy will mirror the U.S. tariffs on specific products, focusing on protecting Canadian industries. The government intends to match U.S. tariff rates on equivalent Canadian products where feasible alternatives exist, prioritizing industry protection over revenue generation.
Prime Minister Mark Carney engaged with opposition leaders to discuss the government’s response to the tariff escalation. The opposition leaders emphasized the importance of a united approach to safeguard Canadian interests. While the New Democratic Party supported the decision to walk away from negotiations, the Conservative Party called for urgent economic actions, including the suspension of gas taxes and other measures to support employment and reduce costs.
In response to the Conservative Party’s demands, Minister Joly highlighted the government’s consistent efforts to assist workers and businesses and urged for alignment between words and actions from opposition leaders.
