Days after the breakdown of trade discussions with the Trump administration, the Liberal government is introducing a $7.5 billion aid package to assist workers and businesses facing new 50% 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 the support for businesses, starting September 8, Canada will mirror the U.S. tariffs by imposing equivalent tariffs on $27.6 billion of comparable American goods.
“This is an unprecedented challenge for Canada, but we will rise to the occasion unitedly,” Champagne stated during the announcement at a roofing company in Ottawa. “We are committed to supporting our workforce, businesses, and industries for as long as necessary.”
The aid package, which complements nearly $25 billion in previous tariff support over the past 18 months, is tailored to provide assistance to workers and businesses, especially small- and medium-sized enterprises nationwide.
Under the support initiative, the Liberal government is allocating $3.5 billion of the total funding to a swift response program for workers and employers. This includes extending existing Employment Insurance (EI) benefits such as waiving the one-week waiting period, allowing workers to collect EI without depleting their separation payments, and granting additional EI weeks for long-tenured employees.
New measures include permitting voluntarily departed workers to receive EI benefits without penalties and facilitating the connection of unemployed or underemployed individuals with major projects in need of staff. Employers will also receive up to $1,000 per employee to cover training and administrative costs for implementing EI work-sharing and retention programs.
To address the impact of tariffs on companies, the government is setting up the Canada Strong Diversification Fund with a $2 billion investment to support affected businesses with capital maintenance projects. Larger firms will benefit from extended support under the Large Enterprise Tariff Loan facility (LETL), now offering a 36-month liquidity period and an increased loan repayment period.
Additionally, medium-sized enterprises can access an extra $1.5 billion in funding through regional development agencies, with higher non-repayable grants and interest-free loans available. The programs are open to businesses with revenues exceeding $1 million.
Canada’s retaliatory tariffs will mirror corresponding U.S. tariffs on over 700 products, focusing on items like steel, aluminum, autos, lumber, and agricultural goods. The government aims to protect Canadian industries by aligning tariff rates with the U.S. where possible, targeting products where Canadian alternatives exist.
Prime Minister Mark Carney updated opposition leaders on the response to the tariffs, emphasizing a united approach to safeguard jobs and the economy. Opposition leaders expressed varied opinions, with the NDP supporting a firm stance and the Conservatives calling for immediate economic actions.
In response to the demands from the Conservative Leader, Industry Minister Mélanie Joly defended the government’s measures, highlighting past opposition to supportive initiatives. Joly emphasized the importance of consistent action in supporting workers and businesses during challenging times.