Days following the breakdown of trade negotiations with the Trump administration, the Canadian government is introducing a $7.5 billion relief 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 revealed on Tuesday that in conjunction with the aid for businesses, starting September 8, Canada 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 as a nation,” Champagne stated during the announcement held at an Ottawa-based roofing company. He emphasized the government’s commitment to supporting workers, businesses, and industries for as long as necessary.
The support initiative, which builds upon nearly $25 billion in previous tariff assistance over the past year and a half, is specifically tailored to aid workers and businesses, with a focus on small and medium-sized enterprises nationwide.
Under the relief package, $3.5 billion of the total funding will be allocated to a rapid response program for workers and employers. This includes extending existing Employment Insurance (EI) benefits, such as waiving the one-week waiting period and providing additional weeks of EI for long-tenured employees.
New measures will allow voluntarily departed workers to access EI benefits without penalties and facilitate the connection of unemployed or underemployed individuals with high-demand projects. Employers can receive up to $1,000 per employee to cover training and administrative costs for implementing EI work-sharing and retention programs.
To bolster affected companies, the government is setting up the Canada Strong Diversification Fund with a $2 billion investment to support firms impacted by the tariffs. Additionally, changes to the Large Enterprise Tariff Loan facility will offer extended financial liquidity periods and repayment durations for eligible companies.
Medium-sized enterprises will have access to an extra $1.5 billion in funding through regional development agencies, with increased grant caps and interest-free loans available. Industry Minister Mélanie Joly highlighted that these programs aim to assist businesses with revenues exceeding $1 million.
The retaliatory tariffs implemented by Canada target products affected by U.S. Section 232 and 338 tariffs, aligning Canada’s tariff rates with those of the U.S. on similar products where possible. The objective is to safeguard Canadian industries while promoting domestic alternatives.
Prime Minister Mark Carney engaged with opposition leaders to discuss the government’s response to the tariff escalation, emphasizing unity in protecting Canadian jobs and interests. While opposing parties expressed varying views on the negotiations, a collective approach was emphasized for the benefit of Canadian workers and businesses.