Days following the breakdown of trade negotiations with the Trump administration, the Canadian government is introducing a $7.5 billion aid package to assist workers and businesses in coping with the new 50% tariffs imposed on $27.6 billion worth of Canadian goods by the U.S. president.
On Tuesday, Finance Minister François-Philippe Champagne, along with other ministers, unveiled the plan, which includes matching the U.S. tariffs dollar for dollar by imposing tariffs on $27.6 billion worth of comparable U.S. products starting on September 8.
Champagne expressed, “Canada faces an extraordinary challenge, but we are ready to face it united. We are committed to supporting our workforce, businesses, and industries for as long as necessary.”
Additionally, officials highlighted that this new support initiative supplements the nearly $25 billion in tariff relief provided over the last 18 months, with a focus on aiding workers and small- to medium-sized enterprises nationwide.
Under the relief program, a significant portion of the $7.5 billion will be allocated to a rapid response effort, directing $3.5 billion towards assisting workers and employers. This includes extending changes to Employment Insurance, such as waiving the waiting period for EI collection, allowing workers to receive EI without exhausting their separation payments, and granting additional EI weeks for long-tenured employees.
New measures will also facilitate EI collection for voluntarily departed workers and connect unemployed individuals with job opportunities in major projects. Employers can access up to $1,000 per employee to cover training and program administration costs for implementing EI work-sharing and retention schemes.
Furthermore, the government is investing $2 billion to establish the Canada Strong Diversification Fund, supporting companies affected by tariffs with project funding for capital maintenance. Notably, adjustments to the Large Enterprise Tariff Loan facility will offer enhanced flexibility to larger firms.
Medium-sized enterprises will gain access to an additional $1.5 billion in funding through regional development agencies, increasing the cap on non-repayable grants and providing interest-free loans to qualifying businesses.
Canada’s retaliatory tariffs are aimed at U.S. products targeted by Section 232 and 338 tariffs, matching tariff rates to protect Canadian industries. Prime Minister Mark Carney engaged with opposition leaders to discuss the response, emphasizing unity in protecting jobs and the economy.
Following the discussions, NDP Leader Avi Lewis supported the decision to walk away from negotiations and proposed additional measures to pressure the U.S. Conservative Leader Pierre Poilievre called for transparency and urgent economic action, which was rebutted by Industry Minister Mélanie Joly, citing past opposition to supportive measures.
