Days following the breakdown of trade discussions with the Trump administration, the Canadian Liberal government is introducing a $7.5 billion aid package to assist workers and businesses in coping with the newly imposed 50 percent tariffs on $27.6 billion worth of Canadian products by the U.S. president.
Finance Minister François-Philippe Champagne and other officials revealed on Tuesday that in addition to aiding businesses, starting September 8, the government will mirror the U.S. tariffs by imposing tariffs on $27.6 billion of equivalent American goods.
“This situation poses an extraordinary challenge on Canada, but we are ready to face it together with Canadians,” 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 support package, on top of the previously implemented $25 billion in tariff support over the last 18 months, is tailored to provide assistance to workers and businesses, especially small and medium-sized enterprises nationwide.
Under the aid plan, the Liberal government is allocating $3.5 billion of the total fund to a swift response program for workers and employers. This initiative includes extending existing changes to Employment Insurance (EI), such as waiving the one-week waiting period and granting additional EI weeks for long-tenured employees.
Furthermore, new measures will allow workers who voluntarily leave their jobs to collect EI without penalties and facilitate connecting unemployed individuals to major projects requiring staff. Employers will receive up to $1,000 per employee for implementing EI work-sharing and retention programs.
To bolster affected companies, the government is injecting $2 billion into the Canada Strong Diversification Fund, aiding medium-sized firms with capital maintenance projects. Additionally, adjustments to the Large Enterprise Tariff Loan facility will grant more flexibility to larger corporations.
Medium-sized enterprises will access an extra $1.5 billion through regional development agencies, with increased grants and interest-free loans. The Business Development Bank of Canada will offer working capital support to small and medium-sized businesses facing financial strains due to the tariffs.
Canada’s retaliatory tariffs will target U.S. goods hit by Section 338 and 232 tariffs, covering various products like steel, aluminum, autos, lumber, and dairy. The tariff strategy is aimed at safeguarding Canadian industries rather than generating revenue, aligning Canada’s tariff rates with those of the U.S. on corresponding products.
Prime Minister Mark Carney engaged with opposition leaders to discuss the response to the escalated tariffs, emphasizing a unified approach. NDP Leader Avi Lewis supported the decision to walk away from negotiations, advocating for additional measures like export taxes on oil and gas. Conservative Leader Pierre Poilievre called for an emergency economic plan, prompting Joly to defend the government’s actions against Conservative criticisms.
Overall, the Canadian government is taking proactive steps to mitigate the impact of the tariffs on its economy and workforce, emphasizing unity and strategic support for businesses and workers.