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 supporting businesses, starting September 8, the government will equalize the U.S. levies by imposing tariffs on $27.6 billion of equivalent U.S. goods.
“This presents an unprecedented challenge for Canada, but we are prepared to face it together,” Champagne stated during the announcement at a roofing company in Ottawa, emphasizing the government’s commitment to support workers, businesses, and industries for as long as necessary.
The aid package, as explained by officials speaking anonymously earlier, supplements the nearly $25 billion in tariff assistance provided over the past 18 months. The focus is on aiding workers and businesses, especially small- and medium-sized enterprises nationwide.
Under the support plan, the Liberal government is allocating $3.5 billion of the $7.5 billion fund towards a rapid response initiative for workers and employers. This includes extending existing Employment Insurance (EI) measures and introducing new benefits such as allowing voluntary job leavers to collect EI without penalties and facilitating connections between job seekers and major projects.
Moreover, employers will receive up to $1,000 per employee to cover training and administrative costs for implementing EI work-sharing and retention programs. Minister of Jobs and Families Patty Hajdu highlighted the importance of retaining skilled workers during economic downturns for both businesses and employees.
In terms of financing, the government is investing $2 billion to establish the Canada Strong Diversification Fund to support companies affected by tariffs. Additionally, adjustments to the Large Enterprise Tariff Loan facility will provide more flexibility to larger companies, extending the financial liquidity period and repayment duration.
Medium-sized enterprises will have access to an extra $1.5 billion in funding through regional development agencies, with increased grant limits and interest-free loan options. Industry Minister Mélanie Joly noted that these programs target businesses with revenues exceeding $1 million.
Canada’s retaliatory tariff strategy aligns with U.S. tariffs on Canadian goods, safeguarding domestic industries. The tariffs will focus on products where Canadian alternatives are available, protecting local markets rather than generating revenue.
Prime Minister Mark Carney engaged with opposition leaders to discuss the government’s response to the tariff escalation, emphasizing a unified approach to safeguard jobs and the economy. Opposition parties expressed varied opinions on the government’s actions, with demands for transparency and additional economic measures.
In response to criticisms, Minister Joly defended the government’s initiatives and urged accountability from opposition leaders, emphasizing the need for cohesive actions to support Canadian workers and businesses.