Days following the breakdown of trade negotiations with the Trump administration, the Liberal government has unveiled a $7.5 billion aid package to assist workers and businesses in coping with the newly imposed 50% tariffs on $27.6 billion worth of Canadian products by the U.S. president.
Finance Minister François-Philippe Champagne, along with other officials, disclosed on Tuesday that starting September 8, they will match the U.S. tariffs dollar for dollar by imposing tariffs on $27.6 billion worth of equivalent U.S. goods.
Champagne emphasized that the counter-tariffs, combined with the multibillion-dollar support initiative, aim to safeguard workers, farmers, families, and businesses while fostering a more robust, resilient, and diversified Canadian economy.
The support package, which complements the nearly $25 billion in tariff assistance provided over the past year and a half, is tailored to specifically benefit workers and businesses, with a focus on small- and medium-sized enterprises nationwide.
Under the support plan, $3.5 billion of the total funding will be allocated to a swift response program for workers and employers. This includes extending existing Employment Insurance (EI) benefits and introducing new measures to aid workers who voluntarily leave their jobs.
Moreover, the government is injecting $2 billion into the Canada Strong Diversification Fund to aid tariff-affected companies with immediate projects supporting ongoing capital maintenance, especially medium-sized enterprises.
The Large Enterprise Tariff Loan facility (LETL) is also undergoing enhancements, with eligible companies now granted 36 months of financial support, up from 24 months, and an extended maximum loan repayment period of 15 years.
Additionally, medium-sized businesses across the country will have access to an extra $1.5 billion in funding through regional development agencies, with increased non-repayable contributions and liquidity support available.
The Business Development Bank of Canada will offer a second $500 million liquidity stream to provide working capital support for small- and medium-sized enterprises facing cash flow challenges due to the tariffs.
Canada’s retaliatory tariffs will mirror the U.S. tariffs imposed on Canadian goods under Section 338 and 232, affecting over 700 products. The focus of Canada’s tariff regime is to safeguard domestic industries rather than generate revenue by aligning tariff rates with those of the U.S. on corresponding products.
