Days following the breakdown of trade negotiations with the Trump administration, the Liberal government is introducing a $7.5 billion aid package to assist workers and businesses in coping with the new 50% tariffs imposed by the U.S. president on $27.6 billion worth of Canadian goods.
Finance Minister François-Philippe Champagne, alongside other ministers, revealed on Tuesday that the government will match the U.S. tariffs dollar for dollar by imposing $27.6 billion in tariffs on equivalent U.S. goods, starting September 8.
“This presents an extraordinary challenge for Canada, but we are prepared to face it together as a nation,” 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.”
In addition to the previously implemented $25 billion in tariff assistance over the past year and a half, the new support package is specifically tailored to aid workers and businesses, especially small and medium-sized enterprises nationwide.
Under the support plan, the Liberal government will allocate $3.5 billion of the total funding towards a rapid response program for workers and employers. This initiative will include enhancements to Employment Insurance (EI) benefits, such as extending waivers on waiting periods and providing additional weeks of EI for eligible employees.
Furthermore, new measures will allow workers who voluntarily leave their jobs to collect EI without penalties and facilitate the connection of unemployed or underemployed workers with essential projects in need of staff.
Employers will also receive up to $1,000 per employee to cover training and administrative costs associated with implementing EI work-sharing and retention programs. This will enable businesses to reduce employees’ work schedules while allowing them to collect EI benefits for the reduced workdays.
To assist tariff-affected companies, the government is establishing the Canada Strong Diversification Fund with a $2 billion investment for supporting capital maintenance projects. Larger firms will benefit from extended financial flexibility through modifications to the Large Enterprise Tariff Loan facility.
Additionally, medium-sized enterprises will have access to $1.5 billion in extra funding distributed through regional development agencies, allowing for increased grants and interest-free loans to qualifying businesses.
Canada’s retaliatory tariff strategy will mirror U.S. tariffs on comparable products, aiming to safeguard Canadian industries rather than generate revenue. The government has focused on products where Canadian alternatives are available, ensuring strategic targeting of U.S. imports.
In response to Prime Minister Carney’s actions, opposition leaders were briefed on the government’s tariff response. The importance of a united approach in safeguarding jobs and the economy was emphasized during the discussions.
Overall, the government’s comprehensive plan includes various measures to support workers, businesses, and industries affected by the trade tensions, illustrating a commitment to protecting Canadian interests and economic stability in the face of escalating tariffs.