Days following the breakdown of trade negotiations with the Trump administration, the Canadian government has unveiled a $7.5 billion aid package aimed at assisting workers and businesses affected by the newly imposed 50% tariffs on $27.6 billion worth of Canadian exports by the U.S. President.
Finance Minister François-Philippe Champagne, along with other government officials, revealed the plan on Tuesday, stating that starting from September 8, Canada will reciprocate the U.S. tariffs by imposing equivalent tariffs on $27.6 billion worth of American goods.
“This challenge poses an unprecedented situation for Canada, but we are ready to face it together as a nation,” Champagne expressed during the announcement in Ottawa.
The support package, announced on top of the nearly $25 billion in previous tariff aid over the past 18 months, is tailored to provide assistance to workers and businesses, particularly focusing on small and medium-sized enterprises nationwide.
Under the initiative, the government is allocating $3.5 billion of the total funding to a swift response program intended for workers and employers. This allocation includes extending certain Employment Insurance (EI) benefits such as waiving the one-week waiting period, extending EI payment permissions, and granting additional EI weeks for long-tenured employees.
Furthermore, the plan introduces new measures that allow voluntarily resigned workers to claim EI benefits without penalties and facilitates the connection of unemployed or underemployed individuals with projects in need of staff. Employers will also receive up to $1,000 per employee to support training and operational costs for implementing EI work-sharing and retention programs.
In a bid to bolster impacted companies, the government is investing $2 billion in the Canada Strong Diversification Fund and enhancing the Large Enterprise Tariff Loan facility to provide more flexibility to larger corporations. Additionally, medium-sized enterprises will gain access to $1.5 billion in extra funding through regional development agencies, increasing non-repayable grants and offering interest-free loans to qualifying businesses.
Canada’s retaliatory tariff strategy will mirror the U.S. tariffs on specific goods, focusing on protecting Canadian industries rather than generating revenue. The government aims to safeguard local industries by aligning its tariff rates with those imposed by the U.S. on corresponding products, with a focus on promoting Canadian alternatives where available.
Prime Minister Mark Carney also engaged with opposition leaders to discuss the government’s response to the escalating trade tensions. Amid differing opinions on the approach, the government emphasizes the importance of unity in protecting Canadian interests and the economy.