After the breakdown of trade negotiations with the Trump administration, the Canadian Liberal government has unveiled a $7.5 billion aid package to assist workers and businesses affected by the new 50% tariffs imposed on $27.6 billion worth of Canadian goods by the U.S. president. Finance Minister François-Philippe Champagne, along with other ministers, revealed that starting on September 8, Canada will reciprocate the U.S. levies dollar for dollar by imposing tariffs on $27.6 billion worth of equivalent American goods.
Champagne, speaking at a press conference at a roofing company in Ottawa, emphasized that the situation poses an unprecedented challenge for Canada, but the country is prepared to face it collectively. The government aims to provide comprehensive support to workers, businesses, and industries for as long as necessary, building on the nearly $25 billion in tariff assistance implemented over the past 18 months.
The aid package, primarily targeting workers and small- to medium-sized enterprises nationwide, includes a $3.5 billion rapid response initiative to support employees and employers. It encompasses augmenting existing Employment Insurance (EI) measures, such as extending the waiver of the one-week waiting period for EI claims, prolonging the eligibility for EI payments without exhausting separation payments, and granting additional EI weeks for long-tenured employees.
Moreover, new measures will allow voluntary job leavers to access EI benefits, facilitate connections between job seekers and major projects, and provide financial support to employers implementing EI work-sharing and retention programs. Minister of Jobs and Families Patty Hajdu highlighted the significance of retaining skilled workers during economic downturns to benefit both businesses and employees.
In addition to worker-focused initiatives, the government plans to allocate $2 billion towards establishing the Canada Strong Diversification Fund to assist tariff-affected companies with capital maintenance projects. Enhancements to the Large Enterprise Tariff Loan facility (LETL) will offer increased flexibility to larger corporations, extending the financial support period to 36 months and allowing longer loan repayment terms.
Medium-sized enterprises will gain access to an extra $1.5 billion in funding through regional development agencies, increasing non-repayable grant limits and providing interest-free loans. Industry Minister Mélanie Joly emphasized that these programs are tailored for businesses with annual revenues exceeding $1 million.
Furthermore, the government’s retaliatory tariff strategy will mirror U.S. tariffs on specific products, aiming to safeguard Canadian industries rather than generate revenue. By aligning tariff rates with American counterparts and focusing on Canadian-made alternatives, the government seeks to shield domestic industries.
Prime Minister Mark Carney engaged with opposition leaders to discuss the response to the escalated tariffs, emphasizing a unified approach in safeguarding Canadian interests. The opposition parties expressed varying viewpoints, with the NDP advocating for stringent measures, while the Conservatives urged parliamentary action and economic relief plans. Joly dismissed the Conservative demands, highlighting past opposition towards Liberal economic initiatives.