Days after the breakdown of trade discussions with the Trump administration, the Canadian government is introducing a $7.5 billion aid package to assist workers and businesses in coping with the newly imposed 50 per cent tariffs on $27.6 billion worth of Canadian exports by the U.S. president.
Finance Minister François-Philippe Champagne and other government officials revealed on Tuesday that in addition to the support for businesses, commencing September 8, Canada will mirror the U.S. tariffs by levying duties on $27.6 billion of equivalent American goods.
“This poses an unprecedented challenge for Canada, but we will rise to the occasion. Canadians will unite, and together, we will face this challenge,” stated Champagne during the announcement held at an Ottawa-based roofing company.
The assistance package, as outlined by officials speaking on background earlier, supplements the nearly $25 billion in tariff support that has been rolled out over the past 18 months.
The measures are strategically tailored to provide aid to workers and businesses, with a specific focus on 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 swift response initiative benefiting workers and employers. As part of this initiative, funds will be directed towards extending three Employment Insurance (EI) modifications initially introduced in September 2025, including waiving the one-week waiting period for EI claims for an additional year.
Moreover, the government will prolong the period in which workers can receive EI payments without exhausting their separation payments until October 10, 2027, and provide long-tenured employees an extra 20 weeks of EI benefits until June 2027.
New measures being introduced include allowing voluntarily separated workers to collect EI without penalties and facilitating the connection of unemployed or underemployed individuals with major projects in need of staff.
Employers will receive up to $1,000 per employee to cover training and administrative expenses associated with implementing EI work-sharing and retention programs. This initiative will enable employers to reduce an employee’s work schedule while allowing them to collect EI for the reduced hours.
Minister of Jobs and Families Patty Hajdu emphasized the importance of retaining skilled workers during economic downturns to benefit both businesses and employees.
Additionally, the government is investing $2 billion towards establishing the Canada Strong Diversification Fund to support companies impacted by tariffs with capital maintenance projects, particularly aiding medium-sized firms.
Changes to the Large Enterprise Tariff Loan facility (LETL) will offer bigger companies enhanced flexibility, including an extension of the financial support period from 24 to 36 months, and an increase in the maximum loan repayment period from 10 to 15 years.
Medium-sized enterprises will have access to an extra $1.5 billion in funding through one of Canada’s regional development agencies, elevating the cap on non-repayable grants to $3 million and providing interest-free loans of up to $2 million to qualifying businesses.
Minister of Industry Mélanie Joly highlighted that these programs will be accessible to businesses generating over $1 million in revenue.
Furthermore, the Business Development Bank of Canada will extend a second $500 million liquidity stream to provide working capital support for small and medium-sized enterprises experiencing cash flow challenges due to the tariffs.
Businesses directly affected by the tariffs can apply for loans ranging from $250,000 to $5 million, with the option to make interest-only payments for 36 months, extending beyond the current presidential term.
Canada’s retaliatory tariffs will mirror those imposed by the U.S. on Canadian exports, targeting over 700 products identified by the Trump administration under Section 338 and 232 tariffs.
The Canadian tariff strategy is designed to safeguard domestic industries rather than generate revenue, matching U.S. tariff rates on corresponding products where Canadian alternatives exist.
Prime Minister Mark Carney held discussions with opposition leaders to update them on the government’s response to the escalating trade tensions. NDP Leader Avi Lewis supported the government’s decision to walk away from negotiations and suggested additional measures such as export taxes on oil and gas to exert pressure on the U.S.
Following the meeting, Conservative Leader Pierre Poilievre urged the release of the rejected agreement text and proposed an emergency economic action plan to save jobs and reduce costs for Canadians. Industry Minister Mélanie Joly dismissed Poilievre’s demands, emphasizing the government’s commitment to supporting workers and businesses.
The government’s comprehensive support package aims to mitigate the impact of tariffs on Canadian workers and businesses, ensuring economic resilience and stability during challenging times.