Days following the breakdown of trade negotiations 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% tariffs on $27.6 billion worth of Canadian exports by the U.S. president.
Finance Minister François-Philippe Champagne, along with other ministers, revealed on Tuesday that in addition to the support for businesses, starting on September 8, the government will reciprocate the U.S. levies by imposing tariffs on $27.6 billion worth of similar U.S. products.
“This presents an unprecedented challenge to Canada, but we are ready to face it as a nation. We are committed to supporting our workforce, businesses, and industries with all necessary resources for as long as it takes,” Champagne declared during the announcement held at a roofing company in Ottawa.
Officials, speaking on background earlier, elaborated that this aid package supplements the nearly $25 billion in tariff support provided over the past 18 months.
The assistance measures have been structured to prioritize aiding workers and businesses, with a specific focus on small and medium-sized enterprises nationwide.
Under the aid package, the Liberal government will allocate $3.5 billion of the total funding to a rapid response initiative for workers and employers. This includes extending existing Employment Insurance (EI) enhancements announced in September 2025, such as waiving the one-week waiting period, prolonging access to EI payments without exhausting separation payments, and granting additional EI weeks for long-tenured employees.
Furthermore, newly introduced measures will allow voluntarily departed workers to receive EI benefits without penalties and facilitate 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 related to implementing EI work-sharing and retention programs. This initiative allows employers to reduce work schedules, enabling employees to collect EI for reduced workdays.
In a move to bolster affected companies, the government is investing $2 billion to establish the Canada Strong Diversification Fund, supporting firms impacted by tariffs with ready-to-go projects focusing on ongoing capital maintenance.
Additionally, adjustments to the Large Enterprise Tariff Loan facility (LETL) will provide larger companies more flexibility, extending financial liquidity from 24 to 36 months and increasing the maximum loan repayment period from 10 to 15 years.
Medium-sized enterprises across Canada can access an extra $1.5 billion in funding through regional development agencies, including an increase in non-repayable grants and interest-free loans.
The retaliatory tariffs are designed to counter the U.S. tariffs on various Canadian goods like steel, aluminum, copper, autos, lumber, and more. Canada’s tariff regime aims to protect domestic industries rather than generate revenue, matching U.S. tariff rates on equivalent products while focusing on promoting Canadian-made alternatives.
Prime Minister Mark Carney engaged with opposition leaders to discuss the government’s response to the escalating tariffs, emphasizing a unified approach to safeguard jobs, boost the economy, and uphold Canadian interests.
Overall, the government’s comprehensive measures aim to provide critical support to workers and businesses impacted by the recent trade developments, ensuring resilience and stability in the face of economic challenges.