Days after trade negotiations with the Trump administration fell through, the Liberal government is introducing a $7.5 billion relief package to assist workers and businesses in coping with the newly imposed 50% tariffs on $27.6 billion worth of Canadian goods by the U.S. president.
Finance Minister François-Philippe Champagne, along with other government officials, disclosed on Tuesday that in addition to supporting businesses, starting September 8, the government will reciprocate the U.S. tariffs by imposing equivalent tariffs on $27.6 billion of comparable American goods.
“This presents a unique challenge for Canada, but we are ready to face it unitedly,” Champagne stated during the announcement at a roofing company in Ottawa. “We are committed to backing our workers, businesses, and industries with necessary resources for as long as needed.”
Officials, speaking on background earlier, clarified that the support package supplements the nearly $25 billion in tariff assistance provided over the last 18 months.
The relief measures are tailored to provide aid to workers and businesses, particularly focusing on small- and medium-sized enterprises nationwide.
Under the relief package, the Liberal government is allocating $3.5 billion of the $7.5 billion funding towards a swift response initiative for workers and employers. It includes extending existing enhancements to Employment Insurance (EI) benefits, such as waiving the one-week waiting period for another year, allowing workers to receive EI without exhausting their separation payments until October 2027, and granting long-tenured employees an additional 20 weeks of EI until June 2027.
Additionally, two new measures will allow workers who voluntarily leave their jobs to collect EI without penalties and aid in connecting unemployed or underemployed workers with essential projects requiring staff.
Employers will receive up to $1,000 per employee to cover training and administrative costs for implementing EI work-sharing and retention programs. This initiative enables employers to reduce work schedules and employees to collect EI for reduced workdays at a higher income percentage.
The government is investing $2 billion in establishing the Canada Strong Diversification Fund to assist tariff-affected companies with capital maintenance projects. Moreover, significant companies will benefit from extended flexibility through modifications to the Large Enterprise Tariff Loan facility (LETL).
The LETL, initiated in March 2025, will now offer eligible companies 36 months of financial support, with the maximum loan repayment period extended to 15 years from 10 years. Medium-sized enterprises can access an additional $1.5 billion in funding through regional development agencies, with enhanced grant caps and interest-free loans.
Furthermore, the Business Development Bank of Canada will provide a second $500 million liquidity stream to offer working capital support for small- and medium-sized businesses facing cash flow challenges. Eligible companies can apply for loans ranging from $250,000 to $5 million, with an option for interest-only payments for 36 months.
Canada’s retaliatory tariff strategy will mirror the U.S. tariffs on over 700 products, focusing on industries where Canadian alternatives are available. The retaliatory measures target products hit by Section 338 and 232 tariffs imposed by the Trump administration.
Prime Minister Mark Carney engaged with federal opposition leaders to discuss the government’s response to the escalating tariffs. Opposition leaders emphasized the importance of a united approach to protect jobs and the economy.
The NDP Leader supported the government’s decision to walk away from negotiations and suggested imposing additional export taxes on oil and gas. The Conservative Leader demanded transparency on the rejected agreement and urged immediate economic action to save jobs and reduce costs for Canadians.
In response to the Conservative Leader’s demands, Industry Minister Mélanie Joly defended the government’s initiatives, highlighting the Conservatives’ historical opposition to aid measures for workers and businesses.