Days following the breakdown of trade discussions with the Trump administration, the Liberal government has unveiled a $7.5 billion aid package to assist workers and companies in coping with 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, disclosed on Tuesday that in addition to the support for businesses, starting on September 8, the government will mirror the U.S. levies by imposing tariffs on $27.6 billion of equivalent U.S. goods.
“This presents an unprecedented challenge to Canada, but we will rise to the occasion as a nation. Canadians will stand united, and together we will overcome this challenge,” Champagne declared during the announcement held at a roofing company in Ottawa.
The support package, as outlined by officials speaking on background earlier, supplements the nearly $25 billion in tariff aid already implemented over the past 18 months. The measures are specifically tailored to provide assistance to workers and businesses, with a focus on small- and medium-sized enterprises nationwide.
Under the aid plan, the Liberal government is allocating $3.5 billion of the $7.5 billion funding towards a rapid response initiative for workers and employers. This includes extending three modifications to Employment Insurance (EI) that were initially announced in September 2025 and were set to expire on October 10:
– Eliminating the one-week waiting period for EI claims for an additional year.
– Extending the ability for workers to receive EI benefits without exhausting their severance pay until October 10, 2027.
– Granting long-tenured employees an extra 20 weeks of EI benefits until June 2027.
Additionally, new measures include allowing voluntarily resigned workers to access EI benefits without penalties and facilitating the connection of unemployed or underemployed individuals with major projects requiring staff. Employers will receive up to $1,000 per employee to cover training and administrative expenses for implementing EI work-sharing and retention programs.
To retain skilled workers during economic downturns, businesses can adjust employee work schedules and allow them to collect EI benefits for reduced work hours, ensuring workers receive 70% of their income for the remaining days, up from the standard 55%.
Minister of Jobs and Families Patty Hajdu emphasized, “Retaining skilled workers during slow periods enables businesses to retain talent and helps workers support their employers through challenging times.”
Furthermore, the government is injecting $2 billion into establishing the Canada Strong Diversification Fund to assist tariff-affected companies with projects that support continuous capital maintenance, particularly medium-sized firms. Larger companies will benefit from enhanced flexibility through modifications to the Large Enterprise Tariff Loan facility (LETL).
The LETL, introduced in March 2025, offers eligible companies 24 months of financial stability. As part of the current support plan, this period is extended to 36 months, and the maximum loan repayment duration is elongated to 15 years from 10. Medium-sized enterprises across the country will have access to an additional $1.5 billion in funding through one of Canada’s seven regional development agencies.
Moreover, the funding cap for non-repayable grants is raised to $3 million from $1 million, and interest-free loans of up to $2 million will be available for qualifying businesses. Industry Minister Mélanie Joly highlighted that these programs are open to businesses with revenues exceeding $1 million.
The Business Development Bank of Canada will administer a second $500 million liquidity stream to provide working capital support for small- and medium-sized businesses facing cash flow challenges. Companies directly affected by the tariffs can apply for loans ranging from $250,000 to $5 million, with the option of making interest-only payments for 36 months, extending beyond the term of President Trump’s second tenure.
Canada’s retaliatory tariff strategy will mirror the U.S. tariffs imposed on comparable goods. The retaliatory measures target products affected by Section 338 and 232 tariffs imposed by the Trump administration, including steel, aluminum, copper, autos, lumber, and certain semiconductors.
The Canadian tariff regime aims to safeguard domestic industries rather than generate revenue, with tariff rates aligning with those set by the U.S. on equivalent products where Canadian substitutes are available. Prime Minister Mark Carney engaged federal opposition leaders to discuss the government’s response to the escalating tariffs.
In a statement, NDP Leader Avi Lewis expressed support for walking away from the negotiation table and advocated for additional measures such as export taxes on oil and gas to pressure the U.S. Conservative Leader Pierre Poilievre called for transparency on the rejected agreement, urging the government to implement an emergency economic action plan to protect jobs and reduce costs for Canadians.
Industry Minister Joly dismissed Poilievre’s demands, emphasizing the government’s commitment to supporting workers and businesses. The government’s response underscores the unity of Canada in defending national interests and fostering economic growth.
