Canada is rolling out a $7.5B support package for Canadian workers and businesses affected by ongoing trade disputes with the U.S.
The Canadian government is escalating its response to the latest round of U.S. tariffs, announcing new counter-tariffs on $27.6 billion worth of U.S. imports.
The measures were announced August 25 by Finance and National Revenue Minister François-Philippe Champagne, Industry Minister Mélanie Joly, Minister of Artificial Intelligence and Digital Innovation Evan Solomon and Jobs and Families Minister Patty Hajdu.
The announcement follows the suspension of trade negotiations between Canada and the United States. According to the federal government, the U.S. recently proposed new terms that Canada considered against the country’s best interest.
The government said it chose to suspend negotiations rather than accept an agreement. It claims doing so would undermine Canadian workers, businesses, strategic sectors and the national interest.
“Canada did not choose this trade conflict, but we need to respond to provide a level playing field to our businesses,” the press release states.
Canada to match U.S. tariffs dollar for dollar
The latest measures come after the United States imposed a 50 per cent tariff on $27.6 billion of Canadian goods, effective August 22.
Canada will respond by imposing additional tariffs on U.S. goods, matching the new U.S. tariffs “dollar for dollar, rate for rate.”
Beginning September 8, Canada will impose counter-tariffs of 15, 25 and 50 per cent, depending on the product. The rates will correspond to the applicable U.S. tariffs under U.S. Section 338 and Section 232.
The Canadian counter-tariffs will cover $27.6 billion in imports from the United States, with a focus on sectors most affected by U.S. tariffs.
These include:
- Steel
- Dairy
- Appliances
- Agricultural equipment
- Pulp and paper
- Electronics
The federal government’s stated objective is to protect Canadian workers, producers and manufacturers affected by U.S. tariffs and put them in a stronger competitive position against U.S. products in the Canadian market.
Among the products facing a 50 per cent Canadian counter-tariff will be steel and aluminum products that were previously subject to a 25 per cent counter-tariff, as well as furniture and clothing and apparel.
Products facing a 25 per cent counter-tariff will include appliances, dairy products such as cheese, fish and seafood, and certain steel and aluminum derivative products.
Other existing Canadian counter-tariffs, including those on autos, will remain in place. The government’s tariff remission framework will also remain available to consider requests for exceptional relief.
“When the United States asked too much and offered too little, we chose to stand up for Canadians,” Champagne said. “Our dollar-for-dollar, rate for rate counter-tariffs as well as a multi-billion dollar support package will protect workers, farmers, families, and businesses as we build a stronger, more resilient, and more diversified Canadian economy.”
Canada’s $7.5 billion in new and enhanced support
Alongside the counter-tariffs, the federal government is introducing $7.5 billion in new and enhanced measures to support Canadian workers and businesses affected by U.S. tariffs.
The package builds on what the government says is nearly $25 billion in support provided since the implementation of the U.S. tariffs.
The new measures include:
$1.5 billion for regional tariff response
The government is adding $1.5 billion to the Regional Tariff Response Initiative, which is delivered through Canada’s regional development agencies.
The funding is intended to help small and medium-sized enterprises manage tariff-related pressures, including liquidity needs.
$500 million in new BDC liquidity
The Business Development Bank of Canada will receive a new $500 million liquidity stream through its Pivot to Grow program.
The funding is intended to help businesses manage immediate cash-flow pressures, alongside targeted programs for the forestry, steel and aluminum sectors.
The government is also broadening access to BDC’s tariff-related programs by lowering the minimum revenue requirement for applicants to $1 million.
$2 billion Canada Strong Diversification Fund
The government is providing an additional $2 billion through a new Canada Strong Diversification Fund.
The fund will support tariff-affected businesses with “shovel-ready” projects that support ongoing capital maintenance. The initiative will work with regional development agency programming on project intake and triage.
The Canada Strong Diversification Fund will be administered through the Strategic Response Fund. Its aim is to help companies adapt and thrive amid trade disruptions.
$3.5 billion for workers and employers
The government is also introducing a new suite of $3.5 billion in Rapid Response Supports for Workers and Employers.
The measures are intended to help Canadians affected by tariffs access income support when needed through extended and additional Employment Insurance temporary flexibilities.
The package will also support workers transitioning into new opportunities through investments in workplace training and enhancements to Job Bank.
For employers, the new Worker Retention and Retraining Program (WRRP) is intended to help businesses retain their workforce during a difficult period.
The government is also introducing new flexibilities to the Large Enterprise Tariff Loan facility, administered by the Canada Enterprise Emergency Funding Corporation.
Ottawa says more measures could follow
The federal government said it will continue to assess programs and policies designed to support businesses affected by tariffs.
That could include expanding existing measures to sectors that become newly impacted by the trade dispute.
Joly said the government’s focus is on strengthening Canada’s ability to compete as the global economic environment becomes more uncertain.
“In a more uncertain world, Canada will continue to invest in our greatest strengths: our workers, our businesses, and our capacity to compete,” Joly said.
“Today’s new measures will protect jobs, strengthen the industries that drive our economy, and secure the supply chains that underpin our prosperity. Canada will not simply respond to change, we will shape it, growing a stronger economy that delivers opportunity, security, and prosperity for Canadians.”
Hajdu similarly emphasized the government’s focus on Canadian workers and businesses.
“Canada has what the world wants, and we will not allow any nation to determine our future. We will always stand up for Canadian workers and businesses,” she said.
“We are strong because we take of each other and that is why we will always be masters of our own destiny.”
Dominic LeBlanc, President of the King’s Privy Council for Canada and Minister responsible for Canada-U.S. Trade, Intergovernmental Affairs, Internal Trade and One Canadian Economy, said the government is focused on supporting Canadians affected by the tariffs.
“Canadians expect their government to stand up for them and their interests. As the United States impose unjustified tariffs, Canada’s government is focused on building our strength at home and protecting our economy,” LeBlanc said.
“Today’s countermeasures will ensure workers, farmers, families, and businesses affected are supported throughout this period of uncertainty. Together, we will weather this storm—united and resilient.”
For Canadian businesses and workers, the immediate focus will now turn to the September 8 implementation date, the availability of the new support programs and the future of negotiations between Canada and the United States.
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