In the wake of the stalled trade negotiations with the Trump administration, the Liberal government is launching a $7.5 billion initiative aimed at assisting workers and businesses cope with the recent 50 percent tariffs imposed on $27.6 billion worth of Canadian goods by the U.S. president.
On Tuesday, Finance Minister François-Philippe Champagne, along with other ministers, revealed that in addition to supporting businesses, starting from September 8, the government will impose matching tariffs on $27.6 billion of similar U.S. goods.
“This is an extraordinary challenge that Canada faces, but we will rise to the occasion; Canadians will rise to the occasion, and we will face this together,” Champagne stated during the announcement at a roofing firm in Ottawa.
“We will provide our workers, businesses, and industries with whatever assistance is required, and for as long as necessary.”
Officials provided background information indicating that this support package is in addition to the nearly $25 billion in tariff assistance that has been provided over the past 18 months.
The initiatives are aimed at prioritizing support for workers and businesses, especially small to medium-sized enterprises throughout the nation, according to officials.
Support for workers and small businesses
As part of the support initiative, the Liberal government is allocating $3.5 billion from the $7.5 billion assistance fund toward a rapid response program for both workers and employers.
Some of these funds will be used to extend three changes to Employment Insurance (EI) first announced in September 2025, which were set to end on October 10, including:
- Extending the waiver of the one-week waiting period for EI claims for another year.
- Allowing workers to receive EI benefits without first depleting their separation payments until October 10, 2027.
- Providing an additional 20 weeks of EI benefits for long-tenured employees until June 2027.
Finance Minister François-Philippe Champagne states that Canada will proportionately and strategically match the latest U.S. tariffs, emphasizing that the tariffs impacting more than $27 billion in U.S. goods are about fairness.
Two new initiatives will also allow workers who voluntarily resigned to collect EI without penalty, and assist in connecting unemployed or underemployed individuals with major projects requiring staff.
Employers will receive up to $1,000 per employee to assist with training and administrative expenses related to implementing EI work-sharing and retention programs.
This arrangement enables an employer to reduce an employee’s workweek from five days to two, allowing the employee to collect EI for the remaining three days at 70 percent of their income, rather than the standard 55 percent.
“Maintaining skilled workers during slow periods allows businesses to keep talent, which in turn helps employees navigate challenging times for their employers,” commented Minister of Jobs and Families Patty Hajdu.
Funding and loans
Additionally, the government is investing $2 billion to establish the Canada Strong Diversification Fund, aimed at “supporting companies affected by tariffs with projects that are ready to go and that facilitate ongoing capital maintenance, including for medium-sized enterprises.”
Large companies will benefit from increased flexibility due to modifications to the government’s Large Enterprise Tariff Loan (LETL) scheme.
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Initially announced in March 2025, the LETL offers qualified companies 24 months of financial liquidity. Under the current support plan, this period is being extended to 36 months, and the maximum loan repayment duration will increase from 10 years to 15 years.
Medium-sized businesses across the country will also have access to an additional $1.5 billion in funding through one of Canada’s seven regional development agencies.
This additional funding raises the cap on non-repayable grants from $1 million to $3 million. Furthermore, liquidity support in the form of interest-free loans up to $2 million will also be available for qualifying companies.
Industry Minister Mélanie Joly indicated that these programs would be accessible to businesses generating more than $1 million in revenue.
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The Business Development Bank of Canada will have an additional $500 million liquidity source to provide working capital assistance for small and medium-sized enterprises facing cash flow challenges.
Businesses directly affected by the tariffs will qualify for loans between $250,000 and $5 million, with the option to make interest-only payments for 36 months, extending beyond the conclusion of Trump’s second term.
Canada’s new retaliatory tariff system
The retaliatory tariffs will target the same products that the Trump administration identified when it directed Canada to face Section 338 and 232 tariffs. A comprehensive list of over 700 products affected can be found online.
U.S. President Donald Trump’s Section 232 tariffs, ranging from 10 to 50 percent, have been imposed on steel, aluminum, copper, automobiles, lumber, their derivatives, and specific semiconductors.
The 338 tariffs affect a variety of Canadian products, from hockey sticks and alcohol to dairy, and were enacted on Saturday following the breakdown of trade negotiations between the two nations.
Officials indicated that Canada’s tariff system is designed to safeguard Canadian industries rather than simply generate revenue. Therefore, the tariff rate for a specific product in Canada will align with the corresponding U.S. tariff rate.
Ministers noted that they have strategically selected U.S. goods for tariffs where Canadian-made alternatives exist.
Earlier on Tuesday, Prime Minister Mark Carney engaged in a call with federal opposition leaders to brief them on his government’s response to Trump’s recent tariff escalation.
According to a readout from the Prime Minister’s Office, “The prime minister and the leaders discussed the ongoing strategy and stressed the significance of a unified Team Canada effort as Canada strives to protect jobs, bolster the economy, and advocate for Canadian interests.”
NDP Leader Avi Lewis expressed to CBC’s Power & Politics his support for Carney’s decision to “walk away” from negotiations. Lewis stated he “strongly” advocated for additional measures, such as export taxes on oil and gas, to pressure the Americans.
“We are dealing with a ruthless counterpart, and New Democrats want to see the government leverage the power that Canada possesses,” Lewis remarked.
Following the meeting, Conservative Leader Pierre Poilievre released a statement urging Carney to disclose the text of the rejected agreement, call Parliament back into session, and “implement an emergency economic action plan to protect jobs and reduce costs for Canadians.”
Such a plan would necessitate the government eliminating all gas taxes until the next Canada Day and exempting individuals who reinvest in Canada from capital gains taxes, in addition to other initiatives promoted during the Conservatives’ last federal election campaign.
Joly dismissed Poilievre’s requests, asserting that the Conservative leader has consistently opposed Liberal efforts to support workers and businesses.
“Mr. Poilievre should practice what he preaches,” Joly remarked.