Days following the breakdown of trade discussions with the Trump administration, the Canadian Liberal government has unveiled a $7.5 billion aid package to assist workers and businesses in coping with the new 50 percent tariffs imposed on $27.6 billion worth of Canadian exports by the U.S. president.
Finance Minister François-Philippe Champagne and other officials disclosed on Tuesday that in addition to backing businesses, starting September 8, the government will reciprocate the U.S. tariffs by imposing equivalent tariffs on $27.6 billion worth of similar U.S. products.
“This presents an unparalleled challenge to Canada, but we are ready to face it together,” Champagne declared during the announcement at a roofing company in Ottawa. “We are committed to supporting our workforce, businesses, and industries for as long as it takes.”
Previously undisclosed sources highlighted that the aid package supplements the nearly $25 billion in tariff support introduced over the past 18 months.
The assistance initiatives are tailored to provide targeted support to workers and businesses, especially small and medium-sized enterprises nationwide.
Under the support plan, the Liberal government is allocating $3.5 billion of the $7.5 billion fund to a swift response program for employees and employers.
Included in the funding is an extension of three Employment Insurance (EI) modifications, initially announced in September 2025 and set to expire on October 10, such as waiving the one-week waiting period for EI claims for an additional year.
Moreover, workers can now receive EI payments without exhausting their separation payments until October 10, 2027, and long-tenured employees will receive an extra 20 weeks of EI until June 2027.
Additionally, workers who voluntarily quit their jobs can now collect EI without penalties, and efforts are underway to connect jobless or underemployed individuals with major projects in need of staff.
Employers are eligible for up to $1,000 per employee to cover training and administrative costs for implementing EI work-sharing and retention programs, allowing them to reduce work schedules while employees collect EI for the reduced hours.
To support tariff-affected companies, the government is investing $2 billion in the Canada Strong Diversification Fund, focusing on shovel-ready projects for ongoing capital maintenance, especially for medium-sized enterprises.
The Large Enterprise Tariff Loan facility (LETL) is being enhanced to offer 36 months of financial liquidity instead of 24 months, with the maximum loan repayment period extended to 15 years from 10.
Medium-sized enterprises will access an additional $1.5 billion in funding through one of Canada’s seven regional development agencies, with non-repayable grants capped at $3 million and interest-free loans of up to $2 million available for qualifying businesses.
Furthermore, the Business Development Bank of Canada will extend a second $500 million liquidity stream to offer working capital support to small- and medium-sized businesses facing cash flow challenges.
The retaliatory tariffs will mirror the U.S. tariffs on the same goods targeted by the Trump administration in Section 338 and 232 tariffs. Canada’s tariff rates will correspond to the U.S. rates on equivalent products, focusing on industries where Canadian alternatives are feasible for protection rather than revenue generation.
