When the U.S. first announced tariff in early March, the Canadian government quickly rolled out an enormous relief package to support businesses feeling the tension. This package included some major boosts, like a $5 billion Trade Impact Program run by Export Development Canada (EDC), an extra $1 billion in financing specifically through Farm Credit Canada, and another $500 million in fresh loans via the Business Development Bank of Canada (BDC).
In response to recent escalating trade tensions and the imposition of U.S. tariffs on Canadian goods, the Canadian government has unveiled yet another new comprehensive relief package aimed at supporting domestic businesses. The following new initiatives seek to offset the adverse effects of the tariffs and support the resilience of Canada’s economy.
“From day one, the government has reacted with strength and determination to the unjust tariffs imposed by the United States on Canadian goods. We continue to stand by Canada’s workers and businesses.”
– François-Philippe Champagne, Canada’s Minister of Finance
Government Funding Support Through the Large Enterprise Tariff Loan (LETL) Facility
The Government of Canada has launched the new Large Enterprise Tariff Loan (LETL) facility to assist eligible large businesses facing challenges because of the tariffs. This program will provide access to liquidity for companies contributing to Canada’s food, energy, economic, and national security, helping them sustain operations and maintain employment levels.
Administered by the Canada Development Investment Corporation (CDEV) through its Canada Enterprise Emergency Funding Corporation (CEEFC) subsidiary, LETL offers loans starting at $60 million to companies with significant operations in Canada and annual revenues exceeding $300 million. Eligible applicants must demonstrate a commitment to minimizing job losses and sustaining business activities within the country.
“We’re giving Canadian companies and entities more time to adjust their supply chains and become less dependent on U.S. suppliers. This will help make our economy stronger and more resilient.”
– François-Philippe Champagne, Canada’s Minister of Finance
Strategic Support for Key Canadian Industries
Recognizing the vulnerability of certain sectors, Canada has unveiled targeted measures tailored to industries hardest hit by the U.S. tariffs, notably automotive, manufacturing, and critical public health sectors.
A pivotal announcement includes a six-month exemption from Canadian counter-tariffs on select imports from the U.S. These exemptions particularly benefit manufacturers reliant on U.S.-sourced inputs for production, allowing businesses to maintain competitiveness and stabilize operational costs in the short term.
Among the most significantly affected by recent trade disruptions, the automotive industry has received additional, specialized support. Canadian-based automakers are now permitted to import a specified quota of vehicles assembled in the United States tariff-free. This measure is contingent upon automakers’ commitments to maintaining local production and upholding their investment plans within Canada, ensuring that the sector continues to thrive despite challenging trade conditions.
Moreover, the government has launched a substantial $2 billion Strategic Response Fund specifically designed to safeguard automotive jobs and stimulate further industry innovation amidst ongoing tariff challenges.
Employment Protection and Economic Growth
Beyond immediate financial support, the Canadian government is proactively addressing potential employment disruptions and broader economic repercussions. New Employment Insurance (EI) measures have been introduced to directly support workers impacted by foreign tariff actions. These adjustments aim to provide quicker, more comprehensive access to financial relief for affected individuals, ensuring workforce stability and continued consumer spending in impacted communities.
Furthermore, the Canadian government has announced plans to expedite development of a $5 billion national Trade Diversification Corridor Fund, strategically designed to enhance Canada’s trade infrastructure, attract new investments, and stimulate sustainable job creation nationwide.
A Strategic Response to Protect Canadian Business
With these wide-ranging relief measures, the Government of Canada aims to demonstrate a robust and strategic response aimed at mitigating the immediate impacts of U.S. tariffs on Canadian businesses.
“We take these measures reluctantly. And we take them in ways that are intended and will cause maximum impact in the United States and minimum impact in Canada.”
– Mark Carney, Prime Minister of Canada
Businesses across affected sectors are encouraged to promptly explore and leverage these newly available funding programs, ensuring sustained economic stability and continued prosperity amid shifting international trade dynamics. Connect with our team to learn more about navigating your funding opportunities.