Ottawa has announced a $6 billion aid plan for businesses in response to U.S. tariffs.
Minister of International Trade Mary Ng, Minister of Small Business Rechie Valdez, and Employment Minister Steven MacKinnon made the announcement during a March 7 news conference.
The announcement comes as U.S. President Donald Trump went ahead with removing the pause on 25 percent blanket tariffs on Canadian goods on March 4, only to give another one-month pause two days later for the products covered by the United States-Mexico-Canada (USMCA) free trade agreement.
“These measures will provide stability to our sectors at a time of great unrest and uncertainty, and more than anything else, they will help keep more workers in their jobs, more businesses running, and more factory floors humming,” MacKinnon said.
Ottawa said it is introducing a Trade Impact Program that will deploy $5 billion over two years.
The goal is to help exporters find new markets for Canadian products. It will also help businesses handle economic challenges like losses from non-payments, currency fluctuations, lack of access to cash flow, and barriers to expansion, the government said.
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The program will be run through Export Development Canada.
The government also said that $500 million will be available in loans through the Business Development Bank of Canada (BDC). It will be aimed at businesses in sectors that are directly impacted by tariffs.
The loans from BDC include six-year working capital loans from $100,000 to $2 million to businesses. The federal government said that “favourable terms” could provide some flexibility such as postponing principal payments for up to a year. Interest rates will be BDC’s base rate minus 2 percent.
“This will reduce borrowing costs when businesses need it the most,” Valdez said.
Ng said that businesses need to diversify into new markets.
“While our trade relationship with the United States remains important, we must also continue the work that we have been doing since 2015, and that is to diversify into markets beyond the United States. We have 15 free trade agreements where Canadian companies have access to over 65 percent of the world’s economy across over 50 countries,” Ng said.
She said in 2018, the government set out to increase non-U.S. exports by 50 percent by 2025.
“We are well our way to exceeding that target and that goal of diversifying,” Ng said.
She also said that there may be more aid if needed.
“We will keep assessing the needs as the needs emerge,” Ng said.
MacKinnon said the aid package announced will not impact the federal government budget.
“The measures that were announced by my colleagues this morning are loans, even if they are loans below market price. The impact on Crown corporations is fairly minimal, so you will not see major fiscal measures in the budget that are new or that would really impact our predictions,” MacKinnon said.
Trump has said that further tariffs will be coming on April 2, after his team reviews existing trade agreements. He said on March 7 that he’ll put tariffs on Canadian lumber and dairy products due to Canada’s supply management system. Separately, the United States will start imposing 25 percent tariffs on all steel and aluminum imports, including from Canada, starting on March 12.
Agriculture Support
Ottawa says that $1 billion in new financing will be available through Farm Credit Canada for those in the agriculture and food industry.
“Farm Credit Canada’s (FCC) program is launching the Trade Disruption Customer Support program, and this new program will offer relief to both existing customers and new applicants who meet the lending criteria,” Ng said.
FCC will offer loans for customers, and non-customers, in agriculture and food sectors that meet necessary lending criteria, the government said in a news release.
The loans could be up to $500,000.
Current FCC customers have an option of deferring principal payments for up to a year on existing loans, Ottawa said.
The federal government said it will also maintain its $250,000 interest-free loan limit of Advanced Payments Program (APP) for the 2025–26 program year. It had been set to expire on April 1.
APP offers $1 million in total advances based on the value of the agriculture products produced or stored, up to 18 months to fully repay the monies for most products, and 24 for cattle and bison, the news release said.
Temporary EI Changes
Temporary changes will also be made to the EI Work-Share Program for businesses who see a drop in business activity.
The program offers EI benefits to employees who opt to work reduced hours for employers who have seen a decrease in business activity beyond their control.
It offers a supplement to reduced wages while ensuring the employee is not laid off and can return to regular work hours when the business activity increases.
“It consists of agreements with employers such that employees can reduce their hours, spread the work across the same number of employees, while compensating those employees through EI for lost time or lost wages,” MacKinnon said.
He also said that not-for-profit and charitable organizations would now also be eligible, as well as those who work seasonal jobs.
“We are also expanding the maximum length of agreements from 38 weeks up to 76 weeks. We are moving ahead with these changes despite yesterday’s pause, because businesses and workers need assurance,” MacKinnon said.
