The Canadian government, led by the Honourable François-Philippe Champagne, Minister of Finance, has introduced a series of measures aimed at supporting Canadian businesses and entities grappling with the effects of U.S. tariffs. Announced on April 15, 2025, these initiatives are designed to reduce the impact of retaliatory tariffs, foster economic resilience, and safeguard Canadian jobs and industries amidst a challenging trade environment.
The trade dispute escalated earlier this year when the U.S. imposed tariffs on Canadian goods under the International Emergency Economic Powers Act. On March 4, 2025, the U.S. targeted Canadian exports, prompting Canada to respond with 25% tariffs on $30 billion worth of U.S. goods, including spirits, appliances, apparel, footwear, motorcycles, cosmetics, and certain pulp and paper products.
The situation intensified on March 12, when the U.S. applied tariffs on all Canadian steel and aluminum products. Canada retaliated with 25% reciprocal tariffs on U.S. steel products worth $12.6 billion, aluminum products worth $3 billion, and additional U.S. goods valued at $14.2 billion, totaling $29.8 billion. The list of affected U.S. products includes tools, computers, servers, display monitors, sports equipment, and cast-iron products.
The dispute reached a new level on April 3, when the U.S. imposed 25% tariffs on Canadian automobiles, specifically targeting the non-U.S. content of CUSMA-compliant vehicles. Canada responded on April 9 by imposing 25% tariffs on non-CUSMA-compliant U.S.-made vehicles and the non-Canadian and non-Mexican content of CUSMA-compliant U.S.-made vehicles.
These tit-for-tat measures have significantly disrupted cross-border trade, particularly in integrated sectors like automotive manufacturing, steel, and aluminum, which are vital to both economies.
To alleviate the burden on Canadian businesses, Minister Champagne outlined three key initiatives as part of the government’s broader strategy to counter the U.S. tariffs.
Recognizing the deeply integrated nature of the North American automotive sector, the government introduced a performance-based remission framework for automakers. This initiative allows automakers that continue to manufacture vehicles in Canada to import a certain number of U.S.-assembled, CUSMA-compliant vehicles into Canada without facing the countermeasure tariffs imposed by Canada.
The remission is contingent on automakers maintaining production levels in Canada and fulfilling planned investments. If a company reduces its Canadian production or investment, the number of tariff-free vehicles it can import will be proportionally reduced. This measure aims to incentivize continued investment in Canada’s automotive sector while providing relief from the financial strain of tariffs.
The second measure provides a temporary 6-month relief period for goods imported from the U.S. that are critical to Canadian industries and public services. This relief targets sectors such as manufacturing, processing, food and beverage packaging, as well as entities supporting public health, healthcare, public safety, and national security, including hospitals, long-term care facilities, and fire departments.
The initiative offers immediate financial relief to businesses that rely on U.S. inputs, giving them additional time to adjust their supply chains and prioritize domestic or non-U.S. sources where possible. This temporary remission is part of a broader effort to enhance Canada’s economic resilience by reducing dependency on U.S. suppliers.
The third measure involves the operational launch of the Large Enterprise Tariff Loan Facility (LETL), which was initially announced by the Prime Minister in March 2025. Managed by the Canada Development Investment Corporation (CDEV) through its subsidiary, the Canada Enterprise Emergency Funding Corporation (CEEFC), the LETL is now accepting applications.
The facility provides financing support to large Canadian enterprises that are struggling to access traditional market financing due to the tariffs and countermeasures. Eligible businesses must have a significant impact on Canada’s economy, including a substantial workforce in Canada, annual Canadian revenue of approximately $300 million or more, and require a minimum loan size of $60 million.
The LETL targets companies in sectors critical to Canada’s food security, energy security, economic security, and national security, ensuring they can sustain operations and maintain jobs. Businesses already involved in insolvency proceedings prior to the tariff dispute are not eligible.
The Canadian government has committed to introducing additional measures in the coming weeks and months as needed to further support businesses and workers. The federal government will also collaborate closely with provinces and territories to ensure complementary support mechanisms are in place across all jurisdictions. This coordinated approach aims to provide a robust safety net for Canadian industries and workers affected by the trade dispute.
Minister Champagne emphasized the government’s unwavering commitment to defending Canadian interests. “From day one, the government has reacted with strength and determination to the unjust tariffs imposed by the United States on Canadian goods,” he stated. “We continue to stand by Canada’s workers and businesses. Today, 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.”
Following the initial imposition of Canadian surtaxes on March 4, the government established a framework for exceptional relief from retaliatory tariffs. This framework allows businesses to request relief under specific conditions, such as when goods used as inputs cannot be sourced domestically or from non-U.S. sources, or in cases where exceptional circumstances could severely impact the Canadian economy.
Additionally, Canada is assessing the U.S. tariffs on steel and aluminum content in derivative products and may impose further counter-tariffs in response. The government is also ensuring that its remission process considers requests for relief from these new tariffs to mitigate their impact on Canadian workers and businesses.
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