Canadian businesses are feeling the impact of market uncertainty amidst the tariff landscape. In response, the Canadian federal government (the "Government") has responded by rolling out new support programs and initiatives.
New relief programs just announced
On April 15 the Minister of Finance announced three new measures to support Canadian businesses. These measures include:
- Temporary six-month relief for goods imported from the U.S. that are used in Canadian manufacturing, processing and food and beverage packaging, and for those used to support public health, health care, public safety and national security objectives. This remission is for a limited time to give additional time to adjust supply chains and prioritize domestic sources as suppliers.
- The Large Enterprise Tariff Loan Facility is now accepting applicants. This program supports eligible large businesses – including those in the national food, energy or economic security industries – that are experiencing difficulty obtaining financing.
- A performance-based remission framework for automakers, designed to incentivize continued production of vehicles in Canada.
Additional federal support programs and initiatives announced in response to tariffs
The Government has outlined a framework and process for consideration of remission requests for tariffs on U.S. products. Under specific circumstances, the remission program may allow for relief from payment of tariffs or the refund of tariffs already paid.
For the tariffs announced on March 4, 2025, the Government will consider remission in two instances:
- where goods used as inputs cannot be sourced domestically, either on a national or regional basis, or from non-U.S. sources; or
- on a case-by-case basis, other exceptional circumstances that could have adverse impacts on the Canadian economy.
The Department of Finance will assess remissions, in consultation with other relevant federal departments and other interested parties. The Minister of Finance will make any recommendations to the Governor in Council through the authority outlined in section 115 of the Customs Tariff.
While Canadian companies had some difficulty getting remissions from the steel and aluminum tariffs imposed on China, the expectation is that Cabinet will provide more flexibility for remissions in the case of the tariffs on U.S. goods given the integration of the supply chain. Given the nature of the engagement on these remissions, working with legal counsel is advisable.
The Trade Impact Program, launched through Export Development Canada ("EDC"), is expected to deploy $5 billion over two years. The program aims to assist exporters in reaching new markets for Canadian products as well as navigating the economic challenges imposed by the tariffs such as losses from non-payment, currency fluctuations, lack of access to cash flows, and barriers to expansion.
Canadian exporters are eligible for the program if the exporter:
- sells goods/services to customers outside of Canada's borders;
- creates a good/service that forms part of an international supply chain; or
- plans to export in the future.
Benefits:
- Financing guarantees that enable access to additional financing to manage cashflow and growth;
- Financing solutions that offer opportunities to grow trade capacity, expand into different markets or acquire a foreign company;
- Mitigation of foreign exchange risk that stabilizes costs and protects profit margins from adverse currency fluctuations; and
- Trade credit insurance that protects against losses for non-payment from a foreign buyer.
The Government has made $500 million in favourably priced loans available through the Business Development Bank of Canada to support businesses directly targeted by tariffs and companies in the supply chain.
Minimum eligibility criteria:
- Minimum 25% of sales must be from exports to the U.S. or demonstrate a significant likelihood of being adversely affected by U.S. tariffs;
- Annual sales of $2 million or more;
- Positive cash flow; and
- Able to demonstrate profitability.
Benefits:
- Interest-only payments for up to a year;
- Allows up to 72 months to repay the loan and prepayment at any time without penalty;
- Preferred interest rates; and
- Advisory services such as financial management and market diversification.
Trade Disruption Customer Support Program
The Trade Disruption Customer Support Program is providing $1 billion in new financing through Farm Credit Canada to reduce barriers for the Canadian agriculture and food industry.
Minimum eligibility criteria:
- Customers and non-customers must meet the necessary lending criteria;
- Businesses must have been financially viable prior to the impact of tariffs; and
- Cannot be provided in the form of grants or other interest-free loans.
Benefits:
- For current customers, defer principal payments for up to 12 months on existing loans;
- Receive access to an additional credit line of up to $500,000; and
- Additional support with a term loan.
Special temporary measures to EI Work-Sharing Program
The standard EI Work-Sharing Program helps employers and employees avoid layoffs during temporary decreases in business activity that is beyond the control of the employer. A work-sharing agreement is a three-party agreement between the employer, employees and Service Canada.
Special temporary measures to the EI Work-Sharing Program are effective March 7, 2025, to March 6, 2026, to support businesses affected by tariffs.
These special measures provide targeted additional support such as extending the maximum number of weeks for a work-sharing agreement, expanding employer and employee eligibility, and waiving the cooling off period between successive work-sharing arrangements. Employers must have been operating in Canada for a minimum of one year and have a minimum of two EI eligible employees that agree to a reduction in hours and to share any available work.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
