Following the United States' decision to impose a 50 percent tariff on $27.6 billion of Canadian goods effective August 22, the Government of Canada has confirmed it will respond with matching countermeasures and a substantial new support package for affected workers and businesses.
Government response and negotiations
Finance Minister Francois-Philippe Champagne, joined by Industry Minister Melanie Joly, Jobs and Families Minister Patty Hajdu, and other cabinet colleagues, announced that Canada will impose counter-tariffs of 15, 25 and 50 percent on U.S. goods, matching the American rates dollar for dollar and rate for rate.
Officials noted that Canada had negotiated intensively and in good faith toward a fair and comprehensive trade agreement, but suspended talks after the United States proposed terms that demanded too much and offered too little in return. Canada did not seek this trade conflict, ministers said, but must respond to safeguard its economic interests and sovereignty.
Details of the counter-tariffs
The new Canadian tariffs take effect September 8 and will cover products representing $27.6 billion in annual imports from the United States. Targeted sectors include steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics – areas most harmed by the U.S. measures. Goods subject to the highest percent rate include steel and aluminum products previously under a 25 percent tariff, as well as furniture and clothing.
The 25 percent rate applies to appliances, certain dairy products such as cheese, fish and seafood, and selected steel and aluminum derivatives. Existing counter-tariffs on automobiles remain in place, and Canada's tariff remission framework continues to be available for exceptional relief requests. These measures are designed to level the playing field for Canadian producers in the domestic market, protect workers, farmers, fishers, families and businesses, and defend industries damaged by what Ottawa describes as unjustified U.S. tariffs.
$7.5 billion support package
Alongside the counter-tariffs, the government is introducing a $7.5 billion package of new and enhanced supports that builds on nearly $25 billion already provided since earlier U.S. tariffs took effect. The package prioritises fast, simple and agile assistance, with particular attention to small and medium-sized enterprises and workers in the hardest-hit sectors.
Business liquidity and regional supports
An additional $1.5 billion will strengthen the Regional Tariff Response Initiative delivered through Canada's regional development agencies. This expansion raises the cap on non-repayable contributions and adds liquidity support to help businesses manage tariff-related pressures.
The Business Development Bank of Canada will receive a new $500 million liquidity stream under its Pivot to Grow program, offering working-capital loans of $250,000 to $5 million with interest-only payments over 36 months. Eligibility for BDC's tariff-related programs has also been broadened by lowering the minimum annual revenue threshold to $1 million.
A further $2 billion will create the Canada Strong Diversification Fund as a new stream under the Strategic Response Fund. The fund will support shovel-ready projects that maintain capital investment among tariff-affected companies, including medium-sized firms, with streamlined intake and faster approvals coordinated through regional development agencies.
Rapid response supports for workers and employers
The largest component – $3.5 billion – funds Rapid Response Support for Workers and Employers. Temporary Employment Insurance flexibilities will be extended, including waiving the one-week waiting period, allowing benefits without first exhausting separation payments, providing extra weeks of benefits for long-tenured workers, and removing penalties for workers who recently left jobs voluntarily provided their most recent job loss was through no fault of their own.
Enhanced job-matching tools on JobBank.gc.ca will help connect workers with opportunities linked to major projects, housing initiatives and defence procurement. Employers will benefit from a new Worker Retention and Retraining Program that combines and expands existing work-sharing measures, offering up to $1,000 per participant for training and administrative costs to help companies retain staff during the disruption. Additional flexibilities have been introduced to the $10 billion Large Enterprise Tariff Loan facility, lengthening available liquidity support and extending maximum loan terms to give larger employers greater bridging capacity.