Canada commits over C$6 billion to fight impact of US tariffs, find new markets
C$1 billion for agriculture and food industry
10 March 2025
3 minute read
By: Canada on Friday unveiled billions of dollars in aid and other forms of support to businesses and people expected to be directly affected by US tariffs, reported Reuters.
These relief measures involve over C$6.5 billion ($4.52 billion) of financial aid to help companies tap new international markets, absorb the impact of losses, access easy loans and prevent layoffs, a team of ministers said.
Canada relies on the United States for 75% of its exports and a third of all imports. Its reliance on trade for economic growth leaves the country vulnerable in case of a protracted trade war.
US President Donald Trump's administration imposed 25% tariffs on most imports from Canada and Mexico earlier this week, before announcing a suspension of the charges until April 2 on goods covered by the US-Mexico-Canada Agreement on trade.
"We are moving ahead with these changes despite yesterday's pause because businesses and workers need assurances right now," Labour Minister Steven MacKinnon said at a news conference on Friday.
"We may not know what our American neighbors will do, nor what new tale they will tell, but we are united."
Exporters hurt by tariffs can access funding from a pool of C$5 billion this year and next to help them diversify to new global markets and absorb losses from non-payment, currency fluctuations, hits to cash flows, as well as overcome barriers to expansion, the government said in a statement.
Another C$1 billion is being offered to reduce financial barriers for the Canadian agriculture and food industry, it said, adding that C$500 million has been set aside for low-interest loans.
The government also relaxed rules under the Employment Insurance Work-Sharing Program, a scheme which gives employees job insurance if they agree to work fewer hours and share available work while employers agree to retain staff.
Policymakers, politicians and economists have said the tariffs could hurt sectors including steel and aluminum, automotive, aerospace, farm and dairy, with potentially devastating consequences for the Canadian economy.
Not like pandemic
Exports to the US account for roughly 18% of Canada's GDP and more than 2.4 million jobs in Canada are dependent on business with the US. While just 1% of US GDP is reliant on exports to the north, the US is particularly dependent on Canadian oil.
"We will rally to defend our values, our solidarity, our sovereignty and all hardworking Canadians, because Canada is free, Canada is sovereign, and Canada is forever," MacKinnon said.
Still, MacKinnon said the effect of tariffs would not be like that of the COVID pandemic.
"It would be a more slow, rolling economic impact," he said, adding the government does not expect to offer support to people like it did during the pandemic.
Trade Minister Mary Ng said the ministry was making efforts to diversify Canada's export market and by the end of this year, Canada would surpass its previous goal to diversify its non-US exports by 50%. It is also talking to other countries to get access to their markets, she said.
($1 = 1.4385 Canadian dollars)
