Ottawa reveals $6.5-billion plan to help businesses and workers impacted by Trump’s tariffs

The federal government on Friday announced an aid package totalling more than $6 billion and new employment insurance (EI) rules to support businesses and workers caught up in an ever-evolving trade dispute initiated by U.S. President Donald Trump.

 

Ottawa plans to spend $5 billion over two years, starting now, to launch a new program that would help exporters find new markets for Canadian products and help companies respond to the impacts of tariffs.

 

Another $500 million will go toward a program to offer loans at preferred interest rates to businesses in sectors directly hit by tariffs.

 

An additional $1 billion in new lending through Farm Credit Canada was also unveiled to help Canada’s agriculture and food industry with potential cash-flow challenges.

 

“Today, I’m outlining the mitigation portion of our plan and the steps we are taking as a government to protect our workers and see them through the crisis, come hell or high water,” Labour Minister Steven MacKinnon told reporters, as he was joined by International Trade Minister Mary Ng and Small Business Minister Rechie Valdez.

For workers specifically, that plan includes bringing in temporary changes that would make Canada’s EI Work-Sharing Program more accessible.

 

“The work-sharing program is not a well known program, but it is a vital one,” MacKinnon said.

 

“The program allows employers to keep workers on their payroll in their jobs without resorting to layoffs. It does this by temporarily reducing employee working hours during slower periods so that workers can stay on the books until normalcy returns, at which point they would return to work full-time.”

 

MacKinnon said the changes include expanding the maximum length of agreements from 38 weeks up to 76 weeks and broadening the types of employers and employees who can benefit from the program: for-profit and charitable sectors are now eligible, as are employees working in cyclical or seasonal jobs.

 

Ng, explaining Export Development Canada’s $5-billion program, said it will include working capital solutions “to help companies manage existing contracts and to address the potential decreases in U.S. sales” and credit insurance to protect companies from losses in the event of nonpayment from their foreign buyer when shipping goods or providing services internationally. It will also offer a foreign exchange facility guarantee to help manage “the risks that will arise from currency fluctuations, allowing them to stabilize costs and protect their profit margins from adverse currency movements.”

 

The Business Development Bank of Canada (BDC), which is making available the $500 million in new financing, said “the support is reserved for (small and medium enterprises) that have experienced paused or cancelled contracts, increased costs or other direct impacts upon their financials because of U.S. tariff uncertainty.”

 

Trump on Thursday announced that Canada would get a temporary reprieve from U.S. tariffs on some Canadian products until April 2, at which point the U.S. president threatened tariffs on all global imports. He said 25 per cent tariffs scheduled to be imposed on steel and aluminum imports next week will still go ahead.

 

Trump said Friday he was planning to impose a 250 per cent tariff on Canadian dairy imports, possibly “as early as today,” and also took aim at Canada’s lumber sector.

 

MacKinnon said Friday that the EI measures can be implemented without requiring legislative changes that would need Parliament to be recalled. In January, Gov. Gen. Mary Simon granted Prime Minister Justin Trudeau’s request to prorogue Parliament until March 24.

 

“But a custom package, of course, would require a budget and budget proposals and a law, and that could come in any scenario really quickly after a return of Parliament,” MacKinnon said.

 

When asked about what kind of problems a snap election call could cause in the creation of further measures, MacKinnon said: “obviously, ministers remain ministers, election campaign or not. But there is … a convention that major decisions must be deferred, that, in my interpretation, does not extend to emergencies.”

He said that while the full scope of tariffs, and an early election campaign, remain “hypothetical” for now, Canada’s response to the U.S. will be “one of the great debates” that would unfold during a federal contest.

 

Earlier Friday, NDP Leader Jagmeet Singh unveiled his party’s “worker-first” plan to respond to Trump’s threats.

 

That included calling for barriers to be removed in accessing EI by dropping the threshold for qualifying, introducing benefits for “at-risk contractors and the self-employed,” extending the duration of benefits to 50 weeks, and eliminating the one-week waiting period, among other measures.

 

MacKinnon said he hasn’t yet introduced further changes because “the ball seems to bounce every day.”

 

“We have every intention of customizing our response to tariffs or no tariffs, as the case may be from the United States,” MacKinnon said.

 

“Our first duty is to make sure these tariffs do not get imposed on Canada.”

 

 

 

 

This article was first reported by The Star