After a dizzying week of tariff threats, implementation and (at least partial) rollbacks by the Trump Administration, Ottawa last week announced a package of relief measures designed to help businesses and workers navigate the opening salvo of an escalating Canada-U.S. trade war.

It comes at a time of widespread uncertainty. The federal Liberal party has just selected Mark Carney as their new leader and the country’s next prime minister. As such, the likelihood of a spring election in late April or early May is high; with the Liberals and Conservatives neck-and-neck in the polls, the outcome of the next vote is a virtual coin toss. At the same time, Trump’s 25 per cent across-the board tariffs have been delayed until April 2^nd on goods that fall under the United States-Mexico-Canada Agreement, but steel and aluminum levies are set to take effect this week. None, or all, of these tariffs may be implemented. Given the chaotic nature of Trump’s first weeks in office and constant policy shifts, business owners and leaders are being forced to make critical strategic and operational decisions with no clarity on future U.S. trade policy relating to Canadian-made goods.

What political, economic and even tax policy developments lie around the corner are anyone’s guess.

In announcing the proposed federal support package—which could be significantly amended by an incoming government—Minister of Finance and Intergovernmental Affairs Dominic LeBlanc underscored the current government’s determination to mitigate the existential trade risks faced by affected Canadian companies of all sizes. “We are deeply committed to supporting Canadian businesses and workers in the face of the unjustified and unreasonable tariffs the United States has imposed on Canadian goods,” he said. “We have faced economic challenges before, and we know we will overcome this new challenge. The measures announced today as part of our Team Canada response will protect jobs, keep businesses open, and help stabilize Canada’s economy.”

The proposed package includes:

• A new Trade Impact Program that would provide $5 billion in funding over two years to help exporters tap new overseas markets and “… navigate the economic challenges imposed by the tariffs, including losses from non-payment, currency fluctuations, lack of access to cash flows, and barriers to expansion.” The program would be administered through Export Development Canada.
• $500 million in “favourably priced loans” through the Business Development Bank of Canada that would support businesses directly impacted by U.S. tariffs. Funds would also be available to businesses that supply goods and services to those affected companies.
• $1 billion in new financing through Farm Credit Canada to aid Canada’s farm and agriculture sector. This would include “access to an additional credit line up to $500,000 and new term loans. Current FCC customers have the option to defer principal payments for up to 12 months on existing loans.”
• Adjustments to the EI Work-Sharing Program “… to increase access and maximum agreement duration.” The goal is to support workers who agree to work reduced hours due to the potential impact of tariffs on their employer’s business.

The government added that Export Development Canada will work with federal departments to coordinate support measures, while the Business Development Bank of Canada will provide as much as $500 million in six-year working capital loans of between $100,000 and $2 million to qualifying impacted businesses. The loans would be offered at the BDC’s base interest rate minus two per cent, while special terms—such as principal payments delays of as long as 12 months—could be offered. The federal government is also maintaining the Advanced Payments Program’s $250,000 interest-free loan limit for 2025-26. The program was set to expire on April 1^st, 2025.

Earlier, the government also introduced a remission process that enables businesses to apply for exemptions from Canadian tariffs on certain qualifying inputs imported from the U.S.

While Ottawa is promising additional support measures in the weeks and months ahead, politics will dictate which party will form government and will either maintain or amend these support programs—or introduce new ones in response to U.S. tariffs. As always, expect updates from our team as they become available.

The RH Partners Tax Team

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