The federal government recently introduced a significant package of new program and policy measures designed to support tariff-impacted Canadian businesses, industries and workers. While the package was introduced as a tool to position the economy for long-term growth and competitiveness, it was an indicator that trade uncertainty with the U.S. is taking its toll on the Canadian economy.

Recent job growth and productivity data highlights the urgency to support tariff-battered sectors and help workers adjust to the new Trump-era trade reality. The financial commitment to these support programs only underscores the seriousness with which the federal government is taking the challenges facing the Canadian economy.

Some of the key highlights for business include:

Strategic Response Fund (SRF)

• Creation of a $5 billion fund to support large-scale projects for businesses in highly trade-exposed sectors. Funding will be available across industries that have experienced significant revenue or job losses, prioritizing projects critical to maintaining industrial or skills capacity, that would benefit from market diversification and export growth and that have provincial/territorial matching commitments. The funding aims to help cover the costs of retooling, market access and other expenses such as pre-development or engineering design studies. The SRF will replace the Strategic Innovation Fund

Regional Tariff Response Initiative

• Expansion of the initiative from $450 million to $1 billion over three years, providing non-repayable contributions of up to $1 million to eligible small to medium-sized businesses (SMEs) and non-profit organizations impacted by tariffs
• The program is designed to support investments in diversification, technology adoption and new product development
• Projects of more than $20 million may be eligible for the SRF

Immediate Liquidity Relief

• Expansion of BDC loan limits for SMEs from $2 million to $5 million
• More flexible terms (lower interest rates, longer maturities) under the Large Enterprise Tariff Loan Facility
• Flexibility for the auto sector, including exemption from 2026 Electric Vehicle Availability Standards (EVAS) and a broader regulatory review

Workforce support measures

• Investment of $450 million over three years through Labour Market Development Agreements to retrain and upskill 50,000 workers
• Training methods include employer-based programs, wage subsidies, career counselling, and worker outreach
• $50 million over five years to modernize online job tools, including AI integration on the Job Bank platform
• Launch of a national online training platform to connect adults to short-term courses

• $382 million over five years to launch Workforce Alliances. The program will focus on supporting workers in sectors including auto parts, steel, aluminum, energy, critical minerals and advanced manufacturing
• A Workforce Innovation Fund of $50 million to support regional and sector-specific projects to help businesses recruit and retain workers
• A temporary extra 20 weeks of EI benefits for long-tenured workers, up to 65 weeks maximum, starting October 12^th, 2025, and applying retroactively to June 15^th, 2025. The EI enhancement is expected to support about 190,000 workers
• An extension of temporary EI measures to April 11^th, 2026, that will include a suspension of separation payment rules, allowing workers to keep severance while receiving EI ($424 million over two years); and a waiver of the one-week waiting period for EI, supporting an additional 700,000 claimants ($418 million over two years)

Buy Canadian Policy

• Introduction of a new procurement policy prioritizing Canadian suppliers in all federal spending by November 2025. These requirements will cover defence and construction procurements above certain thresholds
• The policy will initially apply to steel and softwood lumber, with measures that include:
  • Local content requirements where Canadian suppliers are unavailable
  • Full implementation of reciprocal procurement to limit non-defence contracts to Canada and trusted trade partners
  • Extension of Buy Canada obligations to infrastructure, grants, contributions, loans and third-party spending, extending the initiative to an additional $70 billion of spending in these areas
  • A Small and Medium-Sized Business Procurement Program to help SMEs access federal contracts
  • Extension of requirements to federal agencies and Crown corporations
  • A roadmap for provinces, territories, and municipalities to adopt similar rules

Agriculture and Biofuels Support

• Introduction of a biofuel production incentive of more than $370 million over two years to support biodiesel and renewable diesel producers from January 2026 to December 2027. The program will provide support of as much as to 300 million litres per facility
• Expansion of the AgriMarketing Program with $75 million over five years to promote Canadian agri-food products in growth markets such as Africa, the Middle East and the Indo-Pacific
• Increased loan limits for canola producers under the Advance Payments Program (APP), with the interest-free portion doubled to $500,000 for 2025–2026

Automotive Sector

• Removal of the 2026 EV sales target under the Electric Vehicle Availability Standard
• Launching of a 60-day review of EVAS to consider future adjustments to annual sales goals, including the 2035 target

Prescribed rates for Q4 2025 to remain unchanged

The Canada Revenue Agency prescribed annual interest rates will remain largely unchanged for the fourth quarter of 2025. In the previous quarter, the prescribed rate on loans to family members reached its lowest point since Q4 2022.

The prescribed rates for the coming quarter will be the following:

• On overdue taxes, Canada Pension Plan contributions and employment insurance premiums: 7 per cent (no change from Q3 2025)
• On corporate taxpayer overpayments: 3 per cent (no change from Q3 2025)
• On non-corporate taxpayer overpayments: 5 per cent (no change from Q3 2025)
• On rates used to calculate taxable benefits for employees and shareholders from interest free and low-interest loans: 3 per cent (no change from Q3 2025)
• On corporate taxpayers’ pertinent loans or indebtedness: 6.69 per cent (an increase from 6.62 per cent in Q3 2025)

The RH Partners Tax Team

For more information on tax planning and compliance, contact a member of the RH Partners Tax team today.