Canada Launches Bold Economic Relief Amid Tariff War

Vancouver, BC - April 7th, 2025 - As of April 7, 2025, Canada, under the leadership of newly elected Prime Minister Mark Carney, is navigating the fallout of an escalating trade war with the United States, driven by aggressive tariff actions from U.S. President Donald Trump. Carney, who won a decisive mandate on March 9 and was sworn in days later, has quickly moved to soften the economic blow of these tariffs, which are particularly damaging to Canada’s export-reliant economy.

On March 6, the federal government launched a $6.5 billion Trade Impact Program. The initiative includes $5 billion over two years to help exporters diversify away from the U.S. market, $500 million in low-interest loans through the Business Development Bank of Canada (BDC), and $1 billion in agricultural sector support via Farm Credit Canada (FCC).

Employment Minister Steven MacKinnon announced parallel measures for workers, including a temporary waiver of the one-week Employment Insurance (EI) waiting period and suspended severance payout restrictions. Expanded access to EI’s work-sharing program will allow companies to reduce hours while EI fills the gap, helping businesses avoid layoffs.

On March 12, Trump imposed a 25% tariff on Canadian steel and aluminum and a reduced 10% duty on potash—though some tariffs were deferred under an executive order issued March 5. In response, Canada suspended a second wave of retaliatory tariffs valued at $125 billion, allowing time for negotiations. Minister Mary Ng noted that 40% of Canadian exports qualify for a temporary reprieve under CUSMA provisions.

Ontario Premier Doug Ford also stepped in with an $11 billion provincial relief plan. Ontario will defer select taxes—including the Employer Health Tax and Insurance Premium Tax—through October 1, offering businesses an estimated $9 billion in cash flow relief. “In the face of President Trump’s attacks on Ontario’s economy, our government will do whatever it takes to protect Ontario workers and businesses,” Ford said.

Carney, a seasoned economist and former central banker, has framed the relief package as a stabilizing force during turbulent trade realignments, promising adaptability as tensions with the U.S. evolve.

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