Federal Government Announces $7.5 Billion Support Package for Businesses and Workers Affected by U.S. Tariffs

The Government of Canada has announced a $7.5 billion package of new and enhanced support measures to help Canadian businesses and workers respond to the economic impacts of recently announced U.S. tariffs. The measures build on approximately $25 billion of support introduced over the past 18 months and focus on liquidity, investment funding, workforce support, and business adaptation assistance, particularly for small and medium-sized enterprises. Since the initial announcement, additional program pages and application guidance have been released by regional development agencies, BDC, the Strategic Response Fund, and Employment and Social Development Canada.

The package introduces:

- Expanded regional business funding programs.
- Additional low-cost financing through the Business Development Bank of Canada (BDC).
- A new Canada Strong Diversification Fund for capital investment and growth projects.
- Enhanced Employment Insurance (EI) measures.
- New workforce retention and retraining supports.
- Expanded loan support for large employers.

The federal government’s latest support package represents one of the most significant tariff-response initiatives announced to date. The combination of grants, financing programs, workforce supports, and investment incentives may provide meaningful opportunities for Canadian businesses facing trade uncertainty and seeking to strengthen long-term competitiveness.

Program Overview

Expanded Regional Tariff Response Initiative (RTRI)

Additional Funding: $1.5 Billion

Effective September 2026, the federal government expanded the Regional Tariff Response Initiative delivered through Canada’s Regional Development Agencies. The national RTRI page confirms that application intake dates may vary by region and that businesses should apply through the applicable regional development agency website.

Key enhancements and current regional guidance include:

Liquidity assistance of up to $2 million, generally intended to help tariff-impacted businesses maintain Canadian operations and retain employees.
Liquidity assistance may be non-repayable and may cover up to 50% of eligible costs, subject to regional program rules.
Pivot project funding for investments that improve productivity, competitiveness and resilience, including non-repayable funding for smaller regional projects and repayable support for larger transformative projects.
A business may be able to apply for liquidity assistance, pivot project funding, or both, subject to applicable regional rules.
For Ontario businesses, FedDev Ontario administers the program in Southern Ontario and FedNor administers the program in Northern Ontario.

The program is intended to help businesses:

Respond to tariff pressures.
Improve productivity.
Diversify customer and export markets.
Strengthen supply chains.
Invest in long-term competitiveness.

Businesses That May Benefit

The program may be particularly relevant for businesses that:

Export products or services to the United States.
Have experienced declining demand or profitability due to tariffs.
Require additional liquidity.
Are undertaking expansion, automation, or diversification initiatives.

Businesses should confirm the applicable intake process and eligibility criteria on their regional development agency’s website before applying. Applications should be made through the applicable Regional Tariff Response Initiative regional development agency website. Intake dates, eligibility requirements, forms, supporting documents and funding terms may vary by region.

Applications should be made through the applicable Regional Tariff Response Initiative regional development agency website. Intake dates, eligibility requirements, forms, supporting documents and funding terms may vary by region.

For Ontario businesses:

FedDev Ontario Regional Tariff Response Initiative (Southern Ontario)
FedNor Regional Tariff Response Initiative initial application (Northern Ontario)

Expanded BDC Pivot to Grow Financing

Additional Funding: $500 Million

The federal government is introducing a new liquidity stream through BDC’s Pivot to Grow program to support businesses experiencing tariff-related cash-flow shortages.

Program highlights include:

Loans ranging from $250,000 to $5 million.
Interest-only payment options for up to 36 months for liquidity support.
BDC has indicated that the new liquidity stream may include 0% interest for the first 12 months, subject to program terms.
Eligibility is generally targeted to businesses directly impacted by tariffs, with access expanded to businesses generating at least $1 million in annual revenue.
BDC guidance indicates applicants should generally have at least 15% of sales derived from exports to the United States, at least three years in business, historically positive cash flow, and, where applicable, a resilience plan.
The application process begins through BDC’s Pivot to Grow program page and typically involves providing information about the business, the impact of U.S. tariffs, the financing need and the intended use of funds, followed by discussion with a BDC representative.

For businesses facing short-term liquidity constraints, this program may provide access to working capital while longer-term operational adjustments are implemented.

Applications can be initiated through BDC’s Pivot to Grow program page. Businesses should be prepared to provide information regarding:

Business operations and history.
Annual revenue and export exposure to the United States.
Operational and financial impacts of U.S. tariffs.
Cash-flow requirements and proposed use of funds.
Financial performance, including historical cash flow.
Any resilience or business adaptation plan requested by BDC.

Canada Strong Diversification Fund

Additional Funding: $2 Billion

The government has also created the Canada Strong Diversification Fund, a new stream within the Strategic Response Fund. The initiative became effective immediately upon announcement.

The fund is designed to support tariff-affected businesses pursuing projects that improve long-term resilience and competitiveness.

Eligible initiatives may include:

Capital investments.
Manufacturing modernization.
Equipment replacement.
Productivity improvements.
Supply chain strengthening.
Expansion into new markets.
Ongoing capital maintenance projects.

The Canada Strong Diversification Fund is listed as a tariff-relief priority under the Strategic Response Fund. Businesses should review the Strategic Response Fund project requirements, complete the online eligibility process and, where appropriate, request a consultation. Following consultation, Strategic Response Fund officials may invite the business to submit a Statement of Interest and, if the project proceeds, a full application. The initiative is also expected to work closely with Regional Development Agency programming for project intake and triage.

Current federal guidance indicates that support under this fund is prioritized for industries significantly affected by U.S. tariffs, including aluminum, automotive, cement, chemicals, food and beverage, forest products, manufacturing, steel and textiles. Priorities in other sectors may be assessed as the global trade environment evolves.

Businesses considering the Canada Strong Diversification Fund should begin by reviewing the Strategic Response Fund project requirements and completing the online eligibility process. If the project appears eligible, businesses may be asked to participate in a consultation with Strategic Response Fund officials. Following consultation, the business may be invited to submit a Statement of Interest and, if the project advances, a full application.

Support for Workers and Employers

Enhanced Employment Insurance Measures

The federal government has announced several temporary EI enhancements to support individuals affected by tariff-related economic disruption. These measures include:

Extension of the temporary waiver of the one-week EI waiting period for an additional year.
Extension of temporary rules allowing workers to receive EI benefits without first exhausting severance or vacation pay.
Extension of the temporary provision providing an additional 20 weeks of EI benefits for long-tenured workers.
A new temporary measure allowing certain workers who voluntarily left previous employment to access EI, provided their most recent job loss occurred through no fault of their own.

The government is also increasing support through Job Bank to help workers identify employment opportunities and transition into new roles.

Workforce Retention and Retraining Program

The new Workforce Retention and Retraining Program is intended to combine the Employment Insurance Work-Sharing Program and the Worker Retention Grant into a single streamlined program to help employers retain and retrain workers during periods of economic adjustment. Until the new program comes into effect and detailed application guidance is released, current Work-Sharing agreements remain in effect and employers may continue to access existing Work-Sharing and Worker Retention Grant supports, subject to program requirements.

Key features include:

Expanded Work-Sharing flexibility for employers facing economic challenges, including tariff-related challenges.
Support for employees who temporarily work reduced hours while training activities take place during non-working hours.
Potential funding of up to $1,000 per participating employee to support training and administrative costs, subject to program requirements.
Under current guidance, participating EI-eligible workers may be able to receive support equal to 70% of lost earnings for time not worked, compared to 55% of insurable earnings under standard EI rules.

This program may be particularly valuable for businesses seeking to retain skilled employees during temporary periods of reduced demand. Until the Workforce Retention and Retraining Program application process is released, employers should use the Work-Sharing Program application page for current Work-Sharing application procedures and related special measures.

Support for Large Employers

The government has also introduced additional flexibility under the Large Enterprise Tariff Loan (LETL) facility administered by the Canada Enterprise Emergency Funding Corporation.

Enhancements include:

Increasing liquidity support from 24 months to 36 months of liquidity needs.
Extending maximum loan terms from 10 years to 15 years.

Large employers should review the LETL overview and enquiry process and, if they appear to meet the eligibility criteria, submit the required enquiry form to CEEFC.

What Should Your Business Do Now?

Businesses that may be affected should act promptly by identifying which programs may apply, confirming current eligibility and application requirements through the applicable federal program or regional development agency, and beginning to assemble supporting information so they are ready to apply as program details continue to be released.

If you have any questions or need clarification along the way, please contact us.
We’re happy to help.

905 738.5758 | info@fazzaripartners.com

This article is intended for general information purposes only and does not constitute accounting, tax, legal, financing, or business advice. Eligibility requirements and program details may change as additional guidance is released by the Government of Canada and participating agencies.