The Government of Canada has unveiled a $6-billion package of new measures aimed at supporting Canadian businesses affected by the growing trade war with the United States (US).
Minister of Labour Steve MacKinnon, Minister of International Trade Mary Ng, and Minister of Small Business Rechie Valdez announced the relief measures one day after US President Donald Trump paused tariffs on some Canadian goods for a second time.
“We may not know what our American neighbors will do, nor what new tale they will tell, but we are ready,” MacKinnon said.
The package includes the new Trade Impact Program for Export Development Canada (EDC), which comes with an additional $5-billion facility deployed over two years to help Canadian businesses tackle challenges imposed by the tariffs and the uncertainty they create.
“We’re standing firm with Canadian businesses, because their success is Canada’s success.”
As part of this, Ng said EDC will be providing working capital solutions to help companies manage existing contracts and address potential decreases in US sales, as well as credit insurance to protect companies from losses in the event of non-payment from a foreign buyer when shipping goods or providing services internationally.
EDC will also provide a foreign exchange facility guarantee to help businesses stabilize costs and protect profit margins from adverse currency movements, as well as financing to help businesses increase capacity for trade in different markets or acquire foreign companies.
“This investment ensures our exporters can continue to drive our economy, create jobs, and compete on the world stage,” Ng said in a statement. “We’re standing firm with Canadian businesses, because their success is Canada’s success.”
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Ng also announced $1 billion in new financing through Farm Credit Canada’s Trade Disruption Customer Support Program. The program will provide the agricultural industry with access to an additional credit line of up to $500,000, new term loans, and the option to defer principal payments on current loans for up to 12 months.
Meanwhile, the Business Development Bank of Canada (BDC) will be providing $500 million in new loans to help tariff-affected businesses adapt to the new reality, strengthen operations, and diversify markets. Valdez said BDC would be granting favourable loans between $100,000 and $2 million at a preferred rate (BDC’s base rate minus two percent) with flexible repayment terms and up to 12 months of deferred principal payments. Valdez added that BDC is expanding its expert advisory services to help businesses strengthen their financial and operational strategies.
The monetary support measures come alongside the return of tweaks to the Employment Insurance (EI) Work-Sharing program, which allows businesses to reduce employee hours, allowing them to collect partial benefits, during slower periods without resorting to layoffs. While a Work-Sharing Program is usually restricted to a maximum of 38 weeks, MacKinnon announced that the government is extending the permissibility of these programs up to 76 weeks, a change the government is bringing back from the early days of the COVID-19 pandemic.
Feature image courtesy Rechie Valdez via LinkedIn.
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EDC and BDC get a big boost to support businesses affected by tariffs and market uncertainties.
The post Government of Canada commits over $6 billion to help businesses weather trade war first appeared on BetaKit.
