Canada adjusts employment insurance and suspends tariffs while responding to US trade tensions
In response to escalating trade tensions with the United States, the Canadian federal government has introduced a $6.5bn aid package and temporary modifications to the Employment Insurance (EI) program to support affected businesses, as reported by BNN Bloomberg.
The newly established Trade Impact Program allocates $5bn over the next two years to help businesses mitigate losses from decreased US sales and access new global markets.
Additionally, $500m will be available in business loans ranging from $200,000 to $2m at preferred interest rates, with a further $1bn designated for loans tailored to the agricultural sector.
To assist businesses in retaining employees, the government is introducing increased flexibility in the EI program.
Employment Minister Steven MacKinnon stated that this adjustment allows employees to work reduced hours, distributing work among the same number of employees while compensating for lost wages through EI.
Earlier in the day, NDP Leader Jagmeet Singh urged the federal government to expand EI eligibility to include contractors and extend the duration of benefit claims.
In response to Singh’s proposal, MacKinnon indicated that Ottawa intends to adapt its trade war response based on future US actions.
“Should this prove to be an enduring situation, you can absolutely expect that we would come with further measures to protect our workers,” MacKinnon told reporters.
The federal government has also suspended a planned second wave of retaliatory tariffs following US President Donald Trump’s executive order delaying tariffs on goods meeting Canada-United States-Mexico Agreement (CUSMA) rules-of-origin requirements.
The order, signed Thursday, also lowers levies on potash to 10 percent until April 2.
According to International Trade Minister Mary Ng, these goods represent approximately 40 percent of Canadian exports.
Meanwhile, Trump has ordered 25 percent tariffs on all steel and aluminum imports into the United States starting March 12. The White House confirmed these tariffs would be applied in addition to existing duties on Canadian goods.
CUSMA, negotiated during Trump’s first administration as a replacement for the North American Free Trade Agreement, allows tariff-free trade on goods that meet specific rules-of-origin criteria.
In a related development, Prime Minister Justin Trudeau announced that Canada would impose 25 percent tariffs on $155bn worth of American goods if the US proceeds with its tariffs on Canadian products.
These retaliatory tariffs will start with $30bn immediately and target the remaining $125bn over 21 days, according to the New York Post.
Trudeau criticized the US tariffs as “unjustified” and warned that Americans would face higher prices for everyday goods and potential job losses if the tariffs are implemented.
