Retaliatory tariffs announced along with $7.5 billion in business support

“Dollar-for-dollar” retaliatory tariffs were announced last week following the latest wave of US tariffs on $27.6 billion of Canadian imports.

Set to take effect on September 8, 2026, Canada will impose 15% to 50% tariffs on $27.6 billion in imports from the U.S. This measure will affect industries such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.

In an effort to keep Canadian businesses competitive, the government is also introducing a $7.5 billion support package that focuses on small and medium-sized businesses in sectors affected by the new tariffs. This measure builds on top of the existing $25 billion tariff support implemented by the government in the past 18 months.

In a week, we will be seeing changes updates to the following:

Regional Tariff Response Initiative (RTRI)

The RTRI is delivered by Canada’s regional development agencies (FedDev, ACOA, Pacifican, CED Quebec, PrairiesCan, FedNor, and CanNor) and was created to protect Canadian businesses and workers from the impact of tariffs. With the upcoming changes, we will be seeing:

• An increase on the cap on non-repayable contributions from $1 million to $3 million, which will now cover support for demonstrated liquidity needs in addition to existing support for pivot or capital investment plans; and
• Liquidity support of up to $2 million.

Business Development Bank of Canada (BDC)

An additional $500 million liquidity stream is introduced through BDC’s Pivot to Grow program, which offers financing for trade support. This program will be available to companies directly impacted by tariffs regardless of sector. Loans ranging from $250,000 to $5 million will be made available with interest-only payments over 36 months.

Canada Strong Diversification Fund (NEW)

A new stream of the Strategic Response Fund (SRF), the Canada Strong Diversification fund comes with additional $2 billion in funding to allow for flexibility to support tariff-impacted businesses with shovel-ready projects that support ongoing capital maintenance.

Rapid Response Supports for Workers and Employers (NEW)

$3.5 billion in support is earmarked to help workers and employers affected by tariffs. For employers, a new Workforce Retention and Retraining Program will be established, combining the existing EI Work-Sharing program and Worker Retention Grant into a single, streamlined program designed to be more accessible and generous.

Large Enterprise Tariff Loan (LETL) facility

A more flexible LETL program is expected to provide the flexible liquidity needed to bridge large employers by increasing the size of liquidity supports from 24 to 36 months of company liquidity needs and increasing the maximum loan term from 10 years to 15 years.

Protect Ontario Financing Program

On August 24, 2026, Ontario announced that the province will broaden eligibility for the Protect Ontario Financing Program (POFP) to protect impacted Ontario workers and businesses. Now, to be eligible for funding, organizations must meet all the following criteria:

• Operate within Ontario;
• Operate within the sectors affected by tariffs (i.e., steel, aluminum, copper, autos, mechanical equipment, electrical machinery, plastic products, beverages, paper products, other goods, furniture);
• Have at least $2 million in annual revenue;
• Employ at least 10 full-time employees in Ontario;
• Have a minimum 3 years of operations & financial statements;
• Facing material working capital challenges due to the tariffs; and
• Have explored and exhausted or faced significant barriers in accessing federally offered financial support options to access working capital.

What this means for Canadian businesses

With counter-tariffs taking effect on September 8, the above program changes will also be rolling out on the same week. This leaves businesses in affected sectors with a narrower window to get applications moving before cash-flow pressure starts compounding. 

For many businesses, the primary challenge will not be long-term profitability alone. It will be cash flow. The best way to address this is acting smart and acting early. Reach out to your advisor now rather than waiting to see how the tariffs bite.

FAQ: Canada’s Tariff Response Measures

When do the new counter-tariffs take effect?

September 8, 2026. Tariffs ranging from 15% to 50% will apply to roughly $27.6 billion in U.S. imports across sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.

Which products face 50% counter-tariffs?

According to the federal announcement, goods subject to the new 50% counter-tariffs include:

• Steel and aluminum products that had previously been subject to a 25% counter-tariff
• Furniture
• Clothing and apparel

Which products face 25% counter-tariffs?

The federal announcement identifies the following examples of goods subject to 25% counter-tariffs:

• Appliances
• Dairy products, including cheese
• Certain derivative steel and aluminum products

Do existing Canadian counter-tariffs remain in place?

Yes. The federal government confirms that existing counter-tariffs, including those affecting automobiles, will remain in place. Canada’s tariff remission framework also remains available for requests for exceptional relief.

What is the $7.5 billion support package?

The federal government announced $7.5 billion in new and enhanced supports for Canadian workers and businesses affected by U.S. tariffs. This is in addition to nearly $25 billion in tariff-related supports implemented over the previous 18 months.

The package includes enhanced support through regional development agencies, BDC liquidity financing, the new Canada Strong Diversification Fund, worker and employer supports, and changes to the Large Enterprise Tariff Loan facility.