News and Insights

New Government Support for Businesses affected by U.S. Tariffs

March 24, 2025

Sector:

The Canadian Federal Government has announced new support measures to help businesses impacted by U.S. tariffs, including an expansion of the Employment Insurance (EI) Work-Sharing Program and a $6.5 billion aid package to ensure stability and job retention.

We have examined the new support measures announced by the Federal Government and are pleased to provide you with a summary of the information below.

For more detailed analysis of how your business could be affected – or how the support programs can help you – please reach out to us: info@krestongta.com

Summary of Key Support Programs

1. Work-Sharing Program Expansion (March 7, 2025 – March 6, 2026)
The federal government is expanding the Employment Insurance Work-Sharing Program from March 7, 2025, to March 6, 2026, to address U.S. tariff disputes.

Work-Sharing: New U.S. Tariff “Special Measures”
• Allows businesses to reduce work hours instead of layoffs, with EI benefits supplementing employee wages.
• Expanded eligibility includes businesses operating for one year and have at least two EI-eligible employees willing to reduce hours and share remaining work.
• Also expanded to non-profits, and charities.
• Now includes seasonal workers, not just year-round, permanent, full-time or part-time employees.
• Agreements can now last up to 76 weeks with no cooling-off period.
• Allows employers with less than a 10% decrease in work activity over the past six months to utilize Work-Sharing beyond 60%.
2. Financial Assistance for Impacted Businesses

Additionally a $6.5 billion aid package via three Crown corporations: Export Development Canada (EDC), Business Development Bank of Canada (BDC), and Farm Credit Canada (FCC) has been announced.
• Export Development Canada (EDC): $5 billion over two years to help exporters adjust.
• Business Development Bank of Canada (BDC): $500 million in loans and deferrals for SMEs.
• Farm Credit Canada (FCC): $1 billion in additional credit for agriculture and food businesses.

Note:
The Quebec Government has implemented various additional measures for businesses in Quebec that may be affected.

Here is a summary of these initiatives:

1. Investissement Québec’s FRONTIÈRE program
Purpose: To support Quebec manufacturing or primary sector exporters needing short-term liquidity to adapt their business models or supply chains due to significant impacts on sales from additional U.S. tariffs.
Details: The program provides loans of up to $50 million per company, with a 7-year term and 24-month principal deferment. It targets manufacturing or primary sector businesses affected by new U.S. tariffs.

2. Investissement Québec’s ESSOR program and productivity component
Purpose: To enhance the productivity of businesses, making them more visible to major buying organizations, diversifying their markets, and fueling their growth.
Details: The program offers interest-free loans and non-repayable contributions for investment projects over $10 million, aiming to lower manufacturing costs and help businesses enter new markets.
3. Investissement Québec’s Panorama financing and support program
Purpose: To provide working capital for projects aimed at expanding or diversifying sales in Canada and internationally (excluding the U.S.).
Details: The $200-million initiative aids companies in diversifying exports and enhancing competitiveness through financing and support. Term loans of $250,000 to $1,000,000 are available, with deferred principal repayment for up to 24 months and no collateral or guarantee needed. Support includes strategic guidance on diversification, market intelligence, identifying business opportunities, and connecting with potential customers.

4. Investissement Québec’s Grand V initiative
Purpose: To stimulate business investment and accelerate the shift to innovation and sustainable productivity to drive growth.
Details: This program predates U.S. tariffs on Canadian exports and offers flexible financing, including deferrals on principal repayment for up to 48 months without affecting the interest rate. Qualifying companies can receive up to 1,000 hours of tech support from Investissement Québec’s innovation experts.

5. Commission des partenaires du marché du travail’s (CPMT) call for projects entitled “Formation pour la résilience et la compétitivité en emploi” [training for employment resilience and competitiveness]
Purpose: To help businesses affected by additional U.S. tariffs develop their employees’ skills.
Details: This program helps employees build skills to meet economic challenges, allowing businesses to retain their workforce and handle tariff impacts. The CPMT invites organizations like employers’ associations, joint committees, certified training buyers, franchisors, recognized training mutuals, and Indigenous employment readiness groups to assist affected companies.

6. Caisse de dépôt et placement du Québec’s Program for Québec businesses
Purpose: To help businesses launch new projects to boost productivity or strategically enter new markets.
Details: The program offers flexible financing to boost productivity, support technological advancements (automation, robotics, digitization, AI), and enhance CDPQ team support. It targets businesses seeking new markets to diversify their customer base, suppliers, or operations. CDPQ will fund top tech transformation projects after an upcoming call for proposals.