As Canadian businesses continue to suffer impacts from the trade war with the United States, the Government of Canada announced three new measures to help Canadian employers weather this storm. In particular, the government announced the following on April 15, 2025:
- a performance-based remission framework under which Canadian eligible automakers will not be subject to Canadian counter tariffs when importing a certain number of US-assembled vehicles;
- a six-month relief period for businesses importing various types of goods from the United States for specified purposes, during which they will not be subject to Canadian counter tariffs ; and
- new government-backed loans will be offered to large Canadian employers.
Although not all Canadian employers will benefit from these temporary relief measures, many will benefit from at least one of them. Information regarding whether your business is eligible is set out below.
Performance-Based Remission Framework for Canadian Automakers
In recognition of the integrated nature of the North American auto sector, Canadian automakers which continue to manufacture vehicles in Canada will be permitted to import a certain number of US-assembled vehicles into Canada without paying the counter tariffs that Canada has imposed in response to the US-imposed tariffs.
However, there are some conditions that apply, including:
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The US assembled vehicles must be compliant with the Canada-United States-Mexico Agreement (“CUSMA”);
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The automaker must continue to produce vehicles in Canada and complete planned investments in Canadian operations; and
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The number of tariff-free vehicles that a company will be permitted to import will be reduced if there are reductions in their Canadian production or investment.
While only Canadian automakers will directly benefit from this temporary relief measure, many other Canadian employers which provide goods and services to such automakers will indirectly benefit from their continued production of vehicles in Canada.
Six-Month Tariff Relief Period for Certain Goods Imported From US
Of relevance to significantly more employers is that the government will provide a six-month relief period for a variety of goods imported from the US. This applies to goods that are imported from the US to Canada in order to be used for Canadian manufacturing, processing, and food and beverage packaging, as well as public health, health care, public safety, and national security objectives.
Thus, this temporary measure will provide significant relief to Canadian employers in the manufacturing, processing, food/beverage packaging, public health, and public safety sectors, so that they have time to adjust their supply chains to domestic sources without the financial burden of the counter tariffs.
New Government-Backed Loans for Large Canadian Employers
Finally, new government-backed loans will be made available to eligible large Canadian employers who have been impacted by the tariffs through the new Large Enterprise Tarriff Loan (LETL) facility. The LETL is being managed by a crown corporation called the Canadian Development Investment Corporation, through its subsidiary, the Canadian Enterprise Emergency Funding Corporation. The LETL will provide eligible employers with interest-bearing term loans to assist them with liquidity.
To be eligible for LETL funding, an employer must:
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Have an “impact on the Canadian economy” as a result of it having significant operations in Canada or a significant Canadian workforce;
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Have approximately $300 million or more in annual Canadian revenue;
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Require a loan of at least $60 million;
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Commit to minimizing loss of employment in Canada and sustaining their domestic activities;
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Demonstrate that the LETL funding will form part of their overall transition plan to return to financial stability;
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Not have been found guilty of tax evasion in the past;
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Demonstrate that they have sought to secure funding through traditional sources of market financing; and
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Not have a going concern note, qualification, or note of emphasis on their most recent annual or interim financial statements (other than in direct relation to the tariffs).
Applications for LETL funding are now open. Interested applicants should register their interest at [email protected] by submitting a completed enquiry form in order to receive an application form and instructions.
The Bottom Line
As the trade war with the United States continues with no end in sight, the government may ultimately implement further relief measures beyond those discussed above, like it did during the COVID-19 pandemic. That said, it remains to be seen whether the government will implement more impactful measures, such as emergency wage and/or rent subsidies similar to those provided during the pandemic.
If you require any advice on how to reduce your workforce costs in the face of the financial challenges stemming from the tariffs while avoiding liability, please do not hesitate to contact us for expert legal advice and guidance.
