(Bloomberg) -- Prime Minister Mark Carney rolled out billions of dollars in relief for Canadian businesses and workers battered by tariff wars with the country’s two largest trading partners.
Carney unveiled the aid package on Friday, hours after jobs data revealed that Canada’s unemployment rate jumped to a four-year high. The plan targets companies hit by US and Chinese levies, and its centerpieces are a C$5 billion ($3.6 billion) fund for businesses to adapt and a “Buy Canadian” federal procurement program.
Speaking in front of workers at an aerospace facility in the Toronto area, Carney described Canada as facing a “time of crisis,” during which his overriding priority is to build economic strength. The US is fundamentally reshaping all its trading relationships, he said.
“We’re moving from an age that lasted decades, an age when free trade was a motor of global economic growth to a new age — an age of economic nationalism and mercantilism,” Carney said Friday.
“What’s going on is not a transition, it’s a rupture, and its effect will be profound — workers displaced from their jobs, supply chains that have existed for decades disrupted, companies forced to change where they find their materials and their products.”
US President Donald Trump’s tariffs have badly damaged key Canadian industries such as steel, aluminum, and autos, and forced a contraction in the second quarter. At the same time, Chinese levies on Canadian canola, pork and seafood are squeezing important agricultural sectors.
Carney announced a new C$370-million incentive for producers of biofuels such as canola and pledged to amend clean fuel regulations to support the industry. He also promised to boost Business Development Bank of Canada loans for small and medium-sized businesses and expand a loan facility for tariff-hit large enterprises.
In the auto sector, the government will waive 2026 model year vehicles from Canada’s zero-emission standard and review the overall mandate, confirming a Bloomberg News report.
The relief package also includes a new reskilling program for up to 50,000 workers. Carney said he will make employment insurance more flexible and add extended benefits, and launch a new digital jobs and training platform with private-sector partners.
The country sent 75% of its exports to the US last year. While many Canadian goods can enter the US tariff-free if compliant with the North American free trade deal, Trump’s sectoral levies on metals and autos have curtailed shipments and forced job losses.
Carney recently dropped many retaliatory tariffs on US products in order to revive trade talks, but he kept 25% import taxes on US steel and autos in place — though there is an exemption for car-makers who maintain manufacturing in Canada.
His announcement appears to build on an election promise to create a C$2 billion strategic response fund to support domestic auto manufacturing. He also said Friday that imposing the electric-vehicle mandate for 2026 models would have harmed automakers’ liquidity.
The move was welcomed by Global Automakers of Canada, a trade group representing the Canadian arms of Honda Motor Co., Toyota Motor Corp. and others. Electrification “is the future of our sector, however that transition can only happen as quickly as consumers are willing to move,” President David Adams said in a statement.
Carney’s government has already unveiled some relief measures for the steel industry, including C$70 million for training and income support for as many as 10,000 workers, and C$1 billion for a fund to help firms advance new projects.
Still, for some steel producers, Trump’s 50% tariffs have been an outright disaster. Algoma Steel Group Inc., for example, reported a large second-quarter loss and is applying for federal loans. Its share price has tumbled about 50% this year.
China’s tariffs on Canadian sectors are in response to Canada’s decision to join the US in imposing levies on Chinese electric vehicles, steel and aluminum last year.
