Ottawa’s retaliatory tariffs may be remitted for automakers manufacturing vehicles in Canada as part of new measures to shield Canadian businesses and entities from tariff-related impacts.
Minister of Finance François-Philippe Champagne said a performance-based remission framework was designed for automakers. The move facilitates the tariff-free import into Canada of “a certain number” of US-assembled vehicles compliant with the Canada-U.S.-Mexico Agreement on trade (CUSMA), recognizing the integrated nature of the North American automotive sector.
However, automakers will only be eligible for the remission if they continue to produce vehicles in Canada and complete intended investments. The number of tariff-free vehicles a company can import drops if it restricts production or investment.
“The North American automobile sector is the most integrated industrial manufacturing sector in the world, particularly the Canadian-U.S. auto sector. And so President Trump's tariffs are an attempt in some degree to pull apart that integration and the benefits that come from that integration,” Prime Minister Mark Carney said in a statement published by The Canadian Press.
Ottawa had slapped 25 percent tariffs on US-produced vehicles being imported into Canada after US President Donald Trump imposed similar tariffs on all automobile imports into the US on April 3. However, he ordered a partial carve-out for CUSMA vehicles.
Temporary relief for US-imported goods used in food and beverage, health care
According to Champagne, the government also plans to offer a temporary six-month relief for US-imported goods used in Canadian manufacturing, processing and food and beverage packaging, as well as those used to support public health, health care, public safety, and national security objectives.
This measure caters to Canadian businesses reliant on US inputs to boost competitiveness and to hospitals, long-term care facilities and fire departments – entities critical to Canadians’ health and safety. The time-limited remission extends these entities' time to adjust supply chains and shift to available domestic supply sources.
Applications open for Large Enterprise Tariff Loan Facility
The application window has opened for the Large Enterprise Tariff Loan Facility program, which will grant liquidity access to qualified large businesses struggling to access traditional market financing. The program is intended to help employers affected by the US trade dispute sustain operations and restore financial stability.
Applicants must make efforts to sustain jobs and business activities in Canada. Companies already taking part in insolvency proceedings before the trade issues are not eligible for the program.
The government confirmed that it would present additional measures to support businesses and workers as needed in the coming weeks and months. The federal government would also collaborate with provinces and territories to offer complementary support in all jurisdictions.
“From day one, the government has reacted with strength and determination to the unjust tariffs imposed by the United States on Canadian goods. We continue to stand by Canada’s workers and businesses. Today, we’re giving Canadian companies and entities more time to adjust their supply chains and become less dependent on U.S. suppliers. This will help make our economy stronger and more resilient,” Champagne said in a statement released on Tuesday.