How is Canada Providing Tariff Relief For Small Businesses? 

With Canadians worried about job security and unprecedented cost increases, tariff relief is a thought on many minds. With a shift in resources to bolster local and provincial markets, the federal government is stimulating support programs to help businesses and workers with tariff relief. These government initiatives are designed to provide financial assistance for businesses, encourage market diversification, and support workforce stability. 

Work Sharing Program for Employers and Employees

The Work-Sharing Program is a Canadian government initiative that helps employers and employees avoid layoffs during temporary business downturns that are beyond the employer’s control. It provides Employment Insurance (EI) income support to employees who experience a minimum of 10% reduction in their weekly earnings. 

This program requires an arrangement between employers, employees, and Service Canada with an agreement on a reduced schedule of work that is shared equally amongst the eligible workforce. 

To be eligible for the Work Sharing Program: 

• Your business has been operating in Canada for a minimum of 1 year  
• Have a minimum of 2 EI eligible employees who agree to a reduction in hours and to share any available work 

How to Apply for the Work Sharing Program:

• Visit the Government of Canada Employment and Social Development Website
• Complete 2 forms
  • Work Sharing Application Form EMP5100 
  • Work Sharing Unit Attachment Form EMP5101 

Trade Impact Program for International Businesses 

• Trade Credit Insurance: Protect your business against unpaid invoices with international customers with 90% insurance coverage of the total order value.
  
• Foreign Exchange Guarantees: Guarantees with your bank with 100% coverage on your foreign exchange contract, so you maintain a consistent exchange rate.
  
• Export Guarantee Program and Trade Expansion Lending Program: Enhance access to working capital by sharing financial institutions’ risk, facilitating business growth and expansion.​

This program is eligible for all exporters, including businesses that are not selling internationally but have a plan for expanding into international markets. The eligibility is for businesses that directly export to customers in another country or indirect exports that contribute to an international supply chain for critical components. 

What is Farm Credit and Its Impact on Canadian Farmers and Agricultural Businesses?

The Farm Credit Canada (FFC) is a government institution that supports the Canadian Agriculture industry. In response to U.S. tariffs and their impact on Canada’s overall agriculture and agri-food sector, FFC is launching the Trade Disruption Customer Support program to alleviate cash flow challenges, so farmers can maintain their operations to supply essential products.

Trade Disruption Customer Support Benefits: 

• $1 billion of accessible funding for eligible farmers, producers, and food processors
• $500,000 credit lines with new term loans
• Deferred principal payments for up to 12 months on existing loans for current FFC members

How to be eligible for Trade Disruption Customer Support Benefits: 

• Eligible for customers and non-customers who meet the lending criteria for Farm Credit Canada 
• Businesses must be financially viable before the impact of the tariff 

In addition, the federal government is offering a loan with easy access to low-cost cash advances for agricultural producers. This program, the Advance Payments initiative (APP) provides access up to $1,000,000 on the value of the eligible agricultural products you will produce or have in storage and is repaid as you sell, with up to 18 months to fully repay the advance. 

Small Business Tariff Relief Financing Program 

The Business Development Bank of Canada (BDC) introduced the program Pivot to Grow loan, a $500 million initiative to provide Canada tariff support for small and medium-sized enterprises (SMEs) directly affected by U.S trade challenges. This program offers tailored financing solutions, including loan deferrals, to businesses with viable models that have experienced financial impacts such as paused or canceled contracts and increased costs due to tariff uncertainties. 

In addition, BDC is enhancing its advisory services to help businesses develop comprehensive action plans. These services focus on financial management, operational efficiency, and market diversification strategies to mitigate the effects of Trump tariffs. By providing both capital and strategic guidance to empower Canadian entrepreneurs, they can navigate the current trade landscape effectively and secure their continued growth.

Tariff Relief Remission Process 

​In response to the U.S. imposing tariffs on Canadian goods starting March 4, 2025, the Government of Canada has established a remission process to provide relief to Canadian businesses affected by these tariffs. Remission may involve waiving or refunding the applicable tariffs under specific circumstances. 

The government will consider remission requests in the following situations:​

1. Lack of Domestic Alternatives: When the goods used as inputs cannot be sourced domestically, either nationally or regionally, or reasonably from non-U.S. suppliers.
2. Exceptional Circumstances: On a case-by-case basis, for other exceptional situations that could have severe adverse impacts on the Canadian economy.​

Only companies registered in Canada are eligible to apply. Submissions should include detailed company information, descriptions of the goods, importation data, evidence of inability to source alternatives, and any relevant contractual obligations. Confidential information must be clearly marked and will be protected, but sufficient non-confidential details are required to facilitate consultations.

How Your Accountant Helps with Tariff Relief

Canada’s small businesses, exporters, and agricultural producers are facing significant challenges due to the financial pressures and uncertainty created by U.S. tariffs. In response, the federal government has implemented a series of robust relief programs aimed at helping Canadian businesses weather these economic disruptions.

To help navigate these complex challenges, our accounting consultants help you navigate these obstacles to ensure your business gets adequate support and funding to maintain its competitive advantage during this economic uncertainty. Get in touch with them here to make sure you don’t miss out on any of this crucial financial support for your business.