Tariff relief package? These 3 things should be in any plan, experts say – National

U.S. President Donald Trump’s proposed tariffs on Canada could come within days and Ottawa is gearing up to meet the threat.

With fears of an economic crisis if Trump’s measures hit this weekend, some are calling for a relief package for workers and businesses along the lines of Canada’s COVID-19 supports.

Canada’s pandemic response plan included tens of billions of dollars in support of struggling businesses and workers who lost their jobs, through both direct cheques and benefits as well as industrial loans and tax deferrals.

But authorizing new spending would require the approval of Parliament to push through such a package — and it is prorogued until March 24.

What options does the federal government have?

Trump’s threat of tariffs has raised fears of mass layoffs across sectors in Canada.

Unifor, Canada’s largest private sector union, has said the “mere threat of tariffs is damaging to jobs, investment and our economy.”

Moshe Lander, an economist at Concordia University, said some measures that could help workers hurt in economic fallout from any tariffs already exist. The federal government could just make access to those measures a little easier for Canadians who lose their jobs as a result of the tariffs.

“They just need to tweak those policies that already exist and say, if you lose your job because of the tariffs, then we will provide support to you, whether it’s through any welfare or other government support programs,” he said.

One of the conditions of Canada’s employment insurance program is for the applicant to have been without work and without pay for at least seven consecutive days in the last 52 weeks.

If the impact of the tariffs is immediate, Canadians could see Ottawa considering waiving some requirements, Lander suggested.

In a letter to Prime Minister Justin Trudeau, Unifor called on Ottawa to pre-empt the tariffs and introduce income support.

“Canada must prepare for a potential rise in unemployment and provide additional income supports to workers in trade-exposed industries and communities, like measures implemented during the COVID-19 pandemic,” Unifor said in its letter to Trudeau.

Drew Fagan, professor at the Munk School of Global Affairs at the University of Toronto, said such measures would be quite likely if there are broad economic impacts.

“I think the first step would be support for workers who’ve been laid off in the course of the impact of the tariffs, and that will be very sector-specific,” he said.

Read more here on which sectors could be hit hardest.

Lander said while it’s likely that Ottawa could provide some income support, it’s unclear whether potential spending would be on the same level as it was during the pandemic.

“The key in COVID was that it was life or death, and we were placing restrictions on what people could and couldn’t do with their life. You had to be generous with no questions asked because you couldn’t afford people to say, ‘I’m going to take matters into my own hand and I’m going to go to work and possibly infect the entire workplace,’” he said.

Fagan said another restriction this time around is that Trudeau is heading a minority government with Parliament prorogued.

“They could do something more substantial with parliamentary approval if the other parties were willing to approve it,” he said.

NDP Leader Jagmeet Singh on Tuesday suggested he could work with the Liberal government and other opposition parties to discuss plans to support workers impacted by the tariffs.

“If the Liberals are serious about providing more support to workers — and I think they should — then bring the opposition leaders together, present a plan. They have not done that,” Singh said.

According to a report from The Canadian Press, the federal government is also looking at a relief package to help businesses and industries affected by Trump’s tariffs. Multiple premiers have said provinces are considering relief plans much like those introduced during the pandemic.

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B.C. Premier David Eby said the impact of the tariffs could be as bad as the 2008 financial crisis.

Eby said relief measures could include pandemic-style employment insurance for people who may be laid off as their employers feel the pinch, as well as grants and loans for businesses.

“These are the kinds of responses that we expect to see through this period,” he said.

As Canadians felt the economic strain of the pandemic, Ottawa rolled out the Canada Emergency Response Benefit (CERB), a measure introduced for Canadian businesses and self-employed workers affected by COVID-19.

Eligible individuals and businesses received $2,000 every four weeks, which came to $500 a week.

“The public service was kind of turned inside out to get this done quickly. And it was done fairly well. But it was a very broad stroke and $82 billion is not chump change,” Fagan said, adding that relief for businesses could be more targeted this time around, being limited to sectors with vast exposure to the U.S. market.

“You could see support for companies as necessary in sectors that have been hit with tariffs.”

Lander said the list of industries that may need government support could be very wide.

“Oil and gas, mining, lumber, fisheries, water – they’re all going to be affected. They’re all going to need support.”

He added that Ottawa could be a bit more discretionary on who to support than it was with the COVID-19 support programs, like the Canada Emergency Business Account (CEBA).

CEBA gave eligible small businesses and not-for-profits “up to $60,000 in emergency funding, in the form of loans that were initially interest-free and partially forgivable, to help cover a variety of expenses that could not be deferred during a period of shutdown, such as payroll, rent, insurance and utilities.”

But in the 2023-24 financial year, Canada ran a budget deficit of nearly $62 billion, and both CEBA and CERB have come under scrutiny in the years since over what critics have called inadequate screening processes for applicants.

“If they’re otherwise viable businesses, then there’s nothing wrong with offering them support to get through the tough times. The tariffs would eventually go away, we hope. If there are industries that are in terminal decline anyway and this is just accelerating it, then support shouldn’t be offered,” Lander said.

Lander said Ottawa’s pandemic response included some measures that propped up non-competitive businesses.

“Trying to prop up retail or trying to prop up movie theatres was one of them. Those were foolish dollars because they were already in decline. COVID just laid bare that they don’t really have a long-term business model,” he said.

–with files from The Canadian Press