The federal government is providing tariff relief to Canadian automakers in an effort to keep their manufacturing plants open as trade tensions with the U.S. continue to escalate.

Finance Minister François-Philippe Champagne announced a new performance-based framework that will allow automakers to import a limited number of U.S.-assembled, CUSMA-compliant vehicles into Canada without facing retaliatory tariffs. (The CUSMA is the free-trade agreement between Canada, the U.S. and Mexico that American President Donald Trump spearheaded during his first term in office.

The relief is conditional on automakers maintaining vehicle production and completing planned investments in Canada. If production or investment declines, the number of permitted tariff-free vehicle imports into Canada will be reduced.

The move is part of Canada’s response to a 25% U.S. tariff on Canadian automobiles. Canada has imposed its own countermeasures but is now offering targeted relief to protect domestic jobs and industry stability.

“From day one, the government has reacted with strength and determination to the unjust tariffs imposed by the United States on Canadian goods,” said Champagne in a news release. “We continue to stand by Canada’s workers and businesses.”

The relief will give Canadian companies and entities more time to adjust their supply chains and become less dependent on U.S. suppliers, he added.

“This will help make our economy stronger and more resilient,” he said.

The government is also introducing a temporary six-month exemptions from tariffs on U.S. goods used in Canadian manufacturing, processing, and food and beverage packaging, as well as goods that support public health, safety, and national security. This measure is intended to help businesses and essential services—such as hospitals and emergency services—adjust their supply chains and prioritize domestic sourcing where possible.

Additionally, the Large Enterprise Tariff Loan Facility (LETL), announced earlier this year, is now accepting applications. The program will provide liquidity to large businesses critical to Canada’s food, energy, and economic security that are unable to access traditional market financing. Eligible companies must have been financially viable before the trade measures and are expected to sustain Canadian jobs and operations.

The federal government said more support measures could be introduced in the months ahead and pledged continued co-ordination with provinces and territories to ensure comprehensive assistance across the country. That promise is conditional upon the Liberal government returning to power after the April 28 federal election.

Photo: Invest Ontario

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