Prime Minister Carney Unveils “Buy Canadian” Policy and Billions in Funding to Combat U.S. Tariffs

In a landmark speech in Mississauga, Ontario, on September 5, 2025, Prime Minister Mark Carney unveiled a comprehensive economic strategy designed to fortify Canada against the ongoing trade war and disruptive tariffs imposed by U.S. President Donald Trump. Carney described the plan as more than a short-term response; it is a long-term economic transformation aimed at shifting Canada from reliance on a single trading partner to a state of greater economic resilience.

The strategy is built on three main pillars: providing immediate support for workers and businesses, implementing a new mandatory “Buy Canadian” procurement policy, and offering targeted relief to sectors hardest hit by the trade tensions. This multi-pronged approach signals a new era in Canadian economic policy, one where the federal government will use its full purchasing power and financial resources to support domestic industries and secure the country’s economic future.

Strategic Response to the Trade War: Key Pillars of the Plan

The Prime Minister’s announcement included several key initiatives that will be implemented immediately to address the economic fallout from the U.S. tariffs.

Billions in Federal Funding: New, flexible funding will be made available to businesses and workers to help them navigate the economic disruption.

A “Buy Canadian” Mandate: The government is abandoning its previous approach and will now require federal departments and agencies to prioritize Canadian-made goods and services.

Support for Workers and Businesses: The plan includes a comprehensive package of extended benefits, reskilling programs, and new financing options.

A Temporary Pause on the EV Mandate: In a surprise move, the government will pause its zero-emission vehicle (ZEV) sales mandate to provide relief to the auto sector.

Putting Workers First: Comprehensive Support for Job Security

Carney emphasized that the well-being of Canadian workers is at the core of the government’s response. The plan includes a series of measures designed to protect jobs, provide new skills, and offer a robust safety net.

Reskilling and Training Package: Up to 50,000 workers will have access to training programs, funded by the federal government and delivered through employers or recruiters. This initiative aims to help workers in struggling sectors transition to new, in-demand roles.

Enhanced Employment Insurance (EI): In a significant expansion of the social safety net, long-tenured workers who have been particularly affected by the trade tensions will now be eligible for up to 65 weeks of EI, a 20-week extension.

Waiver of the EI Waiting Period: The one-week waiting period for EI benefits will be waived, providing immediate financial relief to an estimated 700,000 workers who have lost their jobs due to the economic downturn.

Job-Matching Platform: A new digital tool will be launched to connect displaced workers with open positions, training opportunities, and career counseling services, streamlining the process of finding new employment.

These measures reflect a commitment to a worker-centric recovery, ensuring that the human cost of the trade war is mitigated through direct and effective support.

The New “Buy Canadian” Policy: A Fundamental Procurement Shift

One of the most impactful and politically significant elements of the plan is the introduction of a new, mandatory Buy Canadian policy. This marks a departure from previous free-trade-focused procurement practices.

As Prime Minister Carney explained, the policy will move beyond “vague commitments to clear obligations.” This means:

Mandatory Prioritization: All federal departments, agencies, and Crown corporations will now be required to prioritize Canadian-made goods and services in their purchasing decisions.

Extending the Policy: This new requirement will also be extended to all federal funding streams, including grants, contributions, and loans, ensuring that taxpayer dollars are used to support Canadian businesses and strengthen domestic supply chains.

Leveraging Federal Spending: The government’s immense purchasing power will be used as a strategic tool to drive demand for Canadian products and services, creating a reliable anchor customer for local firms.

This policy shift is expected to have a cascading effect, encouraging provinces and municipalities to adopt similar standards and further bolstering Canada’s domestic economy.

Financial Support for Businesses: Providing Liquidity and Investment

Recognizing that businesses need immediate access to capital to withstand trade disruptions, the government announced several financial support measures.

$5-Billion Strategic Response Fund: A new, flexible fund will be established to help businesses across all sectors. This fund will be used to help companies retool their operations, develop new products, and diversify into new markets to reduce their reliance on the U.S.

Expansion of Existing Programs: The Regional Tariff Response Initiative, which provides support to small and medium-sized enterprises (SMEs), will be more than doubled from $450 million to $1 billion.

Increased Loan Limits: The Business Development Bank of Canada (BDC) will increase its maximum loan size for SMEs from $2 million to $5 million, providing a crucial liquidity lifeline.

Lower-Interest Loans: A new Large Enterprise Tariff Loan Facility will offer longer-term loans at lower interest rates to help larger businesses manage the financial strain of the tariffs.

Targeted Sectoral Relief: Supporting Key Industries

The plan also includes specific measures for the industries most affected by tariffs and other trade barriers.

Agriculture and Biofuels: In response to tariffs on Canadian canola, beef, and seafood, the government will introduce a $370 million biofuel production incentive. This initiative, coupled with an adjustment to clean fuel regulations, is designed to boost domestic demand for agricultural products and strengthen Canada’s biofuel industry.

Auto Sector: In a move that surprised many, the government announced a temporary pause on Canada’s zero-emission vehicle (ZEV) sales mandate for the 2026 model year. This decision provides auto manufacturers with greater flexibility as they navigate supply chain disruptions and trade uncertainty, while the government conducts a 60-day review of the policy.

The Political Response: A New Economic Reality

Prime Minister Carney’s announcement has been met with a mix of praise and criticism. While many industry leaders have welcomed the support, Opposition Leader Pierre Poilievre has dismissed the plan as “political theatre.” Poilievre argued that Carney has failed to make meaningful progress in trade negotiations and that the government’s reactive approach has left Canada in a weaker position.

Despite the political debate, the new economic strategy signals a clear departure from the past. By combining immediate, practical support for workers and businesses with a bold industrial policy, the Carney government is attempting to fundamentally transform Canada’s economic model. The focus is no longer on simply navigating a trade dispute, but on building a more resilient, self-reliant, and diversified economy for the long term.