‘Economic chemotherapy’: Business groups wary of counter-tariffs, federal aid package

Business organizations have expressed skepticism about Canada's new counter-tariff and federal aid package aimed at assisting companies impacted by the trade dispute with the United States. Ottawa announced a $7.5-billion aid package on Tuesday, comprising loan programs and enhanced employment insurance eligibility. Simultaneously, the federal government raised tariffs on American steel and aluminum by 25 to 50 percent, imposed 50 percent tariffs on clothing and apparel, and set a 25 percent tariff on appliances, dairy products, seafood, and certain steel and aluminum derivatives.

However, the counter-tariffs have been widely criticized as akin to "economic chemotherapy" by Dan Kelly, president of the Canadian Federation of Independent Business. He argues that while these levies achieve a geopolitical objective, they could prove detrimental to small businesses grappling with the adverse effects of the trade war. Kelly suggests that many small enterprises may not meet the stringent criteria for loan qualification, such as employee headcounts and revenue thresholds.

Candace Laing, president and CEO of the Canadian Chamber of Commerce, acknowledges the potential benefits of the loan programs but warns that they could also become a "monkey on the back" once they become due for repayment.