Ottawa introduces federal tariff relief measures, including corporate tax, HST deferral
With U.S. tariffs now in effect across multiple sectors including the auto industry, and the reality of the new geopolitical trade landscape becoming clearer—yes, U.S. President Donald Trump and his administration are serious about imposing sweeping tariffs against traditional allies and trading partners—Ottawa has begun rolling out measures designed to help businesses weather the trade war storm.
Last week the federal government announced that it will defer corporate income tax payments and HST remittances that are otherwise due from April 2nd 2025 to June 30th, 2025, waiving late-filing interest and/or penalties, as long as payments are made by the June 30th deadline. If that deadline is missed, the Canada Revenue Agency will begin applying interest effective from the beginning of that period (e.g., not July 1st). The government estimates that the measure will provide as much as $40 billion in liquidity to businesses.
The relief comes on the heels of a series of previously announced measures that were introduced when Trump fired his initial trade-war salvos. They include:
- A new Trade Impact Program managed by Export Development Canada that will make $5 billion available over two years, beginning in 2025, to improve access to new markets for Canadian products and help companies manage tariff-related challenges ranging from currency fluctuations and non-payment to cash flow slowdowns and expansion barriers
- Availability of $500 billion in favourably priced loans through the Business Development Bank of Canada to support businesses impacted by tariffs, as well as companies in their supply chains
- $1 billion in new financing through Farm Credit Canada to help mitigate financial risks related to widespread trade disruption in the Canadian agriculture and food industry sectors
- A process that allows impacted Canadian businesses to make exceptional remission requests for tariffs on certain products imported from the U.S.
The federal government has also introduced employment insurance (EI) changes to aid affected workers, including:
- A temporary waiver of the one-week EI waiting period
- A suspension of the six-month period, meaning that workers will not have to exhaust severance pay before being eligible to collect EI benefits
- Changes to the EI Work-Sharing Program to increase access to benefits and extend the maximum agreement duration. The EI Work-Sharing program supplements reduced wages with EI benefits when employers and employees agree to reduced work hours due to an unavoidable decrease in business activity beyond the employer’s control. The aim is to retain employees and avoid layoffs in the face of challenging economic circumstances. These special measures are in effect from March 7th, 2025, until March 6th, 2026
With Canada in the midst of a federal election and the U.S. ratcheting up tariff threats on a near-daily basis, it is unclear what future relief measures will be introduced to help shield businesses from the dire financial consequences stemming from shifting (and increasingly hostile) U.S. trade policies. What is virtually certain is that the federal government—no matter which party wins on April 28th—will continue to roll out policies that attempt to mitigate the bottom-line threats faced by affected SMEs.
Expect regular tax and trade policy updates from our team as they become available.
Armando Iannuzzi, Co-Managing Partner
For more information on tariff-related relief measures, contact a member of the KRP LLP team today.
