How Tariff-Affected Companies Can Access Federal Loans, Grants, and Work‑Sharing

Tariffs can hit Canadian businesses quickly and unexpectedly. Higher input costs, delayed contracts, and lost export sales often create sudden cash-flow problems—even for healthy companies. If your business is affected by actual or threatened tariffs, the federal government offers loans, grants, and employment supports to help stabilize operations and protect jobs.

This guide explains the main federal options available to Canadian companies affected by tariffs, highlighting real programs such as the Business Credit Availability Program (BCAP), the Work-Sharing Program, and regional grants and loans.

Federal Support Options for Tariff‑Affected Companies

Canadian businesses impacted by tariffs usually fall into two groups: large enterprises facing liquidity shortages and employers wanting to avoid layoffs during a temporary downturn. The following programs address both needs.

Business Credit Availability Program (BCAP)

The Business Credit Availability Program (BCAP) helps Canadian businesses access credit during financial stress, including situations caused by tariffs or trade actions.

What BCAP provides

Loans and credit through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC)
Loan amounts and terms depend on your business’s needs and the lender’s assessment
Designed to help companies cover operating costs and manage disruptions

Who is eligible To qualify, your business must:

Be based in Canada and affected by COVID-19, trade actions, or market disruptions, including tariffs
Need extra working capital to maintain operations
Show a viable business model and a plan to return to financial stability

What BCAP is not

BCAP does not provide grants; all funding is repayable
It is not for businesses that are insolvent or have filed for creditor protection
It does not replace regular commercial credit if available

Eligibility and documentation requirements can be complex. You can use tools like GrantHub’s eligibility matcher to check if BCAP or other loan programs fit your business before starting an application.

Regional and Sectoral Grants and Loans

Many tariff support programs are delivered through regional economic development agencies or sector groups funded by the federal government. These programs are specifically designed for Canadian companies facing trade disruptions.

For example, the FedDev Ontario Regional Relief and Recovery Fund (RRRF), delivered by the Federal Economic Development Agency for Southern Ontario, supported businesses facing COVID-19 disruptions and, in some cases, trade impacts such as tariffs. While RRRF was primarily aimed at COVID-related needs, it also helped companies adapt to broader market disruptions, including those caused by tariffs.

Key details

Funding range: $40,000 to $500,000 (loans or grants, depending on the stream)
Covers a portion of eligible project costs
Focuses on projects that help businesses adapt operations, maintain jobs, or diversify markets
Applicants may include incorporated businesses, not-for-profits, and sector organizations

These programs matter to Canadian businesses because they often fund:

Shared equipment or productivity projects
Market diversification initiatives
Sector-wide supports for companies affected by tariffs

If you operate outside Ontario, similar regional programs exist in Western Canada, Quebec, Atlantic Canada, and the North. Each program is tailored to local economic needs and is available only to Canadian companies.

Work‑Sharing Program (Special Tariff Measures)

Employers facing a temporary drop in business due to tariffs can use the federal Work-Sharing Program to avoid layoffs.

How Work-Sharing works

Employees agree to a temporary reduction in hours
Lost wages are partially replaced through Employment Insurance (EI) benefits
Employers keep skilled workers attached to the business

Tariff-related special measures

Special measures have applied during periods of trade disputes, such as steel and aluminum tariffs
Designed for Canadian businesses facing actual or threatened tariffs
Greater flexibility in agreement duration and extensions may be available during special periods

Basic eligibility

Operating in Canada for at least one year
At least two EI-eligible employees in the work-sharing unit
Temporary reduction in business activity beyond your control, such as tariffs
Employer, employees, and union (if applicable) must agree

Work-Sharing can be combined with loans or grants, as long as you follow the rules for each program.

How to Prepare Your Application

Before applying for federal support, Canadian companies should take a few key steps to improve their chances:

Gather financial records
Prepare recent financial statements, cash flow projections, and details about how tariffs have affected your business.
Document the impact of tariffs
Provide evidence such as increased costs, lost contracts, or reduced sales due to tariffs or trade actions.
Check eligibility requirements
Review each program’s rules carefully. Use GrantHub’s tools to compare options and confirm your eligibility.
Consult regional economic development offices
Reach out to local agencies for advice and information about available grants and loans.

Taking these steps early can help you avoid delays and strengthen your application.

Common Mistakes to Avoid

Before applying, it’s important to understand where businesses often go wrong:

Waiting until cash is nearly gone
Programs like BCAP require proof that you explored other financing options. Starting early strengthens your case.
Applying for the wrong type of funding
Grants, loans, and EI-based programs serve different purposes. Mixing them up wastes time.
Assuming Work-Sharing is only for small businesses
Large employers can use Work-Sharing if the downturn is temporary and tariff-related.
Ignoring regional delivery organizations
Some supports flow through not-for-profits and economic development agencies, not directly to businesses.

Frequently Asked Questions

Before moving forward, review these common questions:

Q: Is BCAP a grant?
No. The Business Credit Availability Program provides repayable loans or credit. It helps with cash flow but does not replace revenue permanently.

Q: Can mid-sized companies apply for BCAP?
Yes. Both small and mid-sized companies can apply if they meet eligibility criteria and can show a need for extra credit due to tariffs or other disruptions.

Q: Do employees get paid under Work-Sharing?
Yes. Employees work reduced hours and receive EI benefits to partially replace lost wages. EI benefits are taxable income.

Q: Can Work-Sharing be used because of anticipated tariffs, not just applied tariffs?
Yes. The program can cover both actual and threatened tariffs as valid causes of temporary business downturns when special measures apply.

Q: Can my business combine loans, grants, and Work-Sharing?
Often yes. Many companies use Work-Sharing to protect jobs while using loans or grants to stabilize cash flow, as long as each program’s rules are followed.

Next Steps

Tariff impacts rarely affect just one part of your business. Loans can stabilize cash flow, grants can support adaptation, and Work-Sharing can protect your workforce. GrantHub tracks hundreds of active federal and regional programs across Canada—check which ones match your business profile and tariff exposure.

See also:

Repayable vs Non‑Repayable Business Funding in Canada: Program Examples Explained
What Business Expenses Are Eligible Across Canadian Grants and Loans?
How to Use Trade Data and Market Intelligence to Find Export Opportunities

Understanding your options early puts you in a stronger position—before tariffs force tougher decisions. For tailored guidance, explore GrantHub’s resources and eligibility tools.

How Tariff-Affected Companies Can Access Federal Loans, Grants, and Work‑Sharing