Trump tariff threat: Canada preps potential pandemic-level relief plan, White House says Feb. 1 ‘still holds’

President Donald Trump arrives to speak at the 2025 House Republican Members Conference Dinner at Trump National Doral Miami in Doral, Fla., Monday, Jan. 27, 2025. (AP Photo/Mark Schiefelbein)

The federal government is planning a stimulus package to help businesses and Canadians if U.S. President Donald Trump imposes tariffs on Canadian goods, but the scale of the relief will depend on the scope of the tariffs, sources tell CTV News.

The sources also say that the aid could reach pandemic-level relief, but the response will be contingent on how big Trump’s tariffs are. Specific programs also have yet to be designed, according to sources.

In late November, Trump threatened to impose a 25 per cent tariff on all imports from Canada and Mexico on day one of his second term. While the commander-in-chief didn’t follow through on that threat, Trump has ordered a study into alleged unfair trade practices by April 1 but said during a signing ceremony for a flurry of executive orders last week that he’s considering levying tariffs as soon as Feb. 1.

Speaking to reporters on Tuesday afternoon, White House Press Secretary Karoline Leavitt said Trump’s Feb. 1 date “still holds.”

“(Trump) was asked and answered this question this past weekend, when he took a lot of questions from the press and he said that the February 1 date for Canada and Mexico still holds,” Leavitt said.

Trump initially used the flow of illegal migrants and drugs over the border as the rationale for imposing the steep tariffs, but he has since shifted his rhetoric to praising the use of tariffs on their own merit.

Asked whether Canada has “met the bar” to address Trump’s concerns and avoid tariffs, Leavitt said “I won’t get ahead of the President again on advocating to foreign nations on what they should or shouldn’t do to get away from these tariffs,” later adding, “as far as I’m still tracking and that was last night talking to the President directly, February 1 is still on the books.”

Many economic experts say a tariff war could wreak havoc on the Canadian economy and cost millions of jobs. According to the Canadian Chamber of Commerce, a 25 per cent tariff could cost the average Canadian household $1,900 annually and shrink Canada’s gross domestic product (GDP) by 2.6 per cent.

Prime Minister Justin Trudeau had already signalled that the federal government will step in to support Canadians should the tariffs move ahead.

At a caucus retreat last week in Montebello, Que., Trudeau acknowledged that a trade war would negatively impact Canadian consumers.

“There will be costs for Canadians if we move forward on tariffs to the United States, and that’s why we will be there to support and compensate Canadians and Canadian businesses, depending on the response we have,” Trudeau said.

The sources also say that any aid package does not need to happen on the first day tariffs are imposed and will address economic impacts as they become apparent.

Will the opposition support tariff relief?

Any new relief program would require Parliament to resume and support from the opposition. But the Conservatives, NDP and Bloc Québécois have all said they intend to bring down the minority Liberal government at the first opportunity.

Parliament is currently prorogued until March 24, but the sources tell CTV News that this is not a concern as aid would not need to be rolled out immediately.

When the COVID-19 pandemic began in March 2020, the federal government quickly rolled out an $82-billion emergency response package to help Canadians and businesses. That initial package included $55 billion to help businesses through tax deferrals and wage subsidies, and $27 billion in direct supports.

Asked on Tuesday if he would keep the Liberals in power to support a bailout package, NDP Leader Jagmeet Singh would not answer directly. Singh also said he has not had any conversations with the government on the matter.

“I think we need to come together to have a discussion about what is the best way forward. I’ve not had any discussions with the government related to this,” Singh said. “If there is any desire to move forward, the government should call us together, like we did during COVID and discuss a plan that supports workers.”

Bloc Québécois Leader Yves-François Blanchet, meanwhile, said “I see no way I would support any assistance of the government.”

“I believe the intention would be to create a context in which the government would get one week, oh two weeks, oh three weeks and then they remain there longer than supposed (to),” Blanchet said Tuesday.

In a statement to CTV News, Conservative Deputy Leader Melissa Lantsman reiterated the party’s call for the Liberals to reconvene Parliament to debate tariff options.

“This is why common sense Conservatives called for Parliament to return a week ago. While Parliament is not scheduled to resume for another seven weeks while Liberals decide which ‘Just Like Justin’ leader they select, tariffs could be hitting in as soon as a few days,” Lantsman said.

The federal government has repeatedly said it will be ready to respond and has insisted that everything is on the table when it comes to retaliation, including cutting off Canadian energy exports to the United States or imposing an export tax on certain products and resources.

Foreign Affairs Minister Melanie Joly is heading to Washington this week and is set to meet with new U.S. Secretary of State Marco Rubio on Wednesday.

Speaking to reporters on Monday, Joly said preventing tariffs “is our number one priority.”

“We believe that diplomacy can work, and that’s why we’re having private conversations, and we won’t negotiate in front of the public,” Joly said. “We believe that our arguments are strong. I think that I’ve had numerous conversations where the reaction was actually very positive, but meanwhile, there’s still a lot of work.”

With files from CTV News’ Vassy Kapelos and Spencer Van Dyk