How this New Grant Provides Relief for Canadian Manufacturers affected by Tariffs
In recent years, the global trade landscape has shifted. Tariffs once aimed at distant rivals now land squarely on Canadian businesses. When Washington or Beijing imposes a duty spike, Canadian manufacturers — especially small and medium-sized ones — feel the shockwaves. Constrained margins, disrupted supply chains, and uncertain export access have become the new normal.
In that climate, Canada responded with a bold intervention: the Regional Tariff Response Initiative (RTRI). This federal program provides targeted financial support to Canadian manufacturers grappling with tariff-driven cost increases. The logic is straightforward: help firms adapt and survive now, so that they grow stronger and more resilient later.
In this article, we’ll explore how RTRI came into being, who is eligible, how funding works, what kinds of projects qualify, the steps to apply, and how Quebec and Ontario are shaping their own approaches. This is not a how-to manual, but rather an informative guide to help you appreciate the structure, purpose, and strategic relevance of RTRI — especially if your company might benefit from professional support.
Why RTRI Was Created: Trade Shocks Meet Canadian Industry
When global powers impose new tariffs, the spillover effects often land on third countries. Canadian firms, integrated into supply chains with the U.S. and China, found themselves squeezed from both sides.
Between 2022 and 2025, several trade policies escalated. The United States, under shifting industrial and political priorities, introduced stricter “Buy American” measures and tariff actions that affected Canadian aluminum, steel, and other exports. At the same time, Canada joined U.S. and European efforts to sanction Chinese goods in sectors like electric vehicles, leading to reciprocal countermeasures from Beijing. China responded by targeting Canadian agricultural products—tariffs on canola, pork, and seafood among them.
Then in early 2025, the situation escalated. The U.S. imposed sweeping new tariffs on Canadian goods — 25% across many goods plus 10% on a range of energy-related exports. Canada responded with retaliatory tariffs on $30 billion of U.S. goods. Canadian manufacturing, which had long seen the U.S. as its primary market, suddenly faced barriers on both fronts.
The results were sharp. Canadian SMEs reported rising costs, especially for imported inputs. Many lost margins or turned to alternative suppliers, often less efficient or more expensive. Export markets became murkier. Businesses that had long relied on stability now faced uncertainty.
In that context, the federal government launched the Regional Tariff Response Initiative. The aim: cushion the shock, motivate adaptation, and help Canadian manufacturers pivot toward resilience.
The political narrative was clear. Ottawa and allied policymakers framed RTRI not as mere relief, but as a strategic tool in a more volatile trade era. Ministers spoke of building up domestic strength, diversifying economic ties, and reducing reliance on foreign markets subject to political shifts. In regions with heavy industrial presence, local MPs hailed it as a necessary shield for jobs and investment.
In short, RTRI is both policy and symbol. It signals that Canada recognizes tariffs are not just external irritants, but existential stressors for its manufacturing base — and that strategic intervention is now part of the playbook.
Program Overview: What RTRI Intends to Do
The Regional Tariff Response Initiative offers financial support to eligible Canadian manufacturers so they can adapt to the burden of tariffs, re-position in new markets, and strengthen internal capabilities. It is delivered through regional development agencies (RDAs), which means provinces or territories often handle evaluation, administration, or co-funding aspects.
Here are its main contours:
Maximum support per project: up to CAD 1 million in financial assistance.
Type of funding: non-repayable grants (i.e. contributions) or, for larger or special projects, 0% interest loans — or a hybrid of both, depending on the size and nature of the project.
Evaluation principle: projects are assessed on impact, merit, and alignment, not on a first-come, first-served basis.
Provincial envelope management: each province controls a portion of the RTRI budget, meaning local priorities and evaluation details can vary.
Time frame: projects should start within a specific window and complete by a determined deadline.
Retroactive eligibility: some costs incurred back a set period before the application may qualify, but only from a defined baseline date (not before tariff events).
Cost sharing: applicants usually must contribute their own funds (often a minimum percentage) to show commitment and share risk.
Eligibility: Who Can Access RTRI
To determine whether your firm is potentially eligible, here is what we know about the eligibility criteria. Note: provincial agencies may add regional filters or thresholds, so this is a national framework, not an absolute guarantee.
Firm-level criteria
Must be a Canadian SME with significant operations in Canada.
Employment cap: fewer than 500 employees (though provincial bodies may interpret this flexibly).
Annual revenue: generally around CAD 2 million or more, to ensure financial capacity and scale.
Established operations: the business must have been viable prior to tariff pressures (i.e. before the major tariff dates).
Demonstrated tariff impact: the firm must show direct or indirect impact from tariffs — either past, current, or forecasted (rising costs, reduced margins, supply breaks, lost sales).
Sector-level criteria
Only manufacturers or processors qualify. That means firms that produce, transform, or fabricate goods for business markets.
Pure distributors, resellers, or firms whose operations are solely trading or retail are typically excluded.
Construction companies that do not themselves produce or transform materials are out of scope.
Firms in value chains that include manufacturing are eligible — e.g. component fabricators, parts producers, or converters.
Other disqualifiers
If the business cannot show a credible link between tariff shocks and its financials, it may be denied.
Projects solely in non-commercial domains — for example, pure research without short- or medium-term business impact — may not qualify.
Also, some firms may be ineligible if they already received comparable support under similar programs, depending on stacking rules.
The firm must comply with federal, provincial, and local obligations (taxes, environmental permits, local regulation) — inability to demonstrate compliance can lead to disqualification.
In provinces like Quebec and Ontario, regional development bodies often layer additional rules — thresholds for regional benefit, or priority sectors — but the national template gives a solid base.
Funding Structure and Limits
Understanding the shape of the financial assistance is critical. Here’s how RTRI funding works in practice, and where strategic design of your project makes a difference.
Grant vs. interest-free loan
For many projects, funding comes as a non-repayable contribution (i.e. grant). This is the preferred mode when firms are making smaller or medium investments.
For large or high-risk projects, or in provinces where budget stretch is tight, funding may be offered as a 0% interest loan or a hybrid (part grant, part loan).
The choice depends on project size, risk, provincial policy, and how transformative the project is judged to be. The most ambitious plan may receive loan components to stretch the envelope.
Maximum amount
The cap per project is CAD 1 million in combined support.
Smaller, targeted projects (for example, market diversification) may receive smaller maximum contributions (e.g. CAD 300,000 in some provinces).
The program encourages leveraging other funding sources — provincial, municipal, private — so your project budget may exceed CAD 1 million, but RTRI will not cover it in full.
Cost sharing and contribution
Applicants generally must fund a portion of project costs themselves (often 10–50 %, depending on region and risk).
This ensures the firm has skin in the game and helps moderate the financial burden on RTRI’s budget.
For projects that are non-commercial (e.g. public good, regional infrastructure), higher contribution from the program may be possible, in rare cases up to full coverage.
Eligible costs
Most of the costs associated with execution of qualifying projects can be included:
Salaries, wages, and benefits for staff directly working in the project
Equipment, machinery, capital expenditures needed for modernization
Consulting, technical services, engineering, external expertise
Market expansion costs: marketing, travel, trade missions, certifications
Supply chain and logistics upgrades, process redesign
Fees related to compliance, certifications, traceability systems
Non-eligible costs
To keep the program focused and fair, certain costs are excluded:
Basic research, exploratory R&D at early technical readiness levels
Land purchase, goodwill, or speculative real estate
Dividends, bonuses unrelated to the project, lobbying costs
Paying off existing debts or refinancing
Costs incurred before the baseline date (i.e. before essential tariff disruption thresholds)
Depreciation, amortization of pre-existing assets
Time windows and retroactivity
Projects must begin within a defined date window and conclude by a prescribed deadline.
Some costs incurred before the application (i.e. in the past 12 months) may be eligible — but only back to a tariff baseline date (often the date tariffs were imposed).
Costs incurred too early (before tariff impact) are usually disqualified.
The structure is built this way so that support is meaningful, targeted, and encourages future sustainability — not a blank cheque.
What Kinds of Projects Qualify
Not every business plan fits RTRI’s spirit. The program is oriented toward strategic, change-oriented investment. Below are the major categories—and examples—of projects likely to attract approval.
Market Diversification Projects
Tariffs often shut off export routes or make them less profitable. One of the strongest response levers is to broaden markets.
Entering new geographic markets (within Canada or internationally)
Hiring market research consultants or marketing specialists
Obtaining certifications, traceability systems, or meeting technical standards needed to access new buyers
Rebranding or packaging adjustments to satisfy regional compliance rules
Participating in trade missions, exhibitions, business development missions
Such projects can reduce dependency on a single trade route subject to tariffs. But the applicant must clearly show that tariff pressure justifies shifting strategy.
Productivity and Process Improvement Projects
Many firms will face persistent cost pressures thanks to tariffs on inputs. To counteract that, RTRI supports modernization.
Upgrading machinery or adding automation
Integrating digital manufacturing, robotics, or sensors
Redesigning processes to improve efficiency or reduce waste
Improved layout, workflow optimizations, lean manufacturing
Facility upgrades to reduce energy or raw material usage
Quality control upgrades to reduce defects or returns
These investments help firms absorb higher input costs or operate with tighter margins.
Adaptation & Impact Mitigation Projects
This category is about bridging the gap between existing structure and needed resilience.
Projects that directly link tariff-induced losses to proposed business changes
Feasibility or impact studies demonstrating the economic effect of tariffs and the projected payoff of changes
Supply chain restructuring or alternate sourcing (locally or regionally)
Risk assessments and mitigation planning
Training or upskilling staff to manage new processes or markets
Firms must clearly show the causal chain: tariffs increased costs or reduced revenues; your project mitigates that; the anticipated outcome is sustainable gains.
Because RTRI is about helping adaptation, applicants with the strongest and clearest linkage between tariff shock and project plan tend to fare better in evaluation.
Application Process & Evaluation Insights
While the details may vary by province, the core application path is similar. Importantly, managing the process well can increase your odds — and that’s where experienced guidance helps.
Steps in the Process
Pre-qualification or intake You may need to submit a short expression of interest or intake form. This helps the provincial agency assess whether to invite a full application.
Full application submission This includes a project plan, budget forecast, financial statements, evidence of tariff impact, supporting quotes or bids, supply chain details, and a narrative justification.
Technical review & assessment Experts evaluate the application based on criteria like alignment with program goals, projected economic impact, feasibility, risk, and regional alignment.
Approval / negotiation / agreement If approved, a formal contribution agreement is negotiated and signed, detailing reporting, payment schedule, milestones, and deliverables.
Project execution & reporting You begin the project, submit progress or milestone reports, invoices and receipts, and monitoring data.
Final audit / closeout At project end, a final report and financial reconciliation are submitted. Audits may confirm eligible costs and compliance.
Typical review time is about 90 business days after a complete application, though regional delays or high demand may stretch that.
Evaluation Criteria & Key Differentiators
Projects are evaluated not simply on budget size, but on strategic merit. Here are the most important criteria that tend to influence decisions:
Impact and scale: How much economic value, jobs, or revenue shift the project can generate
Linkage to tariff impact: The stronger and clearer your case that tariffs disrupted your business and your proposal addresses that disruption, the better
Feasibility and risk management: Realistic timelines, resource allocation, mitigation for obstacles
Regional benefit: Jobs retained or created in the home province or region, supply chain localization, spillover effects
Financial capacity: The applicant’s ability to carry cost overruns, cash flow to support timing gaps, credit or assets
Innovation and sustainability: Will the project leave the firm stronger and better positioned post-tariff relief
Documentation & Supporting Evidence
To succeed, your application must include robust supporting evidence. Examples include:
Audited financials before and after tariff impositions
Proof of tariff exposure: invoices, cost breakdowns, supplier imports, quotations with tariff costs
Third-party quotes or bids for equipment or services
Market studies or forecasts that justify diversification strategy
Risk assessments, project timelines, Gantt charts
Organizational charts or personnel plans
Compliance certificates, permitting documents, licensing evidence
In many cases, support from a grant-advising firm will help you sharpen your narrative, align your budget, and ensure documentation meets agency expectations. The agencies will expect coherence, clarity, and professional planning.
Quebec & Ontario: Provincial Interpretations and Regional Realities
Because each province manages its own portion of RTRI funding and evaluation, Quebec and Ontario warrant particular attention due to their manufacturing weight and regional dynamics.
Quebec
In Quebec, the regional development body (often via Quebec’s innovation or economic development agencies) may add regional priorities such as focusing on aerospace, electronics, cleantech, and advanced manufacturing. Quebec tends to emphasize local supply chains, green transition, and regional equity in funding distribution.
Quebec operators may face additional layers such as French-language justification, bilingual compliance, and alignment with provincial industrial strategies like Plan Nord, Investissement Québec, or sectors tied to transition énergétique. Quebec’s application process may give weight to projects that:
Support local supplier development (e.g. sourcing within Quebec)
Integrate green or circular economy principles (energy efficiency, reduced waste)
Reduce carbon footprint or support decarbonization
Build capacity in underdeveloped regions (e.g. Abitibi, Saguenay)
In Quebec, the matching contribution requirement may be more stringent in some calls, and the review process might emphasize French content. Because of bilingual or dual-language requirements, documentation often needs to be well translated and contextualized for both federal and provincial layers.
Ontario
Ontario, as Canada’s largest manufacturing hub, faces huge demand and strong competition among applicants. The provincial RDA or economic agencies may emphasize sectors such as auto parts, machinery, cleantech, food processing, and advanced materials.
In Ontario:
The provincial review may prioritize projects that strengthen Ontario’s position in key export chains (e.g. North America, Mexico, Europe).
Because Ontario firms often trade heavily with the U.S., proving tariff impact and competitive loss is crucial.
Ontario’s grant bodies might place more scrutiny on job retention, regional spread (i.e. expanding beyond the Golden Horseshoe), and innovation in automation or digitization.
Due to volume, competition will be fierce, making the clarity of project narrative, budget realism, and evidence of leverage even more critical.
In both Quebec and Ontario, firms may benefit from early conversations with regional development bodies, even during the planning stage, to understand provisional thresholds, preferences, or regional emphasis.
Strategic Implications of RTRI for Canada’s Manufacturing
RTRI is more than a short-term relief measure — it is part of a larger strategic shift in Canada’s industrial policy. Here’s how:
Encouraging resilience over subsidy dependency Rather than perpetuating reliance on bailouts, RTRI is structured to reward structural improvements. Firms are expected to emerge in better shape than before.
Diversification beyond the U.S. For decades, Canadian exports have been heavily tied to the U.S. RTRI nudges firms to look toward Europe, Asia, Latin America, or underserved Canadian markets — reducing vulnerability to any single trade partner’s policy shifts.
Regional development and equity By routing funds through provinces and regions, RTRI aims to support industrial capacity outside major metro zones. In doing so, it can help slow industrial decline in regions hurt by globalization.
Modernization and technology adoption The productivity and process improvement focus drives adoption of automation, digital tools, and efficient practices. Over time, that shifts the competitive baseline upward for Canadian manufacturing.
Strengthening supply chains Encouraging local sourcing, internal logistics improvements, and diversified inputs helps reduce exposure to disrupted global supply chains — a lesson reinforced during pandemic lockdowns and now tariff pressures.
Signal to investors and markets Launching RTRI signals to private capital that Canada is serious about maintaining manufacturing viability. It lowers policy risk in sectors exposed to trade and may unlock more private investment.
For SMEs, tapping supply for such a transition is difficult on their own. That is why professional guidance in navigating grant processes and aligning project design is often invaluable.
Conclusion: Why RTRI Matters and What to Do Next?
The Regional Tariff Response Initiative is Canada’s bold response to a tougher global trade regime. It acknowledges what many businesses already feel: tariffs upend predictability. RTRI is designed to provide lifelines, but not forever crutches — its structure nudges toward transformation, not dependence. If your firm faces tariff-driven cost pressures, the logic is clear: this is a rare opportunity to obtain funds that reward strategic change. Whether it’s diversifying markets, upgrading production, or reworking supply chains, the right project aligned with RTRI’s core goals can deliver both support and competitive gains.
But like any major government funding program, success depends on how well your project is structured and justified. Companies that clearly demonstrate the link between tariff challenges and their growth plans are the ones most likely to secure meaningful funding.
That’s where our team can help. We specialize in guiding manufacturers through every stage of the process — from eligibility assessment to project design, documentation, and funding optimization.
Don’t miss out on this opportunity. Fill out our quick form, and one of our advisors will review your eligibility and help you build a strong RTRI application tailored to your goals.
