Protect Ontario Financing Program: A Guide for Ontario Employers

Ontario businesses working in steel, aluminum, and auto manufacturing have faced new financial pressures from recent U.S. tariffs. Many employers in these sectors are looking for ways to manage increased costs and keep their businesses stable. In response, Ontario has introduced a new financing program.

This blog explains what the Protect Ontario Financing Program is and how eligible employers can apply for it.

What is the Protect Ontario Financing Program?

The Protect Ontario Financing Program is Ontario's $1 billion liquidity support initiative for businesses affected by U.S. Section 232 tariffs. Section 232 tariffs are trade restrictions the United States placed on Canadian steel, aluminum, and auto products to protect American industries.

This Ontario financing program provides term loans to help qualifying businesses cover working capital expenses. Working capital refers to the money companies use for day-to-day operations like payroll, rent, and utilities. The program is part of the larger $5 billion Protecting Ontario Account included in the 2025 Ontario Budget.

Key program features:

• Minimum loan amount: $250,000 per business
• Loan terms: Up to 72 months (6 years) to repay
• Interest rates: Set at or below market prime rate
• Eligible sectors: Steel, aluminum, automotive, and their supply chains

Why now? Tariffs are hitting hard

U.S. Section 232 tariffs increased the cost of exporting Canadian steel, aluminum, and auto products to the United States. Since the U.S. is a major market for Ontario manufacturers, these tariffs created immediate cash flow problems for many companies.

Without quick relief, businesses face tough choices: cut staff, slow production, or worse. Ontario's program steps in to bridge that gap, preventing layoffs and keeping supply chains intact. By focusing on working capital, it buys you time to pivot, negotiate, or wait out the trade storm.

Who qualifies for the loan?

The eligibility requirements focus on business size, sector, location, and demonstrated impact from U.S. tariffs.

Business structure requirements:

• For-profit status: Must be incorporated or a limited partnership
• Ontario registration: Legally registered to operate in Ontario
• Minimum revenue: At least $2 million annually
• Employee threshold: At least 10 full-time employees in Ontario

Operational history:

• Years in business: Minimum 3 years of operations
• Financial records: Audited financial statements for previous 3 years
• Tariff impact: Material working capital challenges due to Section 232 tariffs

Companies must also demonstrate they have explored federal funding options before applying to the Protect Ontario Financing Program.

Ineligible applicants include:

• Non-profit organizations and charities
• Start-up companies without established operations
• Businesses seeking funds for equipment purchases or refinancing

Eligible and ineligible uses of funds

The working capital support covers specific operational expenses but excludes capital investments and debt restructuring.

Approved expenses:

• Payroll costs: Employee wages, benefits, and related expenses
• Lease payments: Facility rent and equipment leasing costs
• Utilities: Electricity, heating, water, and other operational services

Prohibited uses:

• Capital purchases: New equipment, machinery, or property
• Debt refinancing: Paying off existing loans or credit facilities
• Business acquisitions: Purchasing other companies or assets
• Relocation costs: Moving operations to different locations

Application process

The application starts with an online eligibility check. If a business meets the preliminary eligibility requirements and screens through the eligibility assessment tool, they will be contacted to discuss the application process and the next steps required to qualify.

Loan terms and repayment

The financing structure provides flexibility while ensuring responsible lending practices.

Repayment schedule:

• Term length: Up to 72 months (6 years)
• Payment frequency: Annual payments
• Prepayment: No penalties for early repayment
• Grace period: Potential 12-month principal-free period at provincial discretion

Security requirements: Borrowers must provide security satisfactory to the province and demonstrate ability to meet repayment obligations. The province may register liens (legal claim) against business assets as collateral.

Maintaining compliance during the loan term

Recipients have ongoing obligations throughout the loan period to maintain program eligibility.

Businesses must keep the same number of full-time Ontario employees reported in their application and continue operations in the province. Regular reporting to the government includes financial updates and proof of payroll maintenance.

Do you have questions about this program?

Employment standards compliance becomes particularly important during financial stress. Maintaining accurate HR documentation and workplace safety standards helps ensure continued eligibility for government programs. In tough times, HR slip-ups (like overtime errors) can jeopardize eligibility.

Peninsula experts can guide you on how to leverage such measures and support you with any other HR, health & safety, or employee issues. To learn more about how our services can help your business, please call an expert at (1) 833 247-3652.