Federal funding builds on Work‑Sharing program that helps businesses avoid layoffs by letting eligible workers share available work, claim EI
As part of a new package of workforce measures, the federal government has opened applications for a Worker Retention Grant for Work‑Sharing employers, aiming to help businesses hold on to staff while workers retrain during periods of reduced activity.
Employment and Social Development Canada (ESDC) said the federal government is investing about $102.7 million over two years in the grant, which builds on the existing Work‑Sharing program that “helps businesses avoid layoffs by letting eligible workers share available work and claim Employment Insurance (EI) for the lost hours.”
Employers with active Work‑Sharing agreements can apply for the new funding and use it to support their Work‑Sharing employees "to upskill and adapt to changing labour market needs,” ESDC stated. The top‑up will allow them to maintain their income while training during lost work time at levels closer to their normal wages, up to 70 per cent of their full‑time pay.
The move is designed to give employers a financial incentive to redeploy and reskill workers rather than resorting to permanent layoffs when tariffs, supply chain issues or broader economic pressures hit.
Details of new grant
Under the new measure, eligible employers already approved for Work‑Sharing can apply for additional federal support that specifically targets training and upskilling for participating employees.
The intention, ESDC said, is to enable businesses to use slower periods to build future‑ready capabilities, while mitigating income loss for affected staff. That support may be particularly relevant in sectors facing cyclical or trade‑related disruptions, such as advanced manufacturing, transportation, energy and mining.
To help employers navigate training options, Job Bank, Canada’s national employment service, has created a dedicated section for Work‑Sharing employers. ESDC said the new resources include “a new Training Finder and direct connections to upskilling platforms with information about thousands of courses, including low‑ or no‑cost options.”
The Work-Sharing Program, administered by Service Canada, allows businesses to temporarily reduce employee work hours while ensuring workers receive Employment Insurance (EI) benefits for lost wages. This program was widely used during past economic downturns, including the 2008-09 financial crisis and the COVID-19 pandemic.
Tackling labour pressures
Minister of Jobs and Families Patty Hajdu announced the Worker Retention Grant in Windsor, Ont., during a visit to Unifor Local 444. It came alongside a wider package of initiatives intended to “grow and protect workers” as Canada’s labour market faces sustained pressure.
In its news release, ESDC said Canada’s labour market “is experiencing sustained pressure from tariffs, skills shortages, supply chain disruptions and broader economic shifts.” The federal response is focused on “transforming the economy to one that is stronger, more sustainable, and more independent, built on the solid foundation of strong Canadian industries and bolstered by diverse international trade partners,” the department stated.
Hajdu framed the package as a way to connect training more directly to employers’ needs.
“Canada’s workforce is strongest when employers and training partners work together,” she said. “As external pressures continue to affect key sectors, these investments will help empower Canadian workers with the skills they need to adapt. Together, these initiatives will help drive major industrial and economic priorities and deliver tangible results for Canadian workers.”
Workforce alliances target key sectors
The grant accompanies the rollout of six national Workforce Alliances in priority sectors:
- housing and construction
- transportation and supply chains
- energy and electricity
- mining and minerals
- the care economy
- advanced manufacturing
According to ESDC, the Alliances have “one core mission: to identify and address pressing labour market challenges and to coordinate public and private investments in skills development to produce lasting opportunities for Canada’s workers where they are most needed to Build Canada Strong.” The priority sectors collectively account for more than one‑third of Canada’s GDP and employ roughly eight million people nationwide, the department said.
ESDC noted that the Alliances will bring together governments, employers, unions, industry groups, post‑secondary institutions and Indigenous partners to “identify workforce pressures, map skills gaps and coordinate sector workforce development action plans to create talent pipelines.” Their work is intended to ensure “workforce resources are aligned with the real needs of Canadian employers and are able to support economic priorities and initiatives, including Build Canada and Major Projects.”
Tariff‑linked disruption driving demand
The new grant and sector alliances build on a set of workforce support measures first announced on Sept. 5, 2025 to assist workers affected by tariffs and global trade disruptions, and later reinforced in Budget 2025.
ESDC reported that Work‑Sharing applications “roughly doubled in 2025 relative to the previous year, with more than 2,000 applications,” and that approximately 80 per cent of all applications referred to tariffs. More than 1,400 tariff‑related applications have been approved, “helping to prevent approximately 20,000 layoffs and affecting more than 52,000 workers,” the department said.
Canadian manufacturers in heavily tariffed industries are seeing declining or stagnant employment despite mixed trends in output and rising prices, with auto, metals and forestry workforces under the greatest strain from the U.S. tariffs, according to an RBC Economics report.
In addition to the Worker Retention Grant, Ottawa will provide employment assistance and reskilling supports for up to 66,000 workers across Canada, including displaced auto workers, through a $570‑million investment delivered via labour market agreements with provinces and territories, according to ESDC.
