Government announces suite of changes to address labour shortages, support workers affected by economic shifts
Ottawa is looking to restrict the use of non-compete agreements at banks and other federally regulated workplaces as part of Budget 2025.
In amending the Canada Labour Code, the federal government would restrict non-competes "to protect workers’ rights, promote labour mobility, and strengthen competition," it said. "This will empower workers to move more freely to a higher-paying career or start their own business."
Ottawa said it will launch consultations on proposed legislative changes for restricting these agreements in early 2026.
The change is part of a suite of new investments and policy changes announced for Budget 2025, aimed at strengthening the Canadian workforce, supporting workers affected by global economic shifts, and addressing labour shortages in key sectors.
“Canadian workers power our economy. We’re taking strong, targeted action to support those affected by trade disruptions and to help every worker build the skills and resilience needed for the future,” said François-Philippe Champagne, minister of finance and national revenue. “Our goal is simple: to maintain and expand Canada’s skilled, educated, and adaptable workforce, and empower the workers who care for us and build the strongest economy of the G7.”
Reskilling and support package
Budget 2025 includes a new reskilling package for workers affected by U.S. tariffs and global market shifts. This package features a digital jobs and training platform, enhanced Employment Insurance (EI) measures, and $570 million over three years for training and employment assistance.
- $50 million over five years (plus $8 million ongoing) to implement a digital tool for job search and applications, and to launch a national online training platform in partnership with the private sector.
- $570 million over three years through Labour Market Development Agreements with provinces and territories to support training and employment assistance for workers impacted by tariffs and market changes.
- $382.9 million over five years (plus $56.1 million ongoing) to launch new Workforce Alliances, bringing together employers, unions, and industry groups to coordinate skills development and investments. A new Workforce Innovation Fund will support projects tailored to local job markets, helping businesses in key sectors and regions recruit and retain needed workers.
- Temporary flexibilities to the Employment Insurance (EI) Work-Sharing Program will provide EI benefits to eligible employees who agree to reduced hours due to decreased business activity, helping employers and employees avoid layoffs. This measure is expected to cost $370.5 million over five years, with $18.5 million ongoing.
- Temporary EI measures will enhance income supports for Canadian workers whose jobs are impacted by economic uncertainty caused by foreign tariffs, with supports expected to cost $3.6 billion over three years.
The share of employers planning for a recession in Canada—for example, by tightening their budgets or pausing investments—has increased slightly, from 28% to 33%, according to a recent report.
Foreign credential recognition
In addition, to address persistent labour shortages—especially in health care and construction—Budget 2025 would allocate $97 million over five years (starting in 2026-27) to establish a Foreign Credential Recognition Action Fund. The fund aims to make the recognition process for foreign-trained professionals "fairer, faster, and more transparent," helping newcomers contribute more quickly to the Canadian workforce.
Many newcomers to Canada already have extensive training in sectors where Canada is experiencing labour shortages,so Employment and Social Development Canada would establish the fund and work with the provinces and territories "to improve the fairness, transparency, and timeliness of foreign credential recognition, with a focus on health and construction sectors," says Ottawa.
This aligns with the already-existing Foreign Credential Recognition Program.
Apprenticeship training
Another component of Budget 2025 is the expansion of the Union Training and Innovation Program, with a proposed $75-million investment over three years starting in 2026-27. This funding will support union-based apprenticeship training in the Red Seal trades, ensuring that Canadian workers are equipped to build major infrastructure and millions of new homes nationwide, according to the federal government.
The Canadian Labour Congress (CLC) believes these investments will yield positive results.
“Doubling the Union Training and Innovation Program is a smart investment in Canada’s future. Unions deliver the most comprehensive, advanced, and high-quality training in the country and provide direct pathways to good union jobs,” the group said. “With this expansion, we can train the skilled workers Canada urgently needs to meet our infrastructure, housing, and clean-energy goals.”
The Ontario government recently announced it is investing $64.2 million over the next three years to expand in-class apprenticeship training.
Personal Support Workers Tax Credit
Recognising the essential role of personal support workers (PSWs), Budget 2025 also introduces a temporary five-year Personal Support Workers Tax Credit.
Eligible PSWs in provinces and territories not covered by existing bilateral wage agreements will be able to claim a refundable tax credit of up to $1,100 per year, equal to 5% of their eligible earnings. This measure is intended to help recruit and retain talent in a sector facing acute shortages, and HR professionals in health care should prepare to update payroll systems and employee communications accordingly.
SEIU Healthcare President Tyler Downey said that this tax credit is “a home run for workers.”
“Putting more money directly into the pockets of PSWs will support retention and help strengthen care for Canada’s seniors,” he said. “This budget announcement shows what’s possible when labour and government work together on ideas to make our health care system stronger by valuing the people who provide it. Prime Minister Carney promised PSWs this tax credit in the election and today he’s proving he’ll keep his promise to make their lives more affordable.”
