Employers in all sectors can cut hours instead of jobs under a program running until March 2028
Employers can now apply for up to $1,000 per participating employee under the Workforce Retention and Retraining Program, a federal measure that funds training for staff working reduced hours rather than facing layoffs.
The program runs from October 2026 until March 2028 and is open to businesses across all sectors that need to transform, retool or diversify.
Patty Hajdu, minister of Jobs and Families and Minister responsible for the Federal Economic Development Agency for Northern Ontario, announced the launch of the online application form through a Government of Canada news release.
The program was announced in August as part of a $3.5bn investment in Rapid Response Supports for Workers and Employers, the release states, a package the government ties to tariffs and other global trade pressures.
Employers already participating in Work-Sharing or receiving support through the Worker Retention Grant do not need to apply and will be transitioned to the new program.
The per-employee funding covers training and administration costs, and employers choose the training themselves.
Eligible options include technical training, digital and foundational skills training, peer-to-peer learning and on-the-job training.
Participating employees keep incomes closer to their normal levels through a combination of EI Work-Sharing benefits and an income top-up tied to taking employer-provided training.
Two structural changes apply to the agreements.
The government is temporarily removing the equal sharing of work requirement, allowing employee hours to be scheduled and distributed more flexibly in the face of tariff disruptions.
Employers and employees can also enter into successive agreements, temporarily allowing for up to 152 cumulative weeks of support.
The release puts expected reach at an estimated 20,000 layoffs prevented, with more than 2,300 employers supported, including close to 1,790 employers receiving income to offset training and associated administrative costs.
“This program will help employers keep the skilled people they depend on and give workers the chance to build new skills so they can meet today’s challenges and seize tomorrow’s opportunities,” Hajdu said in the release.
Since January 2025, temporary flexibilities to the Work-Sharing Program have helped avert around 25,000 layoffs through approximately 1,600 Work-Sharing agreements, according to the release.
Temporary Employment Insurance measures are being extended by up to one year.
Those measures waive the one-week waiting period, provide an extra 20 weeks of EI for long-tenured workers, and temporarily suspend the rule on monies on separation so workers can access benefits immediately after a job loss even if they receive severance, vacation pay or other separation payments.
A further EI measure, introduced for one year, simplifies rules on reasons for separation so that workers who recently changed jobs are not penalised when accessing EI, provided their most recent job loss is through no fault of their own.
Small and medium-sized businesses affected by tariffs are also covered by the Regional Tariff Response Initiative, delivered through Canada’s regional development agencies, which the release says addresses competitiveness, liquidity pressures and diversification into new markets.
