Skills & Careers
Canadian employers facing a slowdown can now apply online for a federal program that lets them cut workers’ hours instead of laying them off, while the government supports the workers’ income and helps pay for retraining. Employment and Social Development Canada announced the launch of the Workforce Retention and Retraining Program on Thursday, Oct. 22, in Gatineau, Quebec.
The program is not new money announced this week. It is part of the C$3.5 billion in Rapid Response Supports for Workers and Employers that the federal government announced on Aug. 25, 2026, as Canadian businesses adjust to trade pressures including U.S. tariffs. The department said the program runs from October 2026 until March 2028 and is open to employers in all sectors.
How the support works
The program builds on Employment Insurance Work-Sharing, in which employees agree to a temporarily shorter workweek and collect EI Work-Sharing benefits for the hours they lose. Under the new program, employees who take employer-provided training outside their working hours can also receive an income top-up, which the department says is meant to keep their earnings closer to normal levels. Neither the release nor the backgrounder states the size of that top-up.
Employers can receive up to C$1,000 per participating employee to help cover training and related administrative costs. According to the backgrounder, employers in the retraining component must commit to training for at least 40% of the agreement period. Eligible training can be online or in person and can include technical, digital and foundational skills, peer-to-peer learning and on-the-job training; the department lists digital literacy, workplace safety, numeracy and problem-solving as examples. Employers can choose courses together with employees, unions and provincial or territorial representatives.
The government has also temporarily removed the requirement that reduced work be shared equally across participating employees, giving employers more flexibility in scheduling. Successive agreements can provide up to 152 cumulative weeks of support for employers responding to tariff disruptions.
Who can apply
The application page sets out the mechanics. Employers applying because of a downturn must attest to at least a 10% reduction in business activity within the previous six months and be ready to show sales or production figures. Each Work-Sharing unit needs at least two employees, and the average reduction in hours must be between 10% and 60%. Requested agreements run 6 to 26 weeks, with extensions to a maximum of 38 weeks under that page’s rules, and the start date must be a Sunday at least 10 business days after a completed application is submitted.
Employers that are not currently seeing a drop in activity but are retooling or diversifying can apply under a business adaptation stream, but participation in the retraining grant component is then mandatory. Applications go through the government’s Grants and Contributions Online Services portal. Employers that already have a Work-Sharing agreement or receive the Worker Retention Grant do not need to reapply; they move to the new program automatically.
What the government expects
The department said the program is expected to help prevent an estimated 20,000 layoffs and support more than 2,300 employers, including close to 1,790 that receive funding for training and administrative costs. The backgrounder separately says up to 66,000 workers are expected to benefit, about 50,000 of them through retraining supports. These are government projections, not results. The department also said temporary Work-Sharing flexibilities have helped avert around 25,000 layoffs through approximately 1,600 agreements since January 2025.
Alongside the launch, the government said several temporary EI measures are being extended by up to one year, including waiving the one-week waiting period, providing an extra 20 weeks of benefits for long-tenured workers, and suspending the rule that delays benefits when workers receive severance or vacation pay.
“Workers and businesses are at the heart of our economy, and of the communities where they live and work,” said Patty Hajdu, Minister of Jobs and Families.
For workers, the practical effect is that a reduced schedule could come with paid-for training rather than a layoff notice. Eligibility is tied to EI rules, and the actual income employees receive will depend on their EI benefit and the top-up, which the published materials do not quantify. The program applies only in Canada.
Sources
- Employment and Social Development Canada, “Workforce Retention and Retraining Program launched to help employers keep their workforce while facing economic challenges,” October 22, 2026. https://www.canada.ca/en/employment-social-development/news/2026/10/workforce-retention-and-retraining-program-launched-to-help-employers-keep-their-workforce-while-facing-economic-challenges.html
- Employment and Social Development Canada, “Backgrounder on Workforce Retention and Retraining Program,” October 22, 2026. https://www.canada.ca/en/employment-social-development/news/2026/10/backgrounder-on-workforce-retention-and-retraining-program.html
- Employment and Social Development Canada, “Workforce Retention and Retraining Program – Work-Sharing: How to apply,” accessed October 23, 2026. https://www.canada.ca/en/employment-social-development/services/work-sharing/apply.html
- Employment and Social Development Canada, “About the Workforce Retention and Retraining Program,” accessed October 23, 2026. https://www.canada.ca/en/employment-social-development/programs/ei/workforce-retention-retraining.html
Featured photo: Portage IV, left, and part of Portage III, right, in the Place du Portage office complex in Gatineau, Quebec, seen from the corner of rue Laurier and boulevard Maisonneuve on Sept. 17, 2016. Representative image; not a workplace using the program. Photo: Jeangagnon, via Wikimedia Commons (CC BY-SA 4.0). Cropped from the original.
