The Work-Sharing Program: Critical Support at a Time of Tariffs
Me Marie-Gabrielle Bélanger, CIRC, lawyer, partner, Fasken
With the assistance of Me Isabelle Bertrand, CIRC
Since the beginning of the year, the United States has both threatened to issue and issued tariffs, a situation that has had palpable effects on the Canadian market and confronted businesses with huge challenges. These tariffs have the potential to cause declines in business activity, temporary layoffs and economic instability. Amid these concerns, the Work-Sharing Program (hereinafter the “Program”) is proving to be a valuable tool for Canadian businesses faced with temporary decreases in activity. Thanks to recent adjustments, Canada's planned response to U.S. tariffs now includes additional special measures to support businesses and their employees in these uncertain times.
What is the Work-Sharing Program?
The Program is a Canadian government initiative that was designed to help employers and employees avoid layoffs during temporary decreases in the normal level of business activity that are beyond the control of employers. Since its inception, the Program has enabled many businesses to retain their qualified and experienced workers.
According to Employment and Social Development Canada, the Work-Sharing Program received 1,019 applications and approved 706 agreements, worth an estimated $97,353,866 between March 31, 2024, and April 4, 2025. Thanks to these agreements, approximately 9,432 layoffs were avoided, and 26,830 employees have been able to participate in the Program. The average processing time for applications is 9.1 business days.
How does the Program work?
Work-Sharing agreements involve employers, employees, unions (where applicable) and Service Canada. Interested parties must agree to participate in the Program. Then, the person representing the employer and the person representing the union (where applicable) must apply to participate in the Program.
Here are some of its main features:
Work-Sharing unit: A Work-Sharing unit is a group of employees with similar job duties who agree to reduce their hours of work over a specific period;
Equal sharing of work: All members of a Work-Sharing unit agree to reduce their hours of work by the same percentage and to share the available work;
Expected work reduction: A Work-Sharing unit must reduce its hours of work by at least 10% to 60%. The reduction hours can vary from week to week, but the average reduction over the course of the agreement should remain within the range of 10% to 60%;
Agreement length and extension: A Work-Sharing agreement must last a minimum of 6 consecutive weeks and can last up to a maximum of 26 consecutive weeks. An extension of up to 12 weeks may be requested to bring the total duration of the agreement to 38 weeks;
Compensation and benefits: Over the course of the Work-Sharing agreement, employees receive Employment Insurance (EI) benefits for the days or hours they do not work. In return, employers agree to maintain the employee benefits that participating employees already receive.
The Program is beneficial in a number of ways for Canadian businesses. It not only allows them to temporarily lower their salary costs, but also to retain their employees’ expertise. Moreover, it fosters operational flexibility that businesses can leverage to make quick adjustments in the event of declines in activity without creating costs or disruptions associated with layoffs.
The Program provides essential protection to workers by giving them job security and mitigating the risk of total unemployment. The EI benefits included in the Program lend a degree of financial stability by partially offsetting the reduced hours of work. This means that employees can continue to practice their trade and keep their skills up to date. Plus, they keep their employee benefits and seniority. They can also take the opportunity to pursue training and acquire new skills.
What are the new special measures?
Expanded eligibility
Special measures were put in effect from March 7, 2025 to March 6, 2026 to provide additional support to businesses affected by U.S. tariffs. Employers experiencing a decline in business activity attributable to the threat or potential realization of tariffs may be eligible if they:
- are operating in Canada for a minimum of one year;
- have a minimum of two EI eligible employees who agree to a reduction in hours and to share any available work.
Under the special measures, employer eligibility is expanded to include:
- non-profit and charitable organizations experiencing a reduction in revenue levels as a direct or indirect result of the tariffs;
- cyclical or seasonal employers;
- employers experiencing a decrease in work activity over the past 6 months of less than 10% and allowing utilization of Work-Sharing to exceed 60%.
Employee eligibility has also been expanded to include:
- employees who are not year-round, permanent, full-time or part-time employees, specifically seasonal or cyclical employees;
- employees assisting the employer recovery efforts.
Additional flexibilities and benefits
Special measures flexibilities include:
- maximum duration of Work-Sharing agreement up to 76 weeks;
- waiving the required cooling-off period between successive Work-Sharing agreements while special measures are in place;
- focusing recovery measures on supporting the business' ability to maintain its viability despite the impacts of U.S. tariffs.
Conclusion
The Program's new measures provide critical support to Canadian businesses confronted with the challenges of U.S. tariffs. By expanding eligibility and providing additional flexibilities, the Program helps keep businesses viable and protect jobs, which promotes economic stability in the current market. Although it is complex, the Program is structured to cover all relevant actors in such way that guarantees equal distribution of reduced work and adequate financial support for workers.
Source: VigieRT, Ordre des conseillers en ressources humaines agréés du Québec, April 2025
