As the U.S.-Canada trade war continues to escalate, many employers are being forced to make difficult decisions about their workforce. During this period of economic uncertainty, employers are considering how best to manage their workforces. We wanted to provide an update on recent measures introduced by the federal government to provide additional support to businesses and workers affected by U.S. tariffs.
New and Extended Employment Insurance Measures
The federal government has announced the extension and introduction of several temporary EI measures as part of its response to U.S. tariffs.
In particular, the government has announced the following EI-funded measures:
- Extending the waiver of the one-week waiting period for EI benefits for an additional year, until October 10, 2027.
- Extending the measure that allows workers to receive EI benefits without first using up separation-related payments received from a former employer, until October 10, 2027.
- Providing eligible long-tenured workers with an additional 20 weeks of EI benefits, until June 2027.
The government is also introducing a new one-year temporary measure allowing claimants who voluntarily leave their jobs to claim EI benefits if their most recent job losses were through no fault of their own.
Extended Special Measures for Work Sharing Program
The federal government is also expanding support for employers seeking to retain employees during periods of reduced business activity.
The Worker Retention Grant is available to employers in all sectors that have an approved and implemented EI Work-Sharing agreement. The grant provides additional income support to EI-eligible employees who are working reduced hours and participating in training, with the goal of keeping their earnings closer to their normal wages during the Work-Sharing period.
Financial Supports for Businesses Affected by Tariffs
On August 25, 2026, the federal government announced new financial supports for businesses affected by U.S. tariffs. These supports include expanded non-repayable funding for small and medium-sized businesses through the Regional Tariff Response Initiative, additional BDC financing to address liquidity pressures, and $2 billion for projects that strengthen and diversify Canadian businesses and supply chains. Businesses affected by U.S. tariffs are encouraged to review these initiatives and consider how they may assist with their workforce planning.
If you are considering temporary layoffs, work-sharing arrangements, workforce reductions or other operational changes because of the U.S. tariffs, we strongly recommend that you reach out to a member of the IFW team. As experienced employment counsel, we can help you mitigate the risks and costs to your business during these uncertain times.
REMINDER: Ontario’s next AODA (Accessibility for Ontarians with Disabilities Act) compliance report for businesses and non-profits with 20 or more employees is due on December 31, 2026