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New Measures to Address US Tariffs
On August 25, 2026, the federal government announced a major support package for Canadian businesses and workers affected by the latest round of tariffs imposed by the US, after recent bilateral trade negotiations broke down.
In total, $7.5 billion will be invested in various initiatives designed to mitigate the economic repercussions of these tariffs. A significant portion of this amount—$3.5 billion—is allocated to new measures directly targeting the labour market and job retention.
Main Measures For Employers And Workers
Creation of the Workforce Retention and Retraining Program
The government plans to implement a new program combining the Employment Insurance Work-Sharing Program and the Worker Retention Grant. The goal is to provide a streamlined, more accessible and more generous support mechanism for employers facing a temporary business slowdown.
For example, when an employer offers training activities during non-work days resulting from a work shortage, employees could receive up to 70% of their earnings rather than the 55% usually paid under Employment Insurance.
Employers may also have access to additional financial assistance to cover certain training expenses and administrative costs, up to $1,000 per participant.
Extension of Temporary Employment Insurance Measures
The federal government is also extending several temporary Employment Insurance measures already in effect:
- the waiver of the one-week waiting period before benefits are paid;
- the exemption allowing workers to receive benefits without first using up their separation payments, such as severance or vacation pay; and
- an additional 20 weeks of regular benefits for long-tenured workers.
Depending on the measure, the extensions will last anywhere from eight months to one year.
A New Measure For Certain Voluntary Departures
The government is also introducing a new temporary measure for workers who voluntarily left their jobs in recent months. Under certain conditions, these individuals will no longer be automatically excluded from access to Employment Insurance if they experience a job loss through no fault of their own.
Key Takeaways For Employers
Although there are still many details to be clarified, these announcements confirm that the federal government is prioritizing job retention and skills development over layoffs and terminations. Employers in sectors particularly vulnerable to the new US tariffs should closely monitor upcoming publications from Employment and Social Development Canada to determine if they are eligible for the new support programs and measures.
We are closely monitoring developments regarding these measures, and we invite you to contact your Fasken lawyer with any questions on whether your organization or employees are eligible for the measures described above.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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