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Evaluation of the Work-Sharing Program

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List of tables

List of figures

List of abbreviations
CEWS
Canada Emergency Wage Subsidy
CSB
Citizen Service Branch
ECC
Employer Contact Centre
EI
Employment Insurance
ESDC
Employment and Social Development Canada
POB
Program Operations Branch
SEB
Skills and Employment Branch

Executive summary

Work-Sharing is an employment retention program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. The goal is for all participating employees to return to normal working hours by the end of the term of the Work-Sharing agreement. The Program helps employers retain skilled employees and avoid the costly process of recruiting and training new employees when business returns to normal levels. It also helps employees maintain their skills and jobs while supplementing their wages with Employment Insurance (EI ) benefits for the hours they are not working due to the Work-Sharing agreement. While the Program has largely responded to temporary economic recessions, the Program has also been used on numerous occasions to assist employers affected by a disaster or state of emergency.

This evaluation builds upon the previous evaluation of the Program completed in 2016. As such, the evaluation approach seeks to provide evidence towards whether the Program is continuing to meet its stated objectives. It also provides evidence on whether improvements were made to the delivery and awareness of the Program since the 2016 evaluation. The primary scope of this evaluation was employers and employees who participated in a Work-Sharing agreement any time between 2013 and 2020, including the application process in place prior to the pandemic.

Key findings

Labour market need and awareness of the Program

Participation and usage of the Program

Impact of the Program

Delivery of the Program

Recommendations

Management response and action plan

Overall management response

The Skills and Employment Branch (SEB) and Program Operations Branch (POB) would like to thank those who conducted the evaluation of the Work-Sharing Program and acknowledge the contributions of all the key informants who participated in interviews.

Overall, the findings of the Work-Sharing evaluation are positive and demonstrate that there is a continued need for the program. The evaluation found that the program is achieving its expected outcomes, including preventing layoffs. For employers, the Program led to greater employee retention and saved costs from onboarding new employees. Additionally, firms which participated in the Program were less likely to close after the termination of their Work-Sharing agreement.

For employees, Program participation led to greater financial security, higher return-to-work rates, less reliance on Employment Insurance, and higher employment income. Both employers and employees reported positive impacts in employee/firm relations and had a positive experience with Program delivery. The evaluation also found that Program take-up is counter-cyclical to economic conditions, with applications increasing as the economy slows and decreasing during economic expansion. This is consistent with the findings of the previous Work-Sharing evaluation.

The evaluation identified 2 recommendations to 1) simplify the application process and 2) increase promotion. SEB and POB accept these recommendations and note that several related changes have been implemented since the end of the evaluation in 2020, and additional changes are planned or underway.

Recommendation 1

It is recommended the Program work towards simplifying the application process, including the recovery plan requirement.

Management response

SEB and POB agree with this recommendation and note that significant improvements to simplify the application process have been made since the end of the evaluation period in 2020. The evaluation reinforces that several interventions that were put in place during the COVID-19 pandemic helped streamline application and review processes, including via a simplification of the requirement to submit a recovery plan as part of the application process. These changes have already had an impact, as the number of inquiries for support related to the application process have decreased by 50% from 2021 to 2023. In addition to these recent changes, POB is currently undertaking a review of the Work-Sharing application process, which may lead to further simplifications. In tandem, SEB and POB will review how the Program's usage varied during the time when Temporary Special Measures were established in response to the COVID-19 pandemic and identify areas for efficiency gains.

Management action plan 1.1

Permanently integrate into the application form the simplification to the recovery plan requirement introduced in March 2020. The previous 4-page annex was replaced with a simplified question on the application form.

Planned completion date: June 2025

Action status: In progress

Accountable lead(s): Workforce Development and Youth Program Oversight, POB

Management action plan 1.2

Starting in March 2020, the application process was simplified and/or clarified through additional changes including:

Planned completion date: August 2024

Action status: Complete

Accountable lead(s): Workforce Development and Youth Program Oversight, POB

Management action plan 1.3

Analyze how the Program's usage varied during COVID-19 and identify areas for efficiency gains.

Planned completion date: March 2025

Action status: In progress

Accountable lead(s):

Management action plan 1.4

Assess the feasibility of developing a multi-feature online application that enables users to register for the program, apply for EI benefits, provide feedback, submit requests, and send reports.

Planned completion date: March 2025

Action status: In progress

Accountable lead(s):

Recommendation 2

It is recommended the Program enhance its promotion and awareness to increase program participation.

Management response

SEB and POB agree with this recommendation. To increase program participation, the Department is currently engaged in promoting and raising awareness of the Work-Sharing program through several strategies. The Department collaborates with regional and provincial stakeholders, conducts targeted sector-specific outreach, and conducts mobile presentations to effectively inform and support employers and employees. Departmental service delivery personnel are equipped with comprehensive program information and utilize multiple support channels, including an external general inbox operated by POB, the Employer Contact Centre (ECC), Citizen Service Branch (CSB), and EI Contact Centres. The website has been extensively updated to improve access and information. Regional staff and provincial/territorial governments are involved in sector-specific outreach, exemplified by presentations at various industry events such as the CPA conference and Atlantic Employer Association. Moving forward, the Program area will explore the possibility of additional promotional opportunities, including leveraging the EI Commissioners, Service Canada regional offices, and ECC connections and continuing to strengthen our outreach activities to increase program participation. This promotional work will need to be balanced against the ongoing program funding needs, to ensure the Department is positioned to deliver on increasing demand generated via promotion. The Program area also wants to highlight that the Program's counter-cyclical nature leads to greater awareness and participation during economic downturns. The evaluation demonstrated this, as 50% of the employers that participated in the Program for the first-time over the evaluation period did so during the economic downturn related to the COVID-19 pandemic.

Management action plan 2.1

The Program area implemented an extensive modernization of the Work-Sharing website to improve access and program information.

Planned completion date: June 2021

Action status: Complete

Accountable lead(s): Workforce Development and Youth Program Oversight, POB

Management action plan 2.2

The Program area will explore opportunities to enhance promotion and awareness by:

Planned completion date: March 2025

Action status: In progress

Led by: Workforce Development and Youth Program Oversight, POB

Supported by:

1. Introduction

This report presents the findings of the evaluation of the Work-Sharing program (also referred to as "the Program"). The Work-Sharing program is an employment retention program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. This evaluation builds on the previous evaluation completed in 2016, which covered the period from 2000 to 2013. The objectives of this evaluation are to assess the impact of the Program on employees and employers from 2013 to 2020, as well as on special measures introduced during this periodFootnote 1. Multiple lines of evidence were used, including surveys of participating employers and employees, administrative data, key informant interviews and a literature review.

2. Program description

2.1 Background

The Work-Sharing program was first introduced in 1977 as a pilot project through the Unemployment Insurance program, as today's Employment Insurance (EI) program was formerly termed. After being discontinued, it was re-introduced in 1981 during the economic recession. In 1985, the Program was made a permanent feature of the Unemployment Insurance program. It has been a component of the Unemployment Insurance and then the EI program ever since, with little fundamental change in its design or rules.

2.2 Objective of the Program

Work-Sharing is an employment retention program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. The program allows all participating employees to remain employed with a temporarily reduced schedule by 10% to 60% of their regular hours. The goal is for all participating employees to return to normal working hours by the end of the term of the Work-Sharing agreement. The Program helps employers retain skilled employees and avoid the costly process of recruiting and training new employees when business returns to normal levels. It also helps employees maintain their skills and jobs while supplementing their wages with EI benefits for the hours they are not working due to the Work-Sharing agreement. While the Program has largely responded to temporary economic recessions, the Program has also been used on numerous occasions to assist employers affected by a disaster or state of emergency.

The Work-Sharing program avoids layoffs by offering EI Part I income support to employees eligible for EI benefits who work a temporarily reduced work week while their employer recovers. A key feature of the Program is that earnings received for any week by claimants from Work-Sharing employment shall not be deducted from the Work-Sharing benefits payable to the claimants while they are under a Work-Sharing agreement. Moreover, the claimant's waiting period is deferred until other EI benefit types are payable. Furthermore, the payment of Work-Sharing benefits does not impact a worker's entitlement to regular EI benefits. A worker's benefit period is extended by the number of weeks that he or she is working under a Work-Sharing agreement. If recovery is not achieved and workers are laid off during or at the end of the Work-Sharing agreement, they are still eligible for EI regular or special benefits based on the number of hours of insurable employment accumulated prior to the commencement of the Work-Sharing agreement.

To illustrate how the Program works, consider a firm with 100 workers sharing the same work responsibilities, that is considering a temporary layoff of 20 of these workers. If the 20 workers were laid off, they would collect regular EI benefits during their unemployment at a rate of 55% of their insurable earnings. Work-Sharing allows all 100 of the firm's employees to share the costs of the downturn. Rather than laying off the 20 workers, the firm could reduce the work week by 20% (for example , work a 4-day week) for all 100 workers. All of the workers would collect Work-Sharing benefits for 1 day per week (at the same rate of 55% of their insurable earnings).

2.3 Eligibility

In order for employers to be eligible to the Program, they must meet the following criteria:

The duration of a Work-Sharing agreement is a minimum of 6 weeks and can last up to 26 weeks. An employer may request an extension up to 12 additional weeks- to a maximum agreement duration of 38 weeks. Employers must demonstrate that, in the absence of the extension, they will continue to experience a reduction in business activity and will not be able to return to normal working hours within the original time frame. Therefore, they would risk laying off 1 or more employees. A Work-Sharing agreement may be terminated if the average loss of hours falls below 10% or exceeds the 60% limit.Footnote 2 Following every Work-Sharing agreement, employers are required to serve a mandatory cooling-off period before they can participate in another agreement. The cooling-off period is equal to the number of weeks they participated in the Program.

For individual employees to qualify for benefits under the Program, they must meet the following criteria:

Unlike EI regular benefits, participants are not required to serve a waiting period prior to drawing benefitsFootnote 4. However, if workers are laid off after their participation in the Program, they remain eligible for EI regular benefits if all entitlement conditions are met. In such cases, employees must then serve the waiting period before collecting EI benefits. The participating employees' weeks of entitlement to EI benefits are not affected by their prior use of the Program.

2.4 Delivery

The application process begins with the employer completing a Work-Sharing application. The employer must submit the completed application by email to their respective regional Work-Sharing Unit, a minimum of 30 business days prior to the requested start date.Footnote 5 Service Canada officers can help employers in completing their applications to ensure they meet the eligibility criteria to participate in the Program. They review the application, analyze its cost effectiveness, and assess social/community impact to conclude if:

Once approved, a legal document, or "Work-Sharing Agreement", is developed by Service Canada. The document becomes legally binding once it has been signed by the authorized employer representative, employee representatives and Service Canada representatives.

After a Work-Sharing agreement has been implemented, Service Canada staff will ensure the agreements are being carried out in compliance with regulations. Upon completion of the Work-Sharing agreement, a Service Canada officer completes a close-out report summarizing the key outcomes.

2.5 Special measures

The Work-Sharing program is also designed to be responsive to the needs of the economy. When appropriate, special measures have been made available in response to emerging labour market challenges and to assist local employers affected by natural disasters or other emergencies. Typically, these special measures have involved:

For example, in March 2020, special measures were announced to support employers and workers affected by the economic fallout resulting from COVID-19. These measures extended the duration of Work-Sharing agreements by an additional 38 weeks, for a total of 76 weeks. The mandatory cooling-off period was also waived so that employers with a recently expired agreement could immediately apply for a new one.

Refer to Appendix B for the special measures implemented between 2013 and 2020.

3. Evaluation approach

This evaluation builds upon the previous evaluation of the Program completed in 2016.Footnote 6 As such, the evaluation approach seeks to provide evidence towards whether the Program is continuing to meet its stated objectives. It also provides evidence on whether improvements were made to the delivery and awareness of the Program since the 2016 evaluation. The primary scope of this evaluation was employers and employees who participated in a Work-Sharing agreement any time between 2013 and 2020.

The evaluation approach and evaluation questions were developed in consultation with the Skills and Employment Branch and Service Canada. The evaluation questions inform labour market needs, participation, usage, and the impact of the Program on employment outcomes of participating employees and employers. Multiple lines of evidence were used to provide timely and relevant information to support ongoing and future policy work:

Refer to Appendix C for the evaluation matrix, and Appendix D for more information about these lines of evidence.

Main limitations associated with this Evaluation

  1. Limited information on COVID-19 special measures: Most recent available tax records at the time of this evaluation were for the 2020 tax year (available in fall 2022). As a result, post-agreement information was not available for those who participated in a Work-Sharing agreement during the pandemic.
  2. Small sample sizes for special measures introduced prior to 2020: Many of these special measures were designed for specific regions or industry segments, which led to few Work-Sharing claims associated with these special measures. For instance, in 2013, despite the introduction of special measures due to flooding in Alberta and train derailment, explosion and fire in Lac-Mégantic (Quebec), only 217 and 1,100 Work-Sharing claims were established, respectively. Therefore, this report focused on assessing the effect of the response to the commodity price downturn and other special measures were excluded due to small sample sizes.
  3. Lower response rate and recency bias for surveys and key informant interviews: The surveys focused on those who had more recently participated in the Work-Sharing program to mitigate recall bias. However, there could have been recency bias due to experiences of employers and employees with Work-Sharing during the COVID-19 pandemic. Response rate for the survey respondents and certain key informants was low. Nevertheless, findings presented in the evaluation report have been triangulated with other lines of evidence.

Subsequent chapters (4 to 7) of the report present key findings from the evaluation on the:

4. Labour market need and awareness of the Program

4.1 Labour market need of the Program

Key finding: Program was perceived to be meeting the needs of surveyed employers and employees by retaining workers and preventing layoffs. Additionally, administrative data analysis showed that the Program helped employers during economic downturns.

When facing a decline in normal level of business activity, firms may be more likely to lay off workers rather than engage in other workplace practices such as adjusting their employees' working schedules. Work-sharing aims to help mitigate the risk of layoffs and to help employers retain workers by leveraging benefits under the EI program.

Most surveyed employers reported that the Program was effective from a "good to full extent" in:

Moreover, approximately 84% of surveyed employers indicated their likelihood of participating in the Program again from a "good to full extent" if their business would be facing employee layoffs in the future.

In addition, administrative data analysis showed that the use of the Program was generally counter-cyclical to economic conditions. Most of employers participated in the Program for the first-time during the 2015 to 2016 commodity price downturn (22%) and during the COVID-19 pandemic (50%). The number of new Work-Sharing claims and benefit amounts received increased significantly during these 2 time periods. The repeat use of the Program remained low, around 8% between 2013 and 2020. Similarly, it was found that most of the surveyed employers (60%) participated in the Program only once, while 28% participated twice, and only 7% participated 3 or more times between 2013 and 2020. Around half (51%) of surveyed employers who applied only once, participated in the Program during the commodity price downturn.

Further, the Program design helped employees and employers adjust to economic recessions. The Program parameters, especially the agreement duration can be extended, if the economy slows down for a longer period. For example, employer survey results showed that approximately 49% of Work-Sharing agreements were extended due to special measures. Among these extensions, 44% were related to the COVID-19 pandemic and 39% to a downturn in commodity prices. Notably, around 70% of extended agreements were extended because the initial period was deemed insufficient for business recovery.

Employee survey findings also underscored a positive perception among respondents regarding their attachment/loyalty to their employers and their perception about their employers. Around one-third (36%) of respondents indicated that the Program strengthened their attachment/loyalty to their employers from "a good to full extent". Close to one-third (31%) of respondents indicated that the Program strengthened their attachment to their employers from "a little to some extent." Half of the surveyed employees (51%) indicated that they felt their employer had their best interest in mind by participating in the Work-Sharing Program from "a good to full extent." Another one-third (32%) indicated they felt their employer had their best interest from a "little to some extent." Further, three-quarters (75%) of the surveyed employees indicated their intention to participate in the Program if offered again in the future. About 75% of them said they would recommend the Program to other employees (refer to Figure 1).

Figure 1: Effectiveness of the Work-Sharing Program in enhancing employees' attachment and positive perception of their employer
Chart of Effectiveness of the Work-Sharing Program: description follows
  • Source: Employee Survey
Text description: Figure 1
Level of effectiveness and positive perception Attachment with employer Employer had employees' best interest
To a full extent 14.2% 20.8%
To a good extent 21.8% 29.7%
To some extent 19.9% 17.4%
To a little extent 10.8% 15.4%
Not at all 23.8% 8.8%
Don't know/prefer not to say 9.6% 7.8%

Experts interviewed had mixed views on the role of the Program in the labour market. However, more were leaning towards a program that should be used for firms that have a strong indication for recovery and with strong employment relationships.

Moreover, review of literature showed that the main goal of similar Work-Sharing programs offered internationally was to reduce potential layoffs and assist employers in retaining their skilled workers who would be costly to replace.Footnote 7 Such programs, grouped in the broad category of Short-Time Work programs, were found to be significantly diverse in their design and usage.Footnote 8 This was partly due to substantial cross-country variation in employment protection legislations affecting the relationships employers and employees have with such programs.Footnote 9

Finally, it was found that the presence of other developed programs or lack thereof, affects the design and take-up of Short-Time Work programs. For example, during the COVID-19 pandemic, Canada rolled out a suite of temporary measures, including the "Canada Emergency Wage Subsidy." The Wage Subsidy provided up to 75% of eligible remuneration, paid by an eligible entity (eligible employer) that qualified, to each eligible employeeFootnote 10.

This may have potentially lowered how many employers would have otherwise participated in the Work-Sharing program in the absence of the Canada Emergency Wage Subsidy. On the other hand, in some European countries ( for example, France, Germany, Italy, and Switzerland) employers routinely relied on their existing Short-Time Work programs during every market downturn.

The Canada Emergency Wage Subsidy (CEWS)

CEWS was introduced on April 11, 2020, to provide financial support to employers during the COVID-19 pandemic. It was available from March 15, 2020, to October 23, 2021, initially covering wages up to 75% with a cap of $847 per week per employee.

This subsidy was reduced to 65% in September 2020, with subsequent declines until June 2021. This program was originally 12 weeks in duration, but was later extended up to 80 weeks, ending in October 2021. To qualify, the employer had to have experienced a drop of at least 15% of their qualifying revenue in March 2020 and 30% for the following months of April, May and June, when compared to their qualifying revenue for the same period in 2019. As of November 22, 2020, CEWS had approved over 350,000 unique claims and paid out over $50 billion in subsidies. At the peak, in May and June 2020, just over 3.9 million workers were being supported by the CEWS program. In comparison, based on internal data over 2020, only 180 million dollars in benefits were paid out for 78,000 Work-Sharing claims.

Similar to the Work-Sharing Program, the CEWS aimed to help employers retain employees despite reduced revenues, offering direct wage subsidies. In contrast, the Work-Sharing program, designed to prevent layoffs by reducing employees' hours, provided Employment Insurance (EI) benefits to supplement the reduced wages. While CEWS offered direct financial aid to employers, Work-Sharing focused on employees, requiring a reduction in work hours and providing EI benefits instead.

Sweetman, A. and Tobin, S. (2020) credit CEWS to being similar to the WS program, but providing faster access to funds, being less administratively burdensome and usually more generous. However, the study by Smart et al. (2023) estimated that the average fiscal cost per job saved by CEWS was nearly $200,000 per year and concluded that the subsidy did little to preserve job matches.

4.2 Program participation

Key Finding: Program participation was low. Key factors that hindered Program participation included difficulty assessing program eligibility, the application process, and the requirement of a recovery plan. Key factors that facilitated employers' participation included their relationship with employees, previous participation in the Program, and specific industry needs.

Over the period between 2013 and 2020, the average annual participation in the Program was about 19,000 employees, equivalent to approximately 1 employee per 1,000 of the Canadian Labour force. The average amount of Work Sharing benefits paid was about $44 million per year, equivalent to about $2,200 per 1,000 of the Canadian labour force. The average annual participation in the comparable programs in the 4 largest European countries ( Germany, the United Kingdom, France, and Italy), was about 2% of the labour force.

Administrative data analysis showed employees with certain socio-demographic characteristics were more likely to participate in the ProgramFootnote 11:

However, the likelihood of participating in the Program decreased with age.

Similarly, most surveyed employees were primarily from the manufacturing industry (66%) with over 10 years of work experience (37%). These respondents were predominantly full-time (97%) and not unionized (85%). Around 84% of employees in the affected units were full-time employees prior to the agreement.

Most surveyed employers were also primarily from the manufacturing industry (60%) with over 20 years of business operation (80%). Half (50%) of surveyed employers had 80% or more of their employees participating in the Work-Sharing Program. Additionally, surveyed employers predominantly represented for-profit firms (95%), and most firms (85%) had fewer than 100 employees. Of note, contrary to the administrative data analysis, the highest proportion of surveyed employers and employees were in Quebec (37% and 23%, respectively).

Factors affecting employees' participation in the Program are presented in Table 1. The majority of surveyed employers considered their relationship with their employees as the primary facilitating factor to their participation in the Program. Additionally, nearly half of respondents cited their previous experience with participation in the Program, while slightly over one-third attributed their participation to specific industry needs.

Table 1: Factors that facilitated employers' participation in the Program
Facilitating factors* Responses
Your relationship with your employees 58%
Previous experience participating in the Program 49%
Specific industry needs 35%
Your experience with Service Canada 20%
A larger number of employees 9%
Specific region needs 9%
Presence of labour union 2%
Don't know/Prefer not to say 8%

On the other hand, key informants interviewed identified factors that hindered participation in the Program. Interviewed employers (n=8) and employer associations (n=2) had difficulty assessing program eligibility, and they found the application process, especially the requirement of a recovery plan, burdensome (further discussed in Chapter 7). Interviewed employers, associations, and internal officers also suggested that reducing the administrative burden of the application and making employers and employees' eligibility to the Program more lenient, could improve Program participation. This could include removing or simplifying the recovery plan requirement, auto-enrollment of employees, and simplifying eligibility rules.

Further, interviewed employers and employer associations indicated that barriers to participation differ by firm size. For example, small firms may face more barriers to participation due to the burdensome application requirements. Larger firms may face more barriers to participation due to heavy reporting requirements of working hour changes and high turnover during their participation in the Program. Finally, interviewed experts suggested that a higher replacement rate and higher insurable earnings could facilitate program participation in Canada as it did in European countries.

As mentioned in Chapter 4.1, participation in the Program could also depend on the availability of alternate special programs during economic recessions. In comparison with countries with Short-Time Work programs, Canadian participation in the Work-Sharing Program remained very low. Across participating countries, the average take-up rate of comparable programs was 21% in May 2020 at the height of the COVID-19 pandemic. Canada's take-up rate was 0.2% in May 2020.Footnote 12 Similarly, in the United States, applications to the state-level Short-Time Work Programs covered only 0.1% of the labour force at the height of the pandemic. This was likely because the United States primarily provided support through their Unemployment Insurance program.Footnote 13

4.3 Program awareness

Key finding: Program awareness was found to be low among surveyed and/or interviewed employers, employer associations and employees.

Less than half of surveyed employers (47%) viewed their prior awareness of the Program as ‘good or to a full extent'. About 21% employers had ‘no or little' prior awareness of the program. These same proportions for surveyed employees were 61% and 14%, respectively (refer to Figure 2).Footnote 14

Figure 2: Employers and employees' prior awareness of the Program
Chart of Employers and employees' prior awareness of the Program: description follows
  • Source: Work-Sharing employer survey, N= 251; Work-Sharing employee survey, N= 408
Text description: Figure 2
Prior awareness Employers Employees
Not at all 4% 4%
To a little extent 17% 10%
To some extent 12% 22%
To a good extent 20% 38%
To a full extent 27% 23%
Don't know/Prefer not to say 20% 14%

Further, around half (51%) of surveyed employers had "no or little" prior familiarity with the Program's criteria, while about one-third viewed their familiarity as ‘good or to a full-extent'.

Surveyed employers and employees were also asked about how they learned about the Program (refer to Table 2). More than half (54%) of surveyed employers learned about the Program through their previous participation. More than three-quarters (76%) of surveyed employees learned about the Program through their employers.

Table 2: Sources of information about the Program
Sources of information Employers Employees
Previous participation in the Work-Sharing program 54% 12%
Research on the Government of Canada website 15% 2%
Government of Canada (ESDC) officials 8% 1%
Other organizations / colleagues 7% 3%
Employer(s)/ Employee(s) 4% 76%
Higher management or owner / Employees' representative 3% 5%
Don't know/prefer not to say 9% 3%

One of the union representatives said they did not know about the Program until they were asked to be a key informant interviewee. This, in combination with the small response rate of the unions invited to participate in the key informant interviews, may indicate that many organizations were not very familiar with the Program.

Similarly, awareness of the Program among interviewed employers and employer associations was also found to be low. Most employer associations (n=3) stated very few or none of their members were aware of the Program. One employer association provided results of a survey of their members (n=7,335) with findings showing 64% of their members were unaware of the Program.Footnote 15

Four-fifths (81%) of the surveyed employees were satisfied with the information provided to them about the Program before their participation and almost half (46%) of respondents indicated that they were given the opportunity to express their views about the idea of participating in the Work-Sharing Program from a "good to a full extent." One-third (33%) reported having ‘no or little' opportunities to express their views. Half of survey respondents (50%) indicated that they were aware that their EI entitlement will not be affected due to their participation in the Program.

Finally, more than half of internal program officers mentioned that more promotion of the Program is needed. To raise awareness about the Program, key informants suggested that the Government of Canada could undertake activities such as:

5. Participation and usage of the Program

5.1 The take-up of the Program

Key finding: Program take-up was low and counter-cyclical.

Figure 3 shows the average annual take-up of the Program was about 19,000 claims. Further, the average benefits paid amounted to $43.7 million annually between 2013 and 2020. To put this in perspective, there were about 1.5 claims per 1,000 employed persons between 2013 and 2020. Nonetheless, these averages were significantly skewed by the Program usage in 2020, during the first year of COVID-19. For instance, there were over 78,000 claims in 2020 compared to as low as approximately 3,000 claims in 2018. Similarly, the total benefit amount received by Work-Sharing participants was approximately $180 million in 2020 compared to $6.5 million in 2018. The participation rate increased to 4.3 claims per 1,000 employed persons in 2020 from 0.2 claims per 1,000 employed persons in 2018. The Work-Sharing benefit amount paid followed a similar trend with over $10 per employed person in 2020 and $0.40 per employed person in 2018.

Figure 3: Work-Sharing claims and benefit amount, 2013 to 2020
Chart of Work-Sharing claims and benefit amount, 2013 to 2020: description follows
Text description: Figure 3
Year Claims Benefit amount ($ millions)
2013 12,925 21.0
2014 8,978 18.6
2015 18,648 52.8
2016 14,706 37.1
2017 5,315 8.3
2018 3,185 6.5
2019 9,746 25.3
2020 78,365 180.0

Excluding 2020, the number of claims and benefit amounts were "to some extent" constant across the study period. However, there was relatively higher participation in 2015 and 2016 during the commodity crisis, and it was lower during periods of economic recovery. This finding suggests that the use of Work-Sharing benefits is generally counter-cyclical to economic conditions. This is consistent with the findings of the previous Work-Sharing evaluation.Footnote 16

Firms' administrative data also provided evidence of the counter-cyclicality of the Program. During years with low unemployment, there was lower participation in the Program. As shown in Figure 4, the unemployment rate was lower in the 2017 to 2019 period than in the 2013 to 2016 period. Consequently, the participation in the Program was lower too. In contrast, during the commodity crisis (2015 to 2016) the unemployment rate was higher and so were the number of firms participating in the Program. Supporting the evidence that the Work-Sharing Program is counter-cyclical. Further, in the wake of the COVID-19 pandemic, the national unemployment rate rose to 9.6% and number of firms participating in the program rose to 3,616 in 2020.

Figure 4: Yearly number of Work-Sharing firms and national unemployment rate, 2013 to 2020
Chart of Yearly number of Work-Sharing firms: description follows
Text description: Figure 4
Year Number of firms Unemployment rate
2013 685 7.1%
2014 445 7.0%
2015 760 6.9%
2016 978 7.0%
2017 259 6.4%
2018 144 5.8%
2019 271 5.7%
2020 3,616 9.7%

5.2 Socio-economic profile of participating employees

EI administrative data analysis showed that employees who participated in the Work-Sharing Program between 2013 and 2019 were:

They also reported higher levels of average employment income ($45,934) compared to EI regular claimants ($33,574). In general, the characteristics of the Work-Sharing claimants in 2020, when Work-Sharing participation was at its highest, exhibited a comparable profile to Work-Sharing claimants between 2013 and 2019. There were slight variations in magnitude and some exceptions. Notably, in contrast to claimants from 2013 to 2019, women's participation was at its highest point (36% compared to 26%) and a greater proportion of 2020 claimants were residing in Ontario (37% compared to 27%). Refer to Table 1, Appendix E.

Evidence from the employee survey also showed that most survey respondents were not members of a visible minority group (74%) and were born in Canada (57%). The majority (58%) of those who were born outside of Canada had been living in Canada for over 15 years, while 40% of them immigrated to Canada around 5 to 14 years ago. Approximately one-quarter of respondents had a bachelor's degree or higher education (26%), with similar proportions having college, CEGEP or its equivalent (23%), and high school or less or its equivalent (22%). Around 2% of respondents identified as Indigenous (First Nation, Metis, or Inuit) and another 2% identified as a person with a disability. Further, employee survey respondents had 10 years of work experience (37%), were working predominantly full-time (97%) and were not unionized (85%). Refer to Table 2, Appendix E.

The likelihood of participating in the Work-Sharing Program compared to claiming EI regular benefitsFootnote 17 is presented in Table 3. The following characteristics were found to increase the likelihood of claiming Work-Sharing benefits compared to claiming EI regular benefits:

For example, the probability of claiming Work-Sharing benefits decreases with age. Specially, while keeping all other factors constant, the probability of claiming Work-Sharing benefits were estimated to decrease by 0.04 percentage points with each additional year of age.

In addition, claimants exhibited a greater likelihood of claiming Work-Sharing benefits compared to EI regular benefits during economic downturns and a lower likelihood during periods of economic recovery. For example, during the commodity downturn of 2015 there was a 0.4 percentage points increase in the likelihood of claiming Work-Sharing benefits, and during the COVID-19 pandemic in 2020, this likelihood increased by 3.2 percentage points compared to the baseline year of 2013 (not shown in Table 3).

Table 3: Probability (percentage points) of Work-Sharing take-up by claimants' characteristics compared to EI regular claimants, 2013 to 20201
Characteristics 2013 to 2020 2013 to 2019 2020
Gender (Male) -0.7* -0.6 -0.6
Age -0.04* -0.02* -0.07*
Region (Atlantic) N/A N/A N/A
Quebec 1.4* 2.1* 1.1
Ontario 1.0 1.0* 0.1
Prairies 5.5* 6.3* 3.8
British Columbia 1.9* 1.1* 2.3
Industry (Primary) N/A N/A N/A
Construction -0.7* -0.6 -1.2
Manufacturing 18.5* 16.5* 20.5*
Services 1.3* 0.5 2.4*
Occupation (Management) N/A N/A N/A
Business/Finance/Admin 2.8* 2.0* 4.8*
Sciences 6.5* 4.8* 10.5*
Sales/Services -1.4* -0.5* -3.2*
Trade/Transport 0.3 1.1* 1.2*
Manufact/Utilities 2.2* 3.8* -0.4
Marital status (Married/Common-Law) N/A N/A N/A
Widow/Divorced/Separated -1.2* -0.9* -1.6*
Single -1.6* -1.2* -2.4*
Long-tenured 3.5* 3.2* 4.2*
Observations 1,212,206 687,957 524,249

5.2.1 Work-Sharing benefit amounts

Overall, it was found that certain groups of individuals received higher average benefit amounts as compared to their counterparts (refer to Table 4):

Table 4: Work-Sharing average benefit amount, benefit weeks, and weekly benefit amount by claimants' characteristics, 2013 to 2020
Characteristics Average benefit amount Average benefit weeks Average weekly benefit amount
Gender: Male $2,529 18.0 $140
Gender: Female $2,616 20.1 $130
Age: 25 and under $2,098 16.2 $129
Age: 26 -54 $2,496 18.3 $136
Age: 55 and over $2,878 20.5 $140
Region: Atlantic $2,476 19.4 $128
Region: Quebec $2,145 16.5 $130
Region: Ontario $2,599 19.1 $136
Region: Prairies $2,860 20.0 $143
Region: British Columbia $2,523 18.2 $139
Industry: Primary $3,152 19.6 $161
Industry: Construction $3,014 19.4 $155
Industry: Manufacturing $2,429 17.8 $137
Industry: Services $2,719 20.1 $135
Occupation: Management $2,850 20.7 $138
Occupation: Business/Finance/Admin $2,549 19.8 $129
Occupation: Sciences $2,545 18.4 $138
Occupation: Sales/Services $2,741 21.1 $130
Occupation: Trade/Transport $2,724 18.1 $150
Occupation: Manufacturing/Utilities $2,316 17.5 $132
Marital status: Married/Common-Law $2,586 18.8 $138
Marital status: Widowed/Divorced/Separated $2,624 19.2 $137
Marital status: Single $2,449 18.2 $135
Canada $2,556 18.7 $137

Average benefit amounts increased with age likely due to relatively higher employment incomes of older employees. Overall (Canada) claiming reported a weekly average benefit amount of $137 over a benefit period of 18.7 weeks.

5.3 Socio-economic profile of participating employers

Overall, the profile of participating firms remained relatively the same during the pandemic (2020) and between 2013 and 2019. As shown in Table 5, the profile of firms participating in Work-Sharing differs from the profile of Canadian firms. Overall, participating firms had relatively more employees, were more likely to operate in the manufacturing industry and less likely to be in the Atlantic provinces.

Among firms participating in Work-Sharing, 34% had fewer than 20 employees and 43% had between 20 and 99 employees. In contrast, 93% of Canadian firms have fewer than 20 employees and about 6.5% have between 20 and 99 employees.

Between 2013 and 2019, firms in the manufacturing industry were the largest user of the Work-Sharing Program, representing 57% of participating firms. This contrasts with the distribution of Canadian firms at-large, where 78% of firms operated in the service industry, and 4% in the manufacturing industry. However, in 2020, the profile of Work-Sharing firms by industry aligned more closely with the profile of firms across the country, as firms operating in the services industry accounted for 58% of participating firms.

Among participating firms, between 2013 and 2020, most firms were in the Prairies (33%) and in Ontario (31%). On the other hand, while about 22% of Canadian firms were in the Atlantic provinces, 4% of participating firms were located in the same provinces. During the commodity crisis, the proportion of firms in the Prairies increased from 6% in 2014 to 55% in 2015 and 61% in 2016 (not shown in Table 5). While the proportion of participating firms in the Prairies decreased substantially after the commodity crisis, it did not fall back to the level observed prior to the crisis (around 7%). It hovered at around 30% in 2019 and 2020. This may suggest that the usage of the Program during the commodity crisis increased its awareness in the region.

Finally, findings of the employer survey showed that the majority of the participating firms were for-profit (95%) and had been operating for over 20 years (80%). The Program participation was higher among businesses experiencing temporary reductions in work hours of 10% to 30% compared to 31% and over.

Table 5: Characteristics of firms with a Work-Sharing agreement, 2013 to 2020
Characteristics Work-Sharing firms (2013 to 2020) Work-Sharing firms (2013 to 2019) Work-Sharing firms (2020) Reference: Firms in Canada* (2013 to 2020)
Firm size: Less than 20 34% 34% 34% 93%
Firm size: 20 to 99 43% 44% 41% 6.5%
Firm size: 100 to 499 17% 17% 17% 0.5%
Firm size: 500 and over 6% 5% 8% 0.1%
Industry: Manufacturing 41% 57% 28% 4%
Industry: Services 47% 34% 58% 78%
Industry: OtherFootnote 18 12% 10% 14% 18%
Region: Atlantic Provinces 3% 3% 4% 22%
Region: Quebec 21% 27% 18% 19%
Region: Ontario 31% 31% 34% 37%
Region: Prairies 33% 31% 29% 6%
Region: British Columbia 11% 8% 14% 16%
Region: Territories and Outside Canada 1% - 1% 0.3%
Total number of firms 7,158 685 3,616 ~1.2 million

5.3.1 Employers usage pattern of the Program

The utilization rate measures a firm's usage of the Work-Sharing Program. It shows their employees' share of hours on Work-Sharing as a proportion of their regular working hours (refer to Table 6). Overall, the utilization rate remained at around 17% between 2013 and 2020. It was highest at 18% in 2015 and lowest at 16% in 2019. The average agreement length in a given year was around 30 weeks. In the wake of the commodity downturn the average agreement length increased to about 38 to 40 weeks in 2015 and 2016. Similarly, in the wake of COVID-19, agreement length increases to 73 weeks in 2020. In both instances, the observed increased in agreement length stems from the introduction of special measures. Additionally, the proportion of firms with multiple agreements remained low, around 1% to 2%, throughout the years. The exception was an increase to 3.7% in 2020, likely due to an increase in the number of larger firms with over 500 employees.

Table 6: Average utilization rate, agreement length and firms with multiple agreements, 2013 to 2020
Usage characteristic Total 2013 2014 2015 2016 2017 2018 2019 2020
Utilization rate (%) 17 17 17 18 17 16 17 16 17
Agreement length (weeks) 54.2 29.3 29.2 38.0 40.2 30.5 31.1 40.4 72.8
Firms with multiple agreements (%) 3 2 3 2 3 1 1.4 1 4
Total number of firms 7,158 685 445 760 978 259 144 271 3,616

Table 7 presents characteristics on firms that made a repeated use of the Program within 1 and 4 years of the original agreement, excluding 2020 data. Between 2013 and 2019, 10% of firms re-used the program within 1 year, and 23% within 4 years. In terms of firm size, smaller firms had lower rates of repeat usage after 1 and 4 years, while larger firms showed higher rates of repeat usage, suggesting a correlation between firm size and repeat participation.

Additionally, the rate of repeat usage varied by province and industry. The Prairies had the highest repeat rates, while the Atlantic Provinces had the lowest. Manufacturing firms exhibited higher repeat rates compared to services industry firms, both after 1 and 4 years. Furthermore, firms with higher average employment income demonstrated higher repeat rates after 1 and 4 years, indicating a positive correlation between income level and repeat participation.

Table 7: Characteristics of the firms that made a repeated use of the Program 1 year (2013 to 2019) and 4 years after an agreement, 2013 to 2016
Characteristics Percent of firms that made a repeat use of the program after 1 year Percent of firms that made a repeat use of the program after 4 years
Firm size: Less than 20 7% 18%
Firm size: 20 to 99 11% 25%
Firm size: 100 to 499 12% 26%
Firm size: 500 and over 17% 28%
Region: Atlantic Provinces 4% 18%
Region: Quebec 7% 17%
Region: Ontario 10% 23%
Region: Prairies 13% 28%
Region: British Columbia 9% 17%
Region: Other 25% 27%
Industry: Manufacturing 12% 28%
Industry: Services 8% 18%
Industry: Other 7% 18%
Employment income (2013 dollars): less than $25,000 7% 16%
Employment income (2013 dollars): between $25,000 and $39,999 9% 23%
Employment income (2013 dollars): between $40,000 and $54,999 12% 26%
Employment income (2013 dollars): $55,000 and over 16% 27%
Total firms 3,500 2,838

5.4 Special measures

Key finding: Special measures for the commodity prices downturn had no noticeable impact on the duration of benefits, hours worked, or the benefit amount paid. After the introduction of the measure, both benefit weeks and the benefit amount declined, while hours worked increased.

Between 2013 and 2020, the Work-Sharing Program introduced 7 special measures aimed at providing targeted support to businesses facing significant labour market disturbances at the national, regional, or industry level (refer to Appendix A for more details). As mentioned in Chapter 3, this report focused on assessing the effect of the response to the commodity price downturn due to small number of claims for the other special measures. In addition, the information collected from key informants were limited.

5.4.1 Commodity prices downturn

In the wake of the commodity (Oil and Gas) prices downturn, the Government of Canada announced special measures in Budget 2016. Among those, the duration of Work-Sharing benefits was extended by an additional 38 weeks, up to a maximum of 76 weeks for employers in the regions affected by the downturn in the commodities sectorFootnote 19. Employers taking advantage of the special measures had to first enter into an initial 26-week agreement and apply for the 12-week extension, before applying for the additional 38-week extension.

To understand the effects of the extension on the duration of Work-Sharing benefits in terms of benefit weeks paid, hours worked, and benefit amount paid, a comparison was drawn between the commodity downturn regions and other regions. The commodity downturn started in early 2014 and lasted for about 2 years, until the end of 2016. Consistent with previous analysis, duration of the Work-Sharing benefits, hours worked, and amount paid followed counter-cyclical patterns. The benefit weeks and the benefit amount increased, while hours worked decreased before the on-set of the commodity downturn. However, this special measure appeared to have had no noticeable impact on the duration of benefits, hours worked, or the benefit amount paid. After the introduction of the measure, both benefit weeks and the benefit amount declined, while hours worked increased (refer to Figure 5. The 2 vertical red lines indicate the start (April 1, 2016) and the end (March 31, 2017) date of the special measure).

Special measures announced in Budget 2016 for the regions experienced the downturn in the commodity prices

This outcome might be attributed to the retroactive nature of the measure , that is claimants with open claims could continue to receive Work-Sharing benefits. On the other hand, labour market conditions in these regions may have already been in the process of recovery following the commodity price downturn. Therefore, there was less need for the renewal of existing Work-Sharing agreements or entering into new ones.

Figure 5: Comparison of Work-Sharing benefit duration, hours worked and benefit amount in commodity downturn and other regions, 2013 to 2019
Chart of Comparison of Work-Sharing benefit duration: description follows
Text description: Figure 5
Benefit weeks
Year Month Other regions Downturn regions
2013 January 13.28531 14.82353
2013 February 14.63035 13.29825
2013 March 15.24016 7.090909
2013 April 13.51362 8.920455
2013 May 14.18129 4.851852
2013 June 16.3196 2.190225
2013 July 16.18527 17.8172
2013 August 19.11751 13.12162
2013 September 16.94698 12.9
2013 October 18.76191 16.58824
2013 November 15.87889 18.5
2013 December 14.3939 14.60177
2014 January 15.05569 15.73373
2014 February 14.98551 13.5
2014 March 15.44542 9.8
2014 April 11.96505 11.14815
2014 May 12.7319 14.2
2014 June 15.25037 13.92424
2014 July 15.18328 23.85714
2014 August 19.0557 15.45
2014 September 18.08922 22.83871
2014 October 18.03627 18.20455
2014 November 15.16636 19.97426
2014 December 13.33237 21.84615
2015 January 13.73662 21.44776
2015 February 11.0829 20
2015 March 13.90489 28.42979
2015 April 14.97809 21.97981
2015 May 13.80292 20.30748
2015 June 14.17816 26.38235
2015 July 18.32178 26.10284
2015 August 16.03773 26.69919
2015 September 23.97462 27.82155
2015 October 15.64625 27.79739
2015 November 17.02468 26.41648
2015 December 19.94525 24.35094
2016 January 19.07416 24.69079
2016 February 13.76304 23.8346
2016 March 18.94818 28.58359
2016 April 12.64769 21.9548
2016 May 20.81724 23.96614
2016 June 19.64583 22.58178
2016 July 15.72107 16.91308
2016 August 11.7215 17.44373
2016 September 11.4475 13.93348
2016 October 16.68495 16.94406
2016 November 18.44444 13.81761
2016 December 15.76227 15.4
2017 January 11.039 10.95094
2017 February 11.56958 12.78212
2017 March 13.93694 14.89655
2017 April 12.1123 16.74603
2017 May 15.65672 15.51563
2017 June 12.18616 18.0274
2017 July 14.77444 16.06579
2017 August 13.62988 9.4
2017 September 9.462687 25.46667
2017 October 7.878151 11.6
2017 November 14.0075 11.2
2017 December 9.258064 18.25
2018 January 11.59036 15.88571
2018 February 17.09489 14.5
2018 March 13.00712 19.3913
2018 April 8.130682 6.541667
2018 May 16.02839 23.61468
2018 June 14.29952 15.46774
2018 July 13.40891 20.9375
2018 August 15.45249 31.1405
2018 September 20.5431 19.63043
2018 October 18.96386 14.88119
2018 November 15.66225 9.5
2018 December 17.28196 18.23288
2019 January 20.34628 20.3913
2019 February 11.67989 42.24468
2019 March 21.80257 10.30935
Share of hours worked
Year Month Other regions Downturn regions
2013 January 0.765601 0.717043
2013 February 0.759367 0.78762
2013 March 0.725659 0.794339
2013 April 0.778578 0.78315
2013 May 0.744802 0.795705
2013 June 0.751632 0.480635
2013 July 0.770324 0.769152
2013 August 0.756285 0.746977
2013 September 0.722892 0.76488
2013 October 0.701548 0.65801
2013 November 0.698082 0.742105
2013 December 0.737878 0.646381
2014 January 0.766869 0.708721
2014 February 0.725602 0.725001
2014 March 0.743644 0.770147
2014 April 0.756697 0.736251
2014 May 0.744064 0.707179
2014 June 0.755754 0.698834
2014 July 0.733679 0.762407
2014 August 0.741639 0.716037
2014 September 0.741534 0.702546
2014 October 0.707492 0.66974
2014 November 0.686576 0.594482
2014 December 0.726952 0.705015
2015 January 0.72996 0.709121
2015 February 0.732951 0.673143
2015 March 0.710573 0.694753
2015 April 0.758843 0.721615
2015 May 0.762027 0.707402
2015 June 0.732082 0.73305
2015 July 0.743667 0.748164
2015 August 0.760771 0.725426
2015 September 0.7394 0.666954
2015 October 0.742091 0.716017
2015 November 0.725842 0.722423
2015 December 0.76687 0.710419
2016 January 0.762291 0.746982
2016 February 0.768989 0.689336
2016 March 0.707572 0.703551
2016 April 0.757032 0.699485
2016 May 0.780384 0.72373
2016 June 0.778517 0.718179
2016 July 0.744111 0.782892
2016 August 0.721704 0.757833
2016 September 0.759627 0.693781
2016 October 0.746102 0.707908
2016 November 0.730162 0.697239
2016 December 0.765147 0.705976
2017 January 0.758527 0.734717
2017 February 0.765359 0.751656
2017 March 0.709314 0.700315
2017 April 0.772447 0.755055
2017 May 0.762734 0.730602
2017 June 0.733339 0.73
2017 July 0.761476 0.730056
2017 August 0.766613 0.757342
2017 September 0.771593 0.641343
2017 October 0.756859 0.842757
2017 November 0.751872 0.692413
2017 December 0.732699 0.768518
2018 January 0.745174 0.712613
2018 February 0.776343 0.729246
2018 March 0.803646 0.668296
2018 April 0.79408 0.663304
2018 May 0.725101 0.741172
2018 June 0.634709 0.770629
2018 July 0.768038 0.705355
2018 August 0.758523 0.659283
2018 September 0.7387 0.761824
2018 October 0.749521 0.559929
2018 November 0.702053 0.743003
2018 December 0.751153 0.672965
2019 January 0.722894 0.754434
2019 February 0.750632 0.716229
2019 March 0.761095 0.783456
Benefit amount ($)
Year Month Other regions Downturn regions
2013 January 1269 1739
2013 February 1458 1336
2013 March 1687 687
2013 April 1336 1017
2013 May 1651 505
2013 June 1705 541
2013 July 1749 1977
2013 August 2102 1714
2013 September 2058 1686
2013 October 2351 2716
2013 November 2130 2118
2013 December 1708 2005
2014 January 1554 2124
2014 February 2037 1611
2014 March 1964 1156
2014 April 1372 1505
2014 May 1640 2253
2014 June 1859 2412
2014 July 1720 2811
2014 August 2082 2519
2014 September 2133 3513
2014 October 2597 3203
2014 November 1936 4347
2014 December 1430 3511
2015 January 1874 3237
2015 February 1393 3512
2015 March 1659 4261
2015 April 1737 3568
2015 May 1665 3030
2015 June 2064 3724
2015 July 2107 3474
2015 August 1956 4266
2015 September 3019 4753
2015 October 2083 4146
2015 November 2538 3814
2015 December 2114 3529
2016 January 2195 3505
2016 February 1536 3825
2016 March 2609 4473
2016 April 1483 3499
2016 May 2082 3283
2016 June 1814 3356
2016 July 1927 1959
2016 August 1494 2365
2016 September 1685 1946
2016 October 2002 2791
2016 November 2298 2104
2016 December 1671 2325
2017 January 1362 1596
2017 February 1539 1621
2017 March 1739 2558
2017 April 1244 2208
2017 May 1981 2091
2017 June 1358 2547
2017 July 1673 2233
2017 August 1530 1195
2017 September 1298 4999
2017 October 999 1007
2017 November 1404 1598
2017 December 1106 1627
2018 January 1361 1967
2018 February 1751 2223
2018 March 1249 3056
2018 April 790 1015
2018 May 1997 2572
2018 June 2138 1515
2018 July 1502 2570
2018 August 2022 5714
2018 September 2920 2048
2018 October 2240 3429
2018 November 2293 1348
2018 December 2162 2857
2019 January 2774 2877
2019 February 1602 7035
2019 March 2269 1182

6. Impact of the Program

6.1 Estimated averted layoffs

Key finding: Between 2013 and 2020, an annual average of 4,877 layoffs were estimated to be averted by the Program. Among Work-Sharing claimants, 7% were laid-off within 3 month and about 15% within 12 months after their claims. The number of work-sharing claimants who claimed EI Regular benefit within 12 months after their claim, represented about 50% of the estimated number of averted layoffs.

The core objective of the Program is to prevent layoffs. Nevertheless, there could be instances where participants of the Program may still face layoffs shortly after the end of their Work-Sharing claim. In these situations, Work-Sharing could in some cases be seen as postponing the layoffs rather than preventing them. This was not evident in all cases, as a firm may be subject to new, unanticipated economic /operational challenges. This report provides evidence pertaining to 2 aspects: first, the prevention of layoffs during Work-Sharing claims, and second, deferral of layoffs. Following the approach from the 2016 Evaluation report, there was a presumption of perfect substitution between 1 hour of work reduction through Work-Sharing and 1 hour of work reduction via layoffs.Footnote 20 This meant that if employers reduced employee hours by 20% through Work-Sharing, it was assumed that in the absence of Work-Sharing, a corresponding 20% of the workforce would have been layoffs. This approach assumed that the average reduction in work hours corresponded to an equivalent reduction in the labour force on average.

By multiplying the mean reduction in work hours with the count of Work-Sharing claims, an approximate number of prevented layoffs due to the Program was obtained. The estimated averted layoffs during the claim are presented in Table 8.

The estimated averted layoffs due to participating in the Work-Sharing Program ranged from a low of 3,463 in 2013 to a high of 19,593 in 2020 during the COVID-19 period. On average, across all the years presented, 4,877 layoffs were estimated to be prevented by the Program. Consistent with the finding that Program participation is counter-cyclical, so are the estimated number of layoffs averted by the Program. The economic downturn of 2015 and the labour market disruption brought by the pandemic in 2020 led to the highest estimated number of layoffs averted. This is largely attributed to the number of claims, given the stable average work reduction of 26% across the years.

Among Work-Sharing claimants between 2013 and 2019, 7% were laid-off within 3 months, 11% within 6 months and about 15% within 12 months after their claims.Footnote 21 The number of work-sharing claimants who claimed EI Regular benefit within 12 months after their claim, represented about 50% of the estimated number of averted layoffs.

As mentioned previously, workers retain their EI eligibility and entitlement while on Work-Sharing. The proportion of workers claiming Work-Sharing benefits again increased to 74% and 96% for claims initiated in 2018 and 2019, respectively. This underscored the repeat use of the Program by their employers particularly in the wake of the COVID-19 pandemic.

Reducing working hours as an alternative to layoffs

From an employer perspective reducing hours represent an alternative cost-cutting strategy to layoffs. From an operational standpoint, temporarily reducing hours can be viewed as less disruptive than layoffs. Still, for employees, reducing hours entail a reduction in pay. The Work-Sharing Program seeks to make up part of the difference in pay for employees reducing their working hours. As mentioned previously, the Work-Sharing program allows all participating employees to remain employed with a temporarily reduced schedule by 10% to 60% of their regular hours while their employer recovers.

The employer survey found that half (50%) of the Work-Sharing agreements resulted in employees reducing their workweek hours by 10% to 30%, 20% by 31% to 40%, 10% by 41% to 50%, and about 8% by 51% to 60%.

Further, the proportion of reduced workweek hours was higher in extended agreements and lower in standard agreements. For example, extended agreements represented about 21% of 10%-30% reduced workweek hours compared to 28% for standard agreements. Conversely, extended agreements accounted for 22% of 31%-60% reductions, whereas standard agreements accounted for 16%.

A similar distribution was found from respondents to the employee survey regarding the difference in earnings stemming from the reduction in their working hours. Among respondents, about 6% indicated a reduction of less than 10% in their earnings, 37% indicated a reduction ranging from 10% to 30%, 18% indicated a reduction ranging from 30% to 49% and 8% of 50% or more.

In terms of the number of reduced working hours, most respondents to the employee survey reduced their work week by around 13 hours. Among respondents, 8% reduced their workweek by 5 or fewer hours, 60% by 6 to 19 hours, and 18% by 20 or more hours.

As similar distribution was observed among respondents working in the manufacturing industry. In the services industry fewer respondents (12%) reduced their work week by 20 hours or more. On the other hand, in the primary and construction industries, more respondents (24%) did.

Across the Prairies, Atlantic, and British Columbia, a similar distribution was observed. However, 27% of respondents working in Quebec reduced their hours by 20 or more hours.

Lastly, almost all (96%) of surveyed employers indicated that employees were informed about their reduced hours. Four-fifths (80%) indicated employees were informed about how long they would be working reduced hours under the Work-Sharing agreement from a "good to a full extent". Moreover, nearly 70% of employees who responded to the survey indicated that the information about the reduced work-week hours was shared with them from a "good to a full extent". However, one-quarter (25%) said "not at all to a little extent".

Table 8: Averted layoffs after the end of Work-Sharing claims and layoffs within 52 weeks of Work-Sharing claims, 2013 to 2020
Year Number of Work-Sharing claims Percentage of average work reduction Estimated layoffs averted Number of Work-Sharing claimants laid-off 52 weeks after their claims
2013 12,925 27% 3,463 1,590
2014 8,978 27% 2,433 1,537
2015 18,648 27% 5,039 3,097
2016 14,706 26% 3,820 1,281
2017 5,315 25% 1,324 454
2018 3,185 27% 849 516
2019 9,746 26% 2,497 2,322
2020 78,394 25% 19,593 N/A
Average
Up to 2018		 10,626 26% 2,821 1,412
Average
Up to 2020		 18,987 26% 4,877 N/A

The evaluation carried out an approach like the one used back in 2016 in a technical study for the Work-Sharing Program evaluationFootnote 22, and was employed to assess the success of the Program in reducing layoffs. The number of averted layoffs within 3 months and 6 months after the Work-Sharing claim were examined. In this study, it was assumed that the Program ‘failed' to avert layoffs if employees received EI regular benefits within a specified period following the termination of Work-Sharing claims. It was assumed that Work-Sharing claims were terminated on the last week in which employees received Work-Sharing benefits.

This definition can be considered a reasonable proxy of layoffs. One of the requirements to participate in the Program was that employees have already met the qualification requirements for EI regular benefits. Further, the benefit rate and the normal duration of their claims would not be reduced by participating in Work-Sharing. Therefore, it is reasonable to assume most qualified employees would receive EI regular benefits if they were laid off after the termination of their participation in the Work-Sharing Program. However, this would not apply to those who started another job immediately or had withdrawn from the labour force.

Layoffs are identified as any Work-Sharing participant receiving EI regular benefits (at least $1) within 3 months (13 weeks) and 6 months (26 weeks) of their final week of Work-Sharing benefits (refer to Table 9) Footnote 23. The variation of layoffs across the years may be explained by the labour market conditions faced by workers' employers over the period. Overall, layoff rates were higher during or at the onset of economic downturns (2015, 2016, and 2019) and lower towards the end or after the economic downturns (2017).

Table 9: Layoffs within 3 months and 6 months after the end of Work-Sharing claims by year, 2013 to 2019
Year Work-Sharing claims Layoffs as a % of Work-Sharing claims within 3 months Layoffs as a % of Work-Sharing claims within 6 months
2013 12,925 5% 8%
2014 8,978 10% 13%
2015 18,648 9% 13%
2016 14,706 4% 7%
2017 5,315 4% 6%
2018 3,185 6% 10%
2019 9,746 13% 18%
Average 10,500 7% 11%

The employer survey also supported that the Program was effective in preventing layoffs. Notably, 87% of employers reported that none of their employees were laid-off due to lack of work after the Work-Sharing agreement. Responses from employers represents those that were still in operations after having use the Work-Sharing program and at the time of the survey (explicitly excluding employers no longer in business), which most likely positively affected responses received.

Further, all employers interviewed (n=8), stated that the Program prevented layoffs for their business. One employer elaborated on how much the Program supported them:

"We would not achieve the same outcome because we would have to have laid people off. Then the recovery would have been a lot more painful because we would have had to rehire and once you lay people off, most of them would already have other employment. Then we would be looking for new employees and have that learning curve and a lot of time, effort and money is spent".

Few employers also spoke to the effectiveness of the Program because it saved them costs of retraining. One employer stated:

"We invest a lot of time and effort in training the people and we work in a very specialized area of computer science. It is not easy to find replacements when we lose our staff because of the severe economic downturns. A program like Work-Sharing goes a long way in helping us keep our staff and avoiding any difficulties in replacing staff that are very specialized and in short supply. It was positive on every aspect".

These positive attitudes were common among most of the employers interviewed, indicating overall satisfaction with the Program.

Finally, the literature review provided evidence that the presence of a Short-Time Work program helped stabilize employment during the Great Recession and the COVID-19 pandemic. Further, many of the studies also found the impact of Short-Time Work Programs would likely be more positive if their use would be limited to economic downturns rather than during recovery. For example, one cross-country studyFootnote 24 found that enrolling 1 additional worker in Short-Time Work was correlated with 0.27 fewer workers being unemployed. Firm-level studiesFootnote 25 from Germany and France found that unemployment would have increased between 2.9-4.5 percentage points during the pandemic for participating countries.

6.2 The likelihood of layoffs by claimant and firm characteristics

The likelihood of layoffs of claimants was explored further using multivariate analysis (probit regressionFootnote 26). This was used to help understand how claimants' characteristics and other related factors might influence whether they were laid off after participating in the Work-Sharing Program (refer to Table 10). To capture the effects of an economic downturn, a dummy variable for the commodity downturn regions was also included.

It was found that certain groups of individuals were more likely to be laid off within 3 months and 6 months after the end of their Work-Sharing claims:

Claimants living in the Prairies and those working in manufacturing industries were the least likely to be laid off following their Work-Sharing claims established between 2013 and 2019, compared to claimants living in other regions and working in other industries, respectively.

The unemployment rate and claim duration (number of weeks used) were negatively associated with layoffs. An explanation of this relationship could be that the claimants with Work-Sharing claims established during high unemployment periods (during economic downturns) and ending during relatively lower unemployment periods were less likely to experience layoffs at the end of their Work-Sharing claims. Moreover, in general, Work-Sharing agreements tend to be extended during prolonged periods of high unemployment ( longer claim duration), thereby reducing the incidence of layoffs. Long-tenured workers were found to have a lower likelihood of being laid off, likely due to their experience and seniority within the company. Reduced workhours showed a strong positive association with the probability of layoffs. Moreover, claimants in regions affected by the downturn in commodity prices were positively associated with the probability of layoffs, consistent with prior findings.

When examining the layoffs associated with claims established in 2020, a similar trend was observed. However, claimants from Quebec, and those working in the construction industry were an exception, as they were more likely to face layoffs.

Table 10: Likelihood of layoffs within 3 and 6 months after the end of Work-Sharing claims by claimants' characteristics, 2013 to 2020
Characteristics Layoffs within 3 months (2013 to 2019) Layoffs within 3 months (2020) Layoffs within 6 months (2013 to 2019) Layoffs within 6 months (2020)
Gender (male) 0.3 0.2 1.1* 0
Age 0.0* 0.1* 0.1* 0.1*
Regions (Atlantic) N/A N/A N/A N/A
Quebec -3.1 2.7* -5.0* 3.6*
Ontario -6.0* -0.5 -7.9* -1.1
Prairies -7.8* -1.9* -11.3* -2.5*
British Columbia -6.4* -2.0* -10.1* -2.9*
Industry (primary) N/A N/A N/A N/A
Construction -1.6 2.5 -0.6 3.7*
Manufacturing -2.7* -1.3 -1.5 -1.0
Services -1.3 -1.8 1.7 -1.6
Profession (management)* N/A N/A N/A N/A
Business/Finance/Administration -2.0* -1.3* -2.1* -1.9*
Sciences -1.5 -0.7 1.1 -1.3*
Marital status (married/common law) N/A N/A N/A N/A
Widowed/Divorced/Separated 0.8 0.7 0.8 1.1*
Single 1.4* 0.5 2.0* 0.7*
Long tenured -2.5* -1.6* -3.4* -2.2*
Unemployment rate -0.6* N/A -0.9* N/A
Duration (weeks used) -0.07* -0.04 -0.08* -0.06
Reduced workhours 25.8* 12.8* 32.9* 15.5*
Commodity downturn regions 7.5* 2.6* 10.3* 3.5*
Observations 71,307 72,698 71,307 72,698

Regression analysis was also conducted to estimate the likelihood of layoffs by firm characteristics and other factors after participation in the Program. The analysis showed a higher probability of a firm laying off Work-Sharing employees if their agreement started in 2015 and 2019. For instance, firms were 5.2 and 8.3 percentage points more likely to lay-off employees in 2019 after 3 and 6 months respectively. The higher probability of layoffs in both 2015 and 2019 is likely due to the crises that followed in 2016 and 2020, respectively. Nonetheless, firms who began agreements in 2020 had a lower probability of laying off Work-Sharing employees after participating in the Program. This may be due, in part, to the resurgence of the Canadian labour market in 2021.

From 2013 to 2020, most firms (72% and 67%, respectively) laid off 10% or less of their Work-Sharing employees within 3 and 6 months after their participation in the Program. Work-Sharing firms were more likely to layoff Work-Sharing employees after their agreement if they also laid-off employees during their agreement. In addition, larger firms and firms with a higher employment income were less likely to layoff workers after the agreement. Lastly, firms in the manufacturing industry were more likely to layoff a higher proportion of Work-Sharing employees.

Generally, there were fewer firms that laid off a larger proportion of their employees. For instance, only 15% of firms laid-off over 90% of their Work-Sharing employees. This can be explained by the fact that a small proportion of Work-Sharing firms were still struggling or in need of financial support after the end of their agreements.

Findings from the employee survey also suggested a positive perception of the Program regarding the Program's effectiveness in preventing layoffs. For instance, the majority (65%) of the surveyed employees indicated the Program prevented them being laid off. In addition, only 5% of the survey respondents indicated that they were laid off (refer to Table 11). Most employees who responded to survey returned to their full-time work, with male respondents more likely to do so than women. On the other hand, female respondents were more likely to be laid off than male.

Table 11: Work status at the end of the Program
Work status at the end of the Program All Male Female
Returned to full-time work 84% 87% 80%
Returned to part-time work 3% 2% 4%
Laid off 5% 3% 7%
Found another job 5% 6% 6%
Don't know/prefer not to say 3% 2% 3%

6.3 Impact analysis on participating employees

Key finding: Impact analysis showed that employee participation in the Program led to lower benefit usage, higher return-to-work rates, less reliance on employment insurance, and increased income. This highlights the Program's success in maintaining job stability and economic resilience.

Impact analysis was carried out by comparing employees who received Work-Sharing benefits to non-seasonal employees who were laid off due to shortage of work and did not participate in a Work-Sharing agreement.Footnote 27 The impact analysis focused on Work-Sharing claims established between 2015 and 2017.Footnote 28

The treatment and control groups were constructed in 2 steps. First, firms participating in the Work-Sharing Program between 2015 and 2017 were paired based on industry, region, and size with similar firms where employees filed EI regular claims during the same period. Next, individuals in the Work-Sharing Program (treatment group) were matched with those who filed EI regular claims (control group) based on their characteristics. A Propensity Score Matching technique was employed to help reduce the impact of selection bias. The analysis was extended to commodity downturn regions. The treatment and control groups within the commodity downturn regions were compared with those residing in regions other than commodity downturn regions (refer to Table 12).

The findings showed that Work-Sharing claimants used around 3.5 benefit weeks less than EI Regular claimants. Correspondingly, Work-Sharing participants (treatment group) received significantly lower average benefit amounts than comparable EI regular claimants. This is due to Work-Sharing claimants receiving payment for reduced work hours unlike other EI benefits.

The Work-Sharing participants (treatment group) also shows a statistically significant positive impact on the likelihood of individuals returning to work, with an effect size of around 10 percentage points. Similarly, the treatment group was substantially more likely to return to the same business. This demonstrates, in line with the descriptive analysis, that the Work-Sharing Program helped employers retain their skilled workforce.

In addition, the likelihood of future use of EI was lowered following participation in the Work-Sharing Program. Similarly, Work-Sharing Program participants (treatment group) was more likely to have an increase in employment income.

Table 12: Impact of the Program on selected outcome variables, 2015 to 2017
Outcomes (Work-Sharing vs. EI Regular) All regions Commodity downturn regions Other regions
Benefit weeks used -3.5* -3.0* -2.8
Average benefit amount received -$291* -$298* -$282*
Return to work after the claim 10pp* 10pp* 10pp*
Return to same business after the claim 48pp* 50pp* 45pp*
Future EI use (within 52 weeks of the claim) -15pp* -11pp* -18pp*
Employment income difference (1 year before and 2 years after the claim) $3,625* $5,241* $1,716*
Observations 152,751 50,033 102,718

Finally, 25% of the surveyed employee respondents indicated the Program affected their spending habits from "not at all to a little extent". Similarly, 38% of the respondents believed the Program had "no or little" affect on their ability to meet their financial obligations. Around 26% of the respondents indicated they were financially better off by participating in the Program from a "good to a full extent."

6.4 Likelihood of participating firms to subsequently close

Key finding: Participating firms were less likely to close.

As noted in the averted layoffs section, around 15% of participating firms laid-off most or all their Work-Sharing employees. Therefore, it is important to consider to what extent these firms closed after participation. Firms were deemed to have closed after the end of their work-sharing agreements if they had 0 employees associated with their business in any of the year(s) over a 4-year period following their participation.

Like averted layoffs, the firms that laid-off employees during their Work-Sharing agreement were more likely to close within 4 years. The smallest and largest firms had the highest closure rates, each at 13%. However, after 4 years, smaller companies with less than 20 employees had a much higher closure rate (45%) compared to larger ones (35%). The analysis found that after 1 year, most provinces had similar closure rates. However, within 4 years, the Prairie provinces had a much higher closure rate (54%) compared to Ontario and Quebec (at 25% and 28%, respectively). This might be because of the commodity downturn crisis which affected the Prairie provinces.

In terms of industries, after 1 year, the firms in the manufacturing and services industries had similar closure rates (around 10 to 11%). However, after 4 years, manufacturing firms had a lower closure rate (35%) compared to services firms (41%). Further, the firms with Work-Sharing agreements in 2016 or 2019 were more likely to close, possibly due to the commodity crisis and/or the pandemic. It was also found that firms with multiple Work-Sharing agreements were less likely to close, but this might be because larger companies, which are less likely to close in the first place, tend to have more agreements. Overall, the regression results suggested that the participating firms were less likely to close, and the crises were temporary. The regression results are provided in Table 3, Appendix E.

6.5 Training

Key finding: According to employee and employer survey results, a small proportion of employers provided training to their employees while they were receiving Work-Sharing benefits. The limited provision of training by participating employers was primarily due to cost concerns or its perceived irrelevance in a context of business losses.

Only around 6% of surveyed employees participated in any training activities while they were receiving Work-Sharing benefits. Of those who participated in training, skills enhancement activities accounted for 87%, while apprenticeship accounted for 13% of the training activities. Moreover, almost all the training activities (over 91%) were provided by the employers. The skills enhancement was provided predominately during work hours, either on-site (50%) or off-site (20%), followed by training during non-working hours on-site or off-site (at 15% each). Apprenticeship programs occurred mainly on-site during working hours (67%) and were offered for an average of 7 weeks.

On the other hand, among surveyed employers, one-third (32%) indicated that training activities were provided to their employees while the Work-Sharing agreement was in place. Among those providing training activities to their employees, most (88%) provided skills enhancement training activities whereas apprenticeship training accounted for only 12%. Of the training activities, on-site skills enhancement during regular working hours was predominant (76%), followed by on-site (17%) and off-site (7%) courses during non-working hours. Surveyed employers indicated the apprenticeship programs occurred mainly on-site during working hours (80%) and were offered for an average of 8 weeks. Overall, these latter findings were consistent with the findings from the employee survey.

Findings from the key informant interviews also suggested the limited provision of training by participating employers was primarily due to cost concerns or its perceived irrelevance in a context of business losses. While some employers opted for cross-training where employees were prepared to perform other jobs duties to facilitate labour flexibility, others expressed reservations. Internal officers generally opposed mandatory training, emphasizing flexibility in recovery measures, while experts debated its effectiveness, with some questioning its relevance to cyclical downturns or structural issues.

These findings underscore a significant focus on on-site training for skills enhancement during regular working hours. However, the majority (86%) of employee survey respondents did not participate in any training activities, and 8% of respondents were uncertain about such activities. Similarly, most employer survey respondents (53%) did not provide any training activities, and 15% were uncertain about such activities.

7. Delivery of the Program

7.1 Application process

Key finding: Most surveyed and interviewed employers and employees had a positive experience with the Program administration. However, some employers found the overall application process burdensome and time consuming.

It was found that a significant majority (82%) of surveyed employers were satisfied with the overall application process from initiation to approval from "a good to a full extent" (refer to Table 13). In addition, most of surveyed employers were satisfied from a "good to a full extent" with the:

Table 13: Extent to which surveyed employers were satisfied with the application process
Satisfied Overall application process Service Canada's website Timeliness of approval Clarity of instructions* Overall communication and support
Not at all 0% 1% 0% 0% 0%
To a little extent 5% 6% 4% 5% 4%
To some extent 10% 22% 12% 27% 15%
To a good extent 47% 51% 56% 51% 49%
To a full extent 35% 14% 24% 13% 28%
Don't know/prefer not to say 2% 6% 3% 4% 3%

However, areas needing improvement for a more consistent and seamless service delivery were identified by surveyed employers. Around 6% of employer respondents found the application process very challenging and provided details regarding the challenges they experienced. Most of them found the application process very complicated, felt it required a lot of paperwork and found it very time consuming. Some indicated that the instructions to complete the application were unclear and they did not receive adequate support from Service Canada.

Further, most of the interviewed employers were satisfied with the support from regional officials. However, some also found that the overall application process was burdensome and time consuming. A few specifically identified that the application process was particularly a barrier to participation for smaller firms and employers for whom their first language was not English or French. They also found the completion of recovery plans and employees' login on the government website challenging. Employer associations also supported the views of employers stating that the application process can be daunting, especially for employers who never applied before. Most of the internal officers also identified the application process as a barrier to participation as well. Lastly, internal officials noted inconsistency across regions in the Program delivery in terms of the various levels of approval and details required in reports.

Key suggestions by employers to ease the application process were to make it less bureaucratic, require less paperwork, and have less demand on employees. Further, the associations suggested the language on the website and application should be simplified. Employers, internal officials, and experts suggested the Program needs an improved system that can manage online applications and pull information from common payroll systems and the Canada Revenue Agency. Further, internal officials requested improved access of information between the Work-Sharing and EI Regular benefits. Internal officials also identified training needs on EI Regular benefits, managing expectations by employers, soliciting information from employers and training on best practices across regions.

On the other hand, the majority (69%) of surveyed employee respondents were also satisfied from "a good to full extent" with the overall application process (refer to Table 14). In addition, most surveyed employee respondents were satisfied from a "good to a full extent" with the:

Table 14: Extent to which employees were satisfied with the application process and the available information
Satisfied Overall application process Service Canada website (online) Service Canada office (in-person) Information provided by employer Information provided by employee's representative
Not at all 2% 2% 5% 5% 7%
To a little extent 5% 5% 9% 8% 6%
To some extent 15% 18% 27% 18% 15%
To a good extent 45% 43% 50% 38% 29%
To a full extent 24% 27% 9% 26% 16%
Don't know/prefer not to say 9% 6% 5% 6% 27%

The majority of respondents (81%) applied for the Work-Sharing benefits via Service Canada's online application portal. Only 5% of the respondents completed their application in-person at a Service Canada office. The rest of the respondents (14%) were either unsure or preferred not to say.

7.2 The recovery plan

Key finding: The recovery plan was found to be challenging and time consuming by surveyed and interviewed employers.

Since the COVID-19 pandemic and the resulting special measures, the recovery plan requirement has been simplified to "recovery measures". Previously, the recovery plan was 4 pages long and required numerical detail. Now, the measures only require a short description of recovery activities.

The completion of the recovery plan was identified as notably challenging for many surveyed employer respondents. They encountered difficulties due to unclear instructions from Service Canada, along with experiences of encountering unsupportive or inadequately knowledgeable staff. In fact, 2 of the surveyed employer respondents eventually chose not to continue pursuing their applications.

Further, interviewed employers had mixed opinions about requiring a recovery plan. Those who said there should be one had one already prepared. Those who suggested there should not be one, indicated their recovery was strictly dependent on market conditions. Employer associations and most of the internal officers supported that the requirements should not be so heavy. Experts stated it would not be possible to identify from a recovery plan which companies would be able to survive downturns. A few internal officers confirmed this by stating that the firms could write down anything and they have no way of knowing if it was valid. Moreover, some internal officers indicated that monitoring the implementation of the recovery plan was very hard for program officers who were not involved in the industry.

One officer explained:

"One of the cons is from an operational standpoint, we don't really have a good grounding for how to assess whether that's good plan or not?". Another stated "Honestly, they can tell us anything. Are they really going to take these actions? Will it really make a difference?".

While it is uncertain whether the officers were referring to the recovery plan prior to COVID-19 pandemic or the current recovery measures, the findings suggest they were leaning towards keeping it simple.

Despite the challenges in the completion of recovery plans, surveyed employers indicated they adopted certain measures for business recovery. Only cost-cutting measures were implemented by 15% of the respondents in their recovery plans, while almost 2% focused only on marketing and advertising, and almost 2% on product development-related strategies. When these strategies were combined with other approaches, cost-cutting measures accounted for 75% of the overall strategies, followed by marketing and advertising strategies at 55%, and product development-related strategies at 40%. There were no significant differences observed by region and/or industry.

8. Conclusion

The Work-Sharing Program has been perceived as effective in addressing the needs of both employers and employees by helping to retain workers and prevent layoffs. The Program has been particularly beneficial during economic downturns, such as the commodity price downturn and the COVID-19 pandemic. The Program helped in retaining employees, reducing hiring, and training costs, and preventing layoffs, as reported by surveyed employers. The majority of surveyed employers expressed their likelihood of participating in the Program again if faced with employee layoffs in the future.

The Program has been found to be counter-cyclical to economic conditions, with increased participation during economic downturns and decreased participation during periods of economic recovery. The Program has been primarily utilized by employers in the manufacturing industry, with a significant number of participants from the Prairies. Smaller firms have faced more barriers to participation due to the requirements of the application process, while larger firms have faced more barriers during participation due to reporting requirements and high turnover.

Participants in the Program were predominantly male, older, residing in the Prairies, and working in the manufacturing industry. They tended to have longer job tenure and higher employment income compared to EI Regular claimants. Participating employees had a positive perception of the Program, with the majority indicating that it strengthened their attachment to their employers and their employers had their best interest in mind. The Program led to lower benefit usage, higher return-to-work rates, less reliance on employment insurance, and increased income for participating employees.

Between 2013 and 2020, an annual average of 4,877 layoffs were estimated to be averted by the Program. Among Work-Sharing claimants, 7% were laid-off within and about 15% within 12 months after their claims. However, the number of work-sharing claimants who claimed EI Regular benefit within 12 months after their claim, represented about half of the estimated number of averted layoffs.

The majority of participating employees did not engage in any training while receiving Work-Sharing benefits. The limited provision of training by participating employers was primarily due to financial/capacity considerations, and its perceived irrelevance in the context of business losses.

Overall, the Program administration was perceived positively by surveyed employers and employees. However, some employers found the application process burdensome and time-consuming, and there were challenges in completing the recovery plan.

In conclusion, the Work-Sharing Program has been effective in meeting the needs of employers and employees by retaining workers and preventing layoffs during economic downturns. The Program has led to positive outcomes for participating employees, including lower benefit usage, higher return-to-work rates, and increased income. However, there are areas for improvement in program administration and awareness. Overall, the Program has played a role in maintaining job stability and economic resilience.

9. Recommendations

Based on the findings of this report, the following are the recommendations for the improvement of the Work-Sharing Program:

Recommendation 1

It is recommended the Program work towards simplifying the application process, including the recovery plan requirement.

The report highlighted that some employers found the overall application process burdensome and time-consuming. To encourage greater participation, it is recommended to simplify the application process, providing clear instructions and support to employers. This could include reducing paperwork, improving online resources, and ensuring consistent and knowledgeable support from Service Canada staff.

The report also found that smaller firms may have faced more barriers to participation due to the demands of the application process. To encourage greater participation from small firms, it is important to provide tailored support and resources that address their specific needs. This could include dedicated assistance for completing the application, providing clear guidelines and templates, and offering language support for employers whose first language is not English or French.

Further, the report highlighted completing the recovery plan was challenging for many employers, with unclear instructions and difficulties in implementation. It is recommended to revise the recovery plan requirement to make it more user-friendly and relevant to different industries. Simplifying the plan and focusing on key recovery measures rather than detailed numerical information could alleviate the burden on employers while still ensuring accountability and monitoring of program outcomes.

Recommendation 2

It is recommended the Program enhance its promotion and awareness.

The report found that program awareness among employers and employees was relatively low. To increase program participation, it is recommended to enhance promotion and awareness efforts. This could involve conducting outreach to unions, advertising the Program on the Service Canada website and social media, incorporating program information in newsletters, and utilizing existing networks such as the Council of Canadian Entrepreneurs and the Federation of Canadian Chambers of Commerce.

By implementing these recommendations, the Work-Sharing Program can be further improved to better meet the needs of employers and employees, increase program participation, and enhance the overall effectiveness of the Program in preventing layoffs and maintaining job stability.

Appendix A: Bibliography

Internal sources (not published, available upon request)

External sources

Appendix B: Special measures

Between 2013 and 2020, the Program implemented 7 special measures. These measures and their changes are highlighted in Table 1.

Special measures: 2013 to 2020
Date Description of the measure
July 5, 2013 to September 27, 2013 Due to flooding in Alberta, Program accessibility was increased through expanded eligibility criteria and certain program criteria were waived such as the cooling-off period, and the recovery plan requirement.
July 12, 2013 to October 4, 2013 Due to the train derailment in Lac-Mégantic, (Quebec) certain program criteria were waived. This included the requirement for businesses to prove a 10% decrease in business activity, the cooling-off period, and the requirement for labour market information.
April 1, 2016 to March 31, 2017 Due to the downturn in the commodities sector the maximum duration of an agreement was extended to 76 weeks and the cooling-off period was waived.
May 4, 2016 to May 4, 2017 Due to wildfires in Fort McMurray (Alberta), certain program criteria were waived, such as the requirement of employers to prove a 10% decrease in business activity, a 60% average usage rate, the cooling-off period, and the recovery plan requirement.
July 30, 2017 to March 28, 2020 Due to trade disputes with the United States in the forestry sector, the maximum duration of an agreement was extended to 76 weeks, the cooling-off period was waived, and the recovery plan requirements were eased.
April 19, 2018 to March 27, 2021 Due to trade disputes with the United States in the steel and aluminum sector, the maximum duration of an agreement was extended to 76 weeks, the cooling-off period was waived, and the recovery plan requirements were eased.
March 15, 2020 to September 25, 2022 The duration of agreements was extended to a maximum of 76 weeks and the mandatory cooling-off period was waived. This allowed for a subsequent 26-week agreement immediately following the 76-week agreement for a maximum duration of 102 weeks, if not combined with other special measures. In addition, the recovery plan requirements were eased. Eligibility was also expanded to include Government Business Enterprises, and not-for-profit organizations experiencing a reduction in revenues and essential staff.

Appendix C: Evaluation matrix

Evaluation questions Lines of evidence

Labour market needs and awareness

Question 1: What labour market needs does the Work-Sharing program address?

  1. What factors facilitate/hinder the participation into the program by an employer and a group of employees?
  2. To what extent are employers and employees aware of the program?
  • literature review
  • survey of employers
  • survey of employees
  • key informant interviews

Participation and usage

Question 2: What is the socio-economic profile of employers and employees who utilized an agreement under the standard parameters of the Work-Sharing program and when special measures were in effect (for example, age, gender, industry, and income)?

Question 3: What is the usage pattern of employers and employees who utilized an agreement under the standard parameters of the Work-Sharing program and when special measures were in effect (for example, duration of EI benefits and length of agreements)?
  • literature review
  • survey of employers
  • survey of employees
  • key informant interviews
  • technical studies

Impacts

Question 4: How many layoffs were averted as a result of the Work-Sharing program during standard agreements and when special measures were in effect?

Question 5: What are the impacts of the Work-Sharing program on employer and employee outcomes ( for example, income, job tenure, future EI use, business viability, and future Work-Sharing use)?

  1. Are these outcomes different when agreements are utilized when special measures are in effect compared to standard agreements?
  • literature review
  • survey of employers
  • survey of employees
  • key informant interviews
  • technical studies

Delivery

Question 6: What are the implementation challenges and best practices in the delivery of the Work-Sharing program, in terms of initiating Work-Sharing agreements?
  • survey of employers
  • survey of employees
  • key informant interviews

Appendix D: Lines of evidence

This evaluation incorporated a mixed-methods approach using both quantitative and qualitative lines of evidence. While it primarily relied on administrative data, the evaluation also consisted of a literature review, 2 surveys, and key informant interviews.

Literature review

The literature review assessed the Canadian Work-Sharing program and various international Short-Time Work schemes and to identify if they have been effective at preventing layoffs and stabilizing employment during times of economic downturns. More broadly, the literature review helped contextualize the labour market need of the Work-Sharing Program within Canada and internationally in terms of its participation, usage, effect, design, and delivery of the Program. Academic papers that used various methodologies to estimate the impacts of Short-time Work Programs during the Great Recession and the COVID-19 Pandemic were reviewed. The studies discussed in this literature review have been primarily collected using the EBSCO and Google Scholar search engines. The key words used included "Work-Sharing", "Short-Time Work", "Job-retention scheme" "Layoff prevention", "Canada" and "United States". The research papers considered were those from 2009 onwards with data covering at least up until 2010 to estimate how many layoffs were prevented due to the Short-time Work Program.

Survey of employers

The employer survey sought information directly from employers who participated in the Work-Sharing program relatively recently, anytime during 2016 and 2020. The employers who participated in the Program between 2016 and 2019 were contacted (n=1,882), and the overall response rate was 13.3% (n=253).

The survey included questions related to, but not limited to:

The survey was administered through ESDC's Interactive Fact-Finding Service's web survey platform, and the analysis was carried out in-house by the Evaluation Directorate.

Survey of employees

The employees survey sought information directly from employees who participated in the Work-Sharing program anytime during 2018 and 2020. The employers who participated in the Program between 2017 and 2019 were contacted (n=7,219), and the overall response rate was 5.7% (n=429).

The survey included questions related to, but not limited to:

The sample frame of employees was stratified using administrative data on key variables such as age, gender, regions, and industry for 2019 and 2020. However, due to the comparatively low participation of employees in the Work-Sharing program in 2018, all 2018 participants were included in the sample. The survey was administered through ESDC's Interactive Fact-Finding Service's web survey platform, and the analysis of the web survey questionnaire was carried out in-house by the Evaluation Directorate.

Key informant interviews

The Key informant interviews were built upon the surveys and quantitative analysis to provide context and a deeper understanding of the Program. 4 groups of key informants that could provide insight into the Work-Sharing Program were selected to be interviewed. These groups included employers that had participated in the Program, employer and employee associations that represent employers and employees that may have participated in the Program, program internal officials and experts in Canadian labour market programs. In total, 26 key informant interviewees were interviewed: 8 employers, 4 associations, 10 internal officials and 4 experts.

The interviewed employers were selected from the employers who consented to participate in interviews after completing the survey. These interviewees were chosen from diverse regions and industries. Notably, the majority were from the manufacturing industry, reflecting the predominant sector among consenting employers. No employers from the Atlantic provinces expressed consent to participate in the interviews from the survey pool.

Technical studies : Administrative data analysis

Two technical studies - 1 for employees and the other for employers--using administrative data, from 2013 to 2020, provided quantitative evidence for the 2 broad evaluation questions: Participation and Usage; and the effect of the Work-Sharing program on employee and employer outcomes.

Data for these analyses was extracted from the EI Status Vector file, the Records of Employment, Business Registry, the Canada Revenue Agency tax files (T4/T1), and applications and agreements stored in the Common System for Grants and Contributions system.

Technical report #1: work-Sharing Program and employees

The primary group under examination in this report were those employees who have received a Record of Employment and received EI benefits during a Work-Sharing agreement. The report provided empirical evidence related to, but not limited to:

Technical report #2: work-Sharing Program and employers

The primary group under examination in this report were those employers who started a Work-Sharing agreement at some point from 2013 to 2020.

The report provided empirical evidence related to, but not limited to:

Appendix E: Supplementary tables

Table 15: Comparison of demographic and claim related characteristics and outcomes between Work-Sharing and Regular benefit claimants, 2013 to 2020
Socio-demographic characteristics Work-Sharing claims (2013 to 2019) Work-Sharing claims (2020) Regular claims (2013 to 2019) Regular claims (2020)
Gender (male) 73.9% 64.5% 60.7% 50.8%
Age (years) 43.6 44.1 40.7 39.5
Region: Atlantic 1.8% 4.5% 12.6% 7.3%
Region: Quebec 29.0% 20.7% 27.3% 25.0%
Region: Ontario 27.3% 36.6% 30.8% 37.0%
Region: Prairies 36.0% 25.8% 18.2% 18.2%
Region: British Columbia 6.0% 12.4% 11.0% 12.4%
Industry: Primary 1.8% 1.3% 5.2% 2.7%
Industry: Construction 3.3% 2.2% 20.8% 10.5%
Industry: Manufacturing 72.9% 51.0% 12.1% 11.2%
Industry: Services 22.0% 45.4% 61.9% 75.7%
Occupation: Management 3.8% 9.2% 6.5% 6.3%
Occupation: Bus/Fin/Admin 12.8% 18.0% 12.2% 10.6%
Occupation: Sciences 10.8% 13.7% 5.6% 3.5%
Occupation: Sales and Services 3.6% 11.4% 16.3% 33.3%
Occupation: Trade and Transportation 26.3% 18.1% 32.3% 18.2%
Occupation: Manufacturing and Utilities 39.9% 24.5% 8.8% 12.4%
Occupation: Other 2.8% 5.2% 18.3% 15.7%
Marital status: Married/Common Law 66.7% 63.7% 51.4% 43.6%
Marital status: Widow/Divorced/Separated 10.4% 9.2% 11.8% 9.4%
Marital status: Single 22.9% 27.1% 36.8% 47.0%
Long Tenured 70.9% 71.1% 34.4% 36.1%
Employment Income $45,934 $61,070 $33,574 $28,490
Insurable Hours 1750 1749 1429 1438
Entitlement (weeks) 38 41 32 36
Benefit Rate $468 $533 $441 $509
Benefit Weeks Used 17.5 19.7 19.9 20.1
Benefit Amount Received $2,300 $2,796 $8,217 $9,955
Returned to Work 95% N/A 86.5% N/A
Returned to Same Business 75% N/A 36.4% N/A
Future EI Use (within 1 year)* 15% N/A 44.8% N/A
Total Claims 73,503 78,394 666,912 531,653
Table 16: Demographic profile of employee survey respondents
Demographic characteristics Survey data (#) Survey data (%) Admin data (%)
Gender: Female 159 39.0% 34.1%
Gender: Male 249 61.0% 65.9%
Age: 25 to 34 40 9.8% 21.7%
Age: 35 to 44 112 27.5% 24.6%
Age: 45 to 54 126 30.9% 27.1%
Age: 55 and over 130 31.9% 26.5%
Marital status: Married 222 54.4% N/A
Marital status: Common-law 64 15.7% N/A
Marital status: Widowed, Separated, Divorced 43 10.5% N/A
Marital status: Single 71 17.4% N/A
Marital status: Don't Know/Prefer not to say 8 2.0% N/A
Immigration status: Born in Canada 236 57.8% N/A
Immigration status: Born Outside Canada 172 42.2% N/A
Visible minority: Yes 79 19.4% N/A
Visible minority: No 303 74.3% N/A
Don't Know/Prefer not to say 26 6.4% N/A
Education: High school or less or its equivalent 91 22.3% N/A
Education: College, CEGEP or its equivalent (other than trades certificates or diploma) 94 23.0% N/A
Education: Trades certificate or diploma or its equivalent 62 15.2% N/A
Education: University certificate or diploma below bachelor level or its equivalent 40 9.8% N/A
Education: Bachelor's degree or higher 104 25.5% N/A
Education: Don't know/Prefer not to say 17 4.2% N/A
Total 408 100% 100%
Table 17: Closure regression at 1 and 4 years after the Work-Sharing agreement, 2013 to 2019
Explanatory variables Closure after 1 year Closure after 4 years
Year (Base = 2013) N/A N/A
2014 -0.000307 0.0109
2015 -0.000715 0.0997***
2016 -0.0111 0.430***
2017 -0.00725 N/A
2018 0.0307 N/A
2019 0.568*** N/A
Firms with multiple Work-Sharing agreements -0.0545* -0.219***
Number of Regular claims during the agreement 0.000153 0.000655**
Number of Work-Sharing claims during the agreement 0.000734*** 0.000765*
Number of other claims during the agreement -0.000287 -0.000253
Firm Size (Base= 0 to 19) N/A N/A
20 to 99 -0.0297*** -0.0779***
100 to 499 -0.0552*** -0.110***
500 and over -0.0565** -0.140***
Employment Income (Base = less than 25,000) N/A N/A
25,000 to 39,999 -0.0506*** -0.0506**
40,000 to 55,000 -0.0620*** -0.0812***
55,000 and over -0.00887 -0.0270
Province (Base = Ontario) N/A N/A
Atlantic provinces 0.00365 0.0689
Quebec 0.0132 0.0180
Prairies 0.0345*** 0.123***
British Columbia 0.0424** 0.0418
Other -0.00906 -0.125
Industry (Base = Services) N/A N/A
Manufacturing -0.0226 -0.0747***
Other -0.00488 -0.0183
Agreement duration 0.0014*** 0.0114***
Observations 3,500 2,838

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2025-08-13