Backgrounder on Worker Retention Grant for Work-Sharing Employers

Ensuring the right Employment Insurance (EI) Work-Sharing supports are in place is crucial to helping Canadian employers and workers avoid layoffs during a time when the global landscape is rapidly changing leaving economies, businesses, and workers in a state of flux.

On February 17, 2026, the Government of Canada announced that applications are open for a new Worker Retention Grant for Work-Sharing Employers. The Grant allows employers with active Work-Sharing agreements to top up the income of participating employees who are working reduced hours and taking training. 

To be eligible for the new Worker Retention Grant, employers must have an approved and implemented Work‑Sharing agreement in place. Employers also need to commit to supporting vital and essential skills building and training opportunities for their workers for a minimum number of weeks of their Work-Sharing agreement or until the Grant ends on March 31, 2027, whichever is sooner. 

Despite increased use of the Work-Sharing program with the current temporary measures, some employers are concerned about potential impact on workforce retention, during a period of business transformation or restructuring. 

Through the new Grant, employers will be able to support their Work-Sharing employees to upskill and adapt to changing labour market needs, while enabling them to maintain income levels closer to their normal wages. With the Grant, income replacement of Work-Sharing employees who take training may increase from 55% to approximately 70% of their reduced income. This helps employers keep their skilled workforce while workers acquire valuable skills. 

Funded through an investment of $102.7 million, over two years, starting in 2025-2026, originally announced by the Prime Minister in November 2025, the new Grant will be available to Work-Sharing employers in all sectors and of all sizes. It is expected to help around 26,000 workers, including many in tariff-impacted steel, lumber and auto sectors. Employers will benefit from retaining skilled workers while they adjust their businesses to meet today’s economic reality.

The Government has a flexible approach to defining eligible training offerings under the Worker Retention Grant, taking into consideration that employers need to be able to choose training that is most relevant to their business operations, including those related to business recovery and worker retention. Training can be provided to the worker using an online platform or in person. Flexible formats include facilitator-led as arranged by the employer and/or include peer-to-peer training provided in the workplace during non-workdays:

Examples of eligible training include: 

• Training offerings that support vertical skills development specific to an employer’s operations. 

• Widely applicable foundational skills such as digital literacy, workplace safety, linguistic proficiency, problem-solving and numeracy. 

• Informal training such as on-the-job training and peer-to-peer knowledge transfer that builds meaningful skills and knowledge that could support professional growth.

To assist with identifying training options, employers and workers are encouraged to visit Job Bank, Canada’s national employment service, which has a dedicated section for work-sharing employers. In this section, Work-Sharing employers can explore Job Bank’s new Training Finder and connect to upskilling platforms from partner organizations for free to help their employees find training relevant to their industry and career goals. Thousands of courses of various durations are available.     

More information can be found on the Government’s Worker Retention Grant for Work-Sharing Employers webpage.

Work-Sharing Program and Existing Temporary Measures 

The EI’s Work-Sharing Program is a proven tool to help employers avert layoffs and keep workers on the job and contributing to the economy during periods of downturn. 

Under a Work-Sharing agreement, employers, employees (the union, if applicable) and Service Canada agree to reduce the employees’ work week. To help compensate for the hours not worked, eligible employees receive income support in the form of EI Work-Sharing benefits.

In March 2025, in response to the impact of tariffs, the Government of Canada put in place significant flexibilities under Work-Sharing to help more employers and workers access the supports they need to avoid mass layoffs and protect the Canadian economy.  

Work-Sharing applications roughly doubled in 2025 relative to the previous year, with more than 2,000 applications. Approximately 80% of all applications received referred to tariffs. Over 1,400 of these tariff-related applications have been approved, helping to prevent approximately 20,000 layoffs and affecting more than 52,000 workers.