Canadian Federal Government announces special measures to support businesses amid U.S. tariff threats in moment of “maximum of peril”

As the trade dispute between Canada and the United States intensifies, businesses and workers across the country are facing mounting uncertainty, with the risk of layoffs and economic disruption continuing to grow. In response, the federal government has announced special measures to support businesses affected by the threat or potential realization of U.S. tariffs, including an expansion of the federal Work-Sharing Program.

The Work-Sharing Program is a federal initiative designed to help eligible employers avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. Through a three-party agreement between employers, employees, and Service Canada, the program allows businesses to reduce work hours while providing income support to eligible employees through Employment Insurance (EI) benefits. This structure enables businesses to retain their workforce while navigating economic uncertainty.

Work sharing agreements are not new and were utilized by some employers during the COVID-19 pandemic. However, effective March 7, 2025 (and until March 6, 2026), employers experiencing a decline in business activity attributable to the threat or potential realization of U.S. tariffs may be eligible for the work-sharing special measures if they are operating in Canada for a minimum of one year and have a minimum of two EI eligible employees who agree to a reduction in hours and to share any available work.

The work-sharing U.S. tariffs special measures announced on March 7, 2025, include:

• expanding employer eligibility to include:
  • businesses that have been in operation in Canada for one year;
  • onon-profit and charitable organizations experiencing a reduction in revenue levels as a direct or indirect result of the tariffs;
  • cyclical or seasonal employers; and
  • employers experiencing a decrease in work activity over the past six months of less than 10 percent and allowing utilization of work-sharing to exceed 60 percent.
• extending the maximum length of work-sharing agreements from 38 weeks to 76 weeks;
• waiving the required cooling-off period between successive work-sharing agreements while special measures are in place; and
• expanding employee eligibility to employees who are not year-round, permanent, full-time or part-time employees, specifically seasonal or cyclical employees, and employees assisting the employer recovery efforts.

For further information or inquiries pertaining to the Working Sharing Program and the U.S. tariffs special measures, please contact any member of the DLA Piper Canadian Employment and Labour Law Service Group listed here.