Special measures to support businesses affected by US tariffs

At a glance

• The trade dispute between Canada and the US is causing economic uncertainty, leading to potential layoffs and disruptions.
• Special measures have been announced, including an expansion of the federal Work-Sharing Programme to support affected businesses.
• Helps employers avoid layoffs by reducing work hours and providing income support through Employment Insurance (EI) benefits.
• Includes businesses operating for one year, non-profits, cyclical / seasonal employers, and those with less than 10% decrease in activity.
• Maximum length of work-sharing agreements increased from 38 weeks to 76 weeks, with waived cooling-off periods.

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 realisation of US tariffs, including an expansion of the federal Work-Sharing Programme.

The Work-Sharing Programme 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 programme allows businesses to reduce work hours while providing income support to eligible employees through EI benefits. This structure enables businesses to retain their workforce while navigating economic uncertainty.

Work sharing agreements are not new and were utilised by some employers during the COVID-19 pandemic. However, effective 7 March 2025 (and until 6 March 2026), employers experiencing a decline in business activity attributable to the threat or potential realisation of US 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 US tariffs special measures announced on 7 March 2025, include:

• Expanding employer eligibility to include:
• Businesses that have been in operation in Canada for one year.
• Non-profit and charitable organisations experiencing a reduction in revenue levels as a direct or indirect result of the tariffs.
• Cyclical or seasonal employers.
• Employers experiencing a decrease in work activity over the past six months of less than 10% and allowing utilisation of work-sharing to exceed 60%.
• 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.
• 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 US tariffs special measures, please contact any member of the DLA Piper Canadian Employment and Labour Law Service Group listed here.