When your business faces a drop in revenue and layoffs seem likely, the Work‑Sharing Program in Canada offers a different solution. This federal program lets you reduce employee hours for a short time. Employees get Employment Insurance (EI) to help replace some lost wages. It helps businesses keep skilled staff during short downturns.
The Work‑Sharing Program is managed by Employment and Social Development Canada (ESDC) through the EI system. Instead of layoffs, you and your team agree to share reduced hours. EI pays employees a partial benefit to help with lower earnings.
Your business must meet all of these conditions:
Employees in the work‑sharing unit must:
From March 7, 2025, to March 6, 2026, special rules apply for businesses affected by tariffs. These rules give more flexibility in the Work‑Sharing Program.
If your application is approved, you, your employees, and Service Canada sign a formal work‑sharing agreement.
Main features include:
EI benefits paid through work sharing are taxable income for employees.
Service Canada needs proof that your reduction in work is:
Gather recent financial statements, sales forecasts, or contracts that show the slowdown.
A work‑sharing unit is a group of employees who:
Do not mix unrelated roles or departments in one unit.
Participation is voluntary. Every employee in the unit — and the union, if you have one — must agree in writing to reduced hours and EI participation.
You need to send:
Send your application to Service Canada. Processing times can vary, so apply as soon as you see signs of a downturn.
Tools like GrantHub’s eligibility matcher can help you check if the Work‑Sharing Program or other wage support programs fit your business before you apply.
Applying for seasonal slowdowns
The program does not cover predictable off‑season reductions.
Including ineligible employees
Contractors and workers who are not eligible for EI cannot be part of a work‑sharing unit.
Unequal hour reductions
All employees in the unit must share the reduction equally. Uneven reductions can delay or stop approval.
Weak recovery plans
Plans without clear timelines or financial details often lead to rejection.
Q: How long can a work‑sharing agreement last?
Agreements are time‑limited. Extensions are sometimes possible. Special rules may give more flexibility for businesses affected by tariffs between March 2025 and March 2026.
Q: Do employees receive EI while working reduced hours?
Yes. Employees get EI benefits to replace part of their income lost from reduced hours. The amount depends on how much their hours are reduced.
Q: What counts as a temporary decrease in business activity?
Examples include sudden market drops, losing a major contract, supply chain problems, or tariff impacts. Permanent or structural declines do not qualify.
Q: Can non‑profit organizations apply?
Some non‑profits can apply, depending on their structure and how they earn revenue. Service Canada reviews each case.
Q: Is the Work‑Sharing Program taxable?
Yes. EI benefits paid to employees under work sharing are taxable income.
If you want to use the Work‑Sharing Program in Canada, pay attention to timing and eligibility. GrantHub tracks wage support programs across Canada, helping you see which options fit your workforce and region before making staffing decisions.
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