The federal government is introducing new measures to help mitigate the impact of the U.S. trade war on Canadian workers, as concerns over layoffs and economic repercussions grow.

The announcement came shortly after U.S. President Donald Trump revealed plans to impose new tariffs on Canadian dairy and lumber in the coming days.

Labour Minister Steve MacKinnon unveiled “temporary work-sharing measures,” which will take effect on Friday. He described the trade war, launched by Trump this week, as a moment of “maximum peril.”

A 25 percent tariff on all Canadian goods went into effect on Tuesday, before Trump announced a partial reprieve for certain goods under the Canada-United States-Mexico Agreement (CUSMA). In response, Canada implemented counter-tariffs on $30 billion worth of American goods, which will remain in place until all of Trump’s tariffs are lifted.

“In this moment of maximum peril, the likes we have never seen — from a friend and ally, no less — the federal government must stand tall and stand by fellow Canadians, and stand by we will,” MacKinnon said during a press conference in Ottawa.

As part of the new “mitigation” plan, Ottawa is expanding the existing work-sharing program to allow employers to reduce workers’ hours while still keeping them on payroll with income support.

This will help employers retain workers without having to resort to layoffs, MacKinnon explained. The federal government will also expand the program to include workers in for-profit and charitable sectors, as well as those in cyclical or seasonal jobs.

“We are moving ahead with these changes, despite yesterday’s pause, because businesses and workers need assurances right now,” MacKinnon added, emphasizing that the measures will remain in place for as long as needed.

What is the ‘Work-Sharing Program’?

The work-sharing program is funded through employment insurance benefits, which both workers and employers contribute to. Its goal is to prevent layoffs during periods of reduced business activity that are beyond the employer’s control, according to Employment and Social Development Canada.

Under this program, employees must agree to reduce their normal working hours by at least 10 percent and share the available work equally while the employer recovers.

These agreements can last from six to 26 weeks, with the possibility of extending them to 38 weeks. The new changes will increase the maximum length of agreements to 76 weeks.

The work-sharing program has previously been used to support businesses impacted by events like the wildfires in Jasper and the COVID-19 pandemic.

Additional Support for Businesses and Workers

In addition to the work-sharing measures, the government also announced other supports for Canadian businesses and workers. This includes $5 billion in funding over two years for Export Development Canada, aimed at helping Canadian exporters access new markets and navigate the challenges posed by U.S. tariffs.