If your business is facing temporary slowdowns due to tariffs, supply chain issues, or economic uncertainty, you now have a powerful new tool to avoid layoffs.
The Worker Retention Grant (WRG) , launched by Employment and Social Development Canada (ESDC) on February 17, 2026, provides direct funding to employers who are already participating in the Work‑Sharing program .
This grant allows you to top up the income of employees who are working reduced hours while participating in training.
The result? Your workers keep more of their paycheque, and your business emerges from the downturn with a more skilled, loyal workforce.
Here is everything you need to know about eligibility, funding amounts, and how to apply before the December 31, 2026 deadline.
What Is the Worker Retention Grant?
The Worker Retention Grant is a $102.7 million federal investment over two years (2025‑2026 to 2026‑2027) designed to support workforce retention and skills development during temporary economic disruptions .
It builds directly on the existing Work‑Sharing Program, which allows employers to temporarily reduce employee work hours while workers receive Employment Insurance (EI) benefits for the hours not worked .
Here is what the Grant does differently: It adds a weekly income top‑up for employees who participate in training during their reduced‑work weeks.
This top‑up raises the employee’s income replacement rate from the standard EI level of 55% to approximately 70% of their normal wages .
For employers, the Grant creates a financial incentive to retool and reskill workers rather than resorting to permanent layoffs when tariffs or broader economic pressures hit .
Who Can Apply?
To be eligible for the Worker Retention Grant, you must meet the following criteria :
- Have an approved and implemented Work‑Sharing agreement in place with Service Canada.
- Commit to fostering training opportunities for your EI‑eligible Work‑Sharing employees.
- Offer training for at least 40% of the weeks covered by the Grant agreement (for example, 15 weeks of training offerings for a 38‑week agreement).
- Declare any amounts owing and in default to the Government of Canada.
Ineligible Employers
You cannot apply for the Grant if you :
- Operate solely to administer a government program or activity (e.g., municipalities, crown corporations)
- Are self‑employed
Eligible Employees
To receive the income top‑up, an employee must :
- Meet the eligibility criteria for the Work‑Sharing Program
- Be participating in an active Work‑Sharing agreement
- Be in receipt of EI Work‑Sharing benefits
Important: You cannot apply for the Grant before implementing your Work‑Sharing agreement. You must have an active agreement in place first .
How Much Funding Is Available?
Funding amounts vary depending on your specific Work‑Sharing agreement, including :
- The number of participating employees
- The duration of the agreement
- The percentage reduction in work hours
The Grant covers two specific costs :
- The income supplement paid to eligible employees
- Mandatory Employment Related Costs (employer portion of EI premiums and CPP/QPP contributions on the supplement)
What the Grant Does NOT Cover
The Grant is strictly for the income top‑up to employees. It does not cover training‑related costs such as :
- Professional fees or management consulting
- Travel and accommodation
- Materials, supplies, or venue logistics
- Virtual platform licenses or printing participant materials
However, you can self‑fund these training costs or explore other funding sources, including recent investments under the Workforce Tariff Response .
What Counts as Eligible Training?
The Worker Retention Grant takes a flexible approach to defining eligible training. You can choose training most relevant to your business operations .
Examples of eligible training include:
- Skills development specific to your operations (upskilling/reskilling)
- Foundational skills such as digital literacy, AI literacy, workplace safety, problem‑solving, and numeracy
- Informal training such as on‑the‑job training and peer‑to‑peer knowledge transfer
- Training that supports sector growth and expansion into new markets
Delivery formats allowed:
- Online or in‑person
- Facilitator‑led sessions arranged by the employer
- Peer‑to‑peer training conducted in the workplace during non‑work hours
Ineligible Training
You cannot use the Grant to support :
- Attending conferences
- Training that employers are legally required to provide
The Work‑Sharing Program: A Quick Refresher
Before you can access the Worker Retention Grant, you need to understand—or already be enrolled in—the Work‑Sharing Program itself.
Work‑Sharing is a three‑party agreement between employers, employees (or their union), and Service Canada . It helps avoid layoffs when there is a temporary decrease in business activity beyond the employer’s control.
How It Works:
- Employers reduce employee work hours by 10% to 60%
- Eligible employees receive EI benefits for the hours not worked
- Everyone in the Work‑Sharing unit shares the available work equally
Standard Agreement Duration:
- Minimum: 6 weeks
- Initial maximum: 26 weeks
- With extension: Up to 38 weeks
Tariff Special Measures (Extended to March 31, 2027)
Due to ongoing tariff impacts, the government has introduced significant flexibilities for affected businesses :
| Feature | Standard Rules | Tariff Special Measures |
| Maximum agreement length | 38 weeks | 76 weeks |
| Cooling‑off period | Required (length of previous agreement) | Waived |
| Employer operating history | 2 years | 1 year |
| Eligibility | Year‑round permanent staff only | Includes seasonal/cyclical employees |
If your business has been impacted by tariffs (directly or indirectly), you may qualify for these expanded measures. Non‑profit and charitable organizations experiencing reduced revenues due to tariffs are also eligible .
Application Period and Deadlines
- Application period: February 16, 2026, to December 31, 2026, at 3:00 p.m. EST
- Grant completion deadline: All projects must be completed by March 31, 2027
- Enquiries accepted until: December 30, 2026, at 12:00 p.m. EST
Processing time: Applications are assessed on an ongoing basis. You can apply to start receiving the Grant as of the Sunday following submission or the implementation date of your Work‑Sharing application—whichever is later .
How to Apply
Step 1: Ensure You Have an Active Work‑Sharing Agreement
If you do not already have a Work‑Sharing agreement, apply for one first through Service Canada. A Work‑Sharing agreement is considered implemented when the employer has notified ESDC of the week in which all members of the unit have had a minimum 10% reduction in work .
Step 2: Prepare Your Application
You will need :
- Your Work‑Sharing agreement number
- Average weekly earnings for each employee in the Work‑Sharing unit
- The EI benefit rate for each employee
- Total number of weeks requested for your Grant period
- An attestation committing to training opportunities for at least 40% of the weeks
- Declaration of any amounts owing to the Government of Canada
You will also need to complete the Worker Retention Grant Calculator (an Excel form) to estimate your funding amount. If you have more than 100 employees, contact ESDC for a larger file .
Step 3: Submit Your Application
Online (recommended): Use the Grants and Contributions Online Services (GCOS) portal .
By email: Send your application to edsc.dgop.dmpj.smet-wrg.wdy.pob.esdc@servicecanada.gc.ca .
Note for Alberta and Quebec: If your project is selected for funding, you may be required to obtain provincial approval before accepting federal funds :
- Alberta: Consult the Provincial Priorities Act (Bill 18)
- Quebec: Consult the Act respecting the Ministère du Conseil exécutif
Finding Training: Free Resources Available
To help you identify training options, the government has created a dedicated section on Job Bank for Work‑Sharing employers. You can access the new Training Finder and connect to upskilling platforms from partner organizations—including thousands of low‑cost or no‑cost courses .
Why This Matters: The Bigger Picture
The Worker Retention Grant is part of a broader federal response to tariff‑related disruptions and labour market pressures. Between 2025 and 2026 :
- Work‑Sharing applications doubled compared to the previous year
- Over 2,000 applications were submitted
- Approximately 80% of applications referred to tariffs
- More than 1,500 tariff‑related agreements have been approved
- These approvals helped prevent approximately 20,000 layoffs and affected over 52,000 workers
The Grant is expected to help around 26,000 workers across sectors including steel, lumber, auto parts, advanced manufacturing, transportation, energy, and mining .
Contact Information
General Enquiries & Program Support:
- Email: edsc.dgop.dmpj.smet-wrg.wdy.pob.esdc@servicecanada.gc.ca
- Phone (Employer Contact Centre): 1-800-367-5693 (Canada & US)
- TTY: 1-855-881-9874
Technical Help (GCOS portal):
- Email: NA-GCOS-SELSC-GD@hrsdc-rhdcc.gc.ca
Work‑Sharing Tariff Special Measures Enquiries:
- Email: edsc.dgop.tp.rep-res.ws.pob.esdc@servicecanada.gc.ca
Final Advice
If your business is facing a temporary downturn—particularly due to tariffs—do not wait until layoffs seem inevitable.
The Work‑Sharing Program, combined with the Worker Retention Grant, offers a proven alternative that protects both your workforce and your bottom line. With the application window closing on December 31, 2026, and funding available on a continuous basis, early applicants will have the best chance of securing support before the deadline.
Start by contacting Service Canada to explore whether a Work‑Sharing agreement is right for your business. Once approved, apply for the Grant to unlock the training top‑up and keep your employees earning closer to their full wages while they build skills for the future.
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