Canada Launches $102.7M Worker Retention Grant: What Employers Need To Know
February 18, 2026 · 3 min read
Claire Cummings
$102.7 Million to Keep Workers on Payroll
On February 17, 2026, the Government of Canada announced immediate applications for its new $102.7 million Worker Retention Grant. This two-year federal initiative dramatically increases wage support for employers with Work-Sharing agreements, now letting businesses and nonprofits top up employee wages to around 70% (up from 55%) of lost income during dedicated training periods. For small businesses and organizations facing disruptions—like those from tariffs and supply chain shocks—this could be the difference between layoffs and resilience.
Tariffs, Layoffs, and the Case for Reskilling
The Worker Retention Grant is a direct response to mounting pressures in manufacturing and resource sectors. Throughout 2025, Work-Sharing applications doubled (over 2,000), driven mainly by tariffs on steel, lumber, and automobiles—industries at the heart of Canada’s economy (one-third of GDP, ~8 million jobs). Work-Sharing, which allows employers to reduce worker hours and avoid layoffs by accessing partial EI support, has already prevented an estimated 20,000 layoffs among 52,000+ workers.
But as businesses seek long-term solutions, government and industry alike are recognizing training is just as critical as immediate wage relief. Upskilling—especially in digital, technical, and safety areas—is now being positioned as a pillar of both retention and Canada’s broader transformation toward a more resilient, sustainable workforce. This new grant, part of a $570 million reskilling strategy championed by Prime Minister Mark Carney, aims to address skills gaps while cushioning workers from economic shocks.
Key sectoral groups and labor organizations like Unifor have publicly praised the move, with Minister Patty Hajdu calling the program an investment that “empowers Canadian workers with the skills they need to adapt.”
What the Grant Means for Employers and Workers
For Employers (Small Businesses, Nonprofits, and Large Firms):
- Broader Eligibility: Any size and sector can participate if they have an active Work-Sharing agreement and commit to scheduled training—whether it’s digital upskilling, job safety, or peer-to-peer learning.
- Increased Wage Replacement: Now up to 70% for wages lost due to reduced hours, compared to the previous 55%, for the duration of both the Work-Sharing agreement and associated training, through March 31, 2027.
- Flexible Training: Employers can tailor support, choosing from a new Training Finder tool on the Job Bank, and are encouraged to use free or low-cost training providers.
- Critical Timing: With many Work-Sharing agreements already in place (especially in hardest-hit sectors), rapid application is advised. Experts and media outlets stress the benefit of "retaining talent now while upskilling for the longer term."
For Workers:
- Higher Income Stability: More robust income supports during reduced workweeks mean more security while building new skills.
- Eye On Growth Sectors: With an emphasis on digital and advanced manufacturing skills, participation builds resume strength and future job security.
For Communities:
- Layoff Prevention: The program is expected to support about 26,000 workers, helping provincial economies buffer against job losses and improve long-term competitiveness in the face of global market pressures.
Steps to Take Now
- **Check Your Eligibility: ** Confirm if your organization has (or could establish) an active Work-Sharing agreement with Employment and Social Development Canada (ESDC).
- **Explore Training Options: ** Use the new Training Finder tool for free/low-cost courses that fit your industry and workforce needs.
- Prepare Application Materials: Gather Work-Sharing and training plans, wage information, and employee details in advance to speed up your grant application.
- Apply Immediately: Funding is first-come, first-served. Applications will be accepted until March 31, 2027—or until funds are exhausted. Begin your application process via ESDC's portal.
- Engage Workers: Clearly communicate with staff about the program’s benefits and what to expect—increased training and higher wage support during the adjustment period.
Staying Ahead in a Changing Landscape
With over $100 million specifically set aside for wage and training support, the Worker Retention Grant marks a potentially transformative period for Canadian employers coping with external shocks. As further details, success stories, and provincial implementation updates emerge, organizations should watch for new guidance from ESDC and consider proactively budgeting for ongoing upskilling through 2027. The policy’s welcome reception indicates more such investments could be on the horizon, especially as Canada aims to bolster its workforce for economic transformation.
Granted AI helps organizations navigate new funding streams and maximize competitive applications with tailored intelligence and writing tools.
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