Canada's $7.5 Billion Tariff Relief Package: What Every Business Owner Needs to Know — and How to Be Ready

Key takeaways

The Government of Canada has built and is launching new programming in response to upcoming tariff increases. A $7.5 billion package of relief programs has been put in place for Canadian workers and businesses affected by U.S. tariffs. The package covers four program areas with nine distinct measures — from workforce retention to emergency business loans.

Most programs require payroll documentation: hour tracking, ROEs, cost reports, and utilization data. On top of federal initiatives, Ontario and Québec each have additional provincial programs available alongside federal supports.

Getting your payroll processes right now determines whether you can access these programs — and how quickly. This article covers what you need to know and what’s available to you.

What we’ll cover in this article

• What is Canada's $7.5 Billion Tariff Relief Package?
• Program 1: What Is the Workforce Retention and Retraining Program (WRRP)?
• Program 2: What Is the Enhanced EI Work-Sharing Program?
• Program 3: What Are the EI Extensions Under the Tariff Relief Package?
• Program 4: What Financial Support Programs Are Available for SMEs?
• What tariff relief is available for Ontario businesses and workers?
• What provincial programs can Québec businesses access for tariff relief?
• What support is available for BC employers and workers affected by tariffs?
• What is Manitoba offering businesses and workers affected by U.S. tariffs?
• What workforce support is available for Saskatchewan employers impacted by tariffs?
• What tariff relief programs are available for Alberta businesses and workers?
• What Do All These Programs Have in Common? Payroll Readiness.
• Frequently Asked Questions

Running a business through a trade dispute isn't something most business owners plan for. Between managing your team, keeping clients, and watching margins, the last thing you need is to spend hours deciphering government program eligibility — or worse, miss out on support you actually qualify for because the paperwork wasn't in order. The good news: these programs are more accessible than they look, and the groundwork for most of them is already sitting in your payroll system. This article breaks it all down so you know exactly what's available, what it requires, and where to start.

What is Canada's $7.5 Billion Tariff Relief Package?

Canada's $7.5 billion tariff relief package is a federal government initiative announced on August 25, 2026, designed to protect workers and businesses from the economic impact of escalating U.S. tariffs. It builds onto the nearly $25 billion in supports delivered over the previous 18 months and introduces new and enhanced programs focused on workforce retention, employment insurance, and business liquidity.

The package covers four program areas with nine distinct measures. While the programs themselves are administered by federal departments — primarily Employment and Social Development Canada (ESDC) and  Innovation, Science and Economic Development Canada  (ISED) — the burden of eligibility falls squarely on employers. Most programs require documentation that lives in your payroll system: tracked hours, Records of Employment, workforce cost breakdowns, and weekly utilization reports.

This article walks through all nine measures, explains what each one requires from a payroll and HR administration standpoint, and covers what Ontario and Québec businesses can access beyond the federal programs.

Key numbers on Canada's tariff relief package:

• $7.5B — new and enhanced federal relief committed for workers and businesses affected by U.S. tariffs
• 9 distinct measures across 4 program areas
• $3.5B —  Rapid Response Supports for Workers and Employers, covering EI flexibilities, workplace training, and the new WRRP
• Up to 65 weeks — maximum EI regular benefits available to long-tenured workers under the extended measures, up from 45 weeks

Program 1: What Is the Workforce Retention and Retraining Program (WRRP)?

The Workforce Retention and Retraining Program (WRRP) is a new federal program that consolidates the existing EI Work-Sharing program and the Worker Retention Grant into a single, streamlined offering. Its purpose is to help employers reduce hours rather than headcount during periods of reduced business activity caused by tariffs — and to fund employee training in the process.

How does the WRRP work?

• Employees work reduced hours while collecting a blended paycheque: employer wages plus EI benefits to make up the difference.
• Employers are eligible for up to $1,000 per participant to cover training and administrative costs.
• The program runs up to 76 weeks and is now open to non-profit organizations, not just private-sector employers.

What does the WRRP require from your payroll system?

• Precise tracking of reduced hours for each employee, week by week.
• Weekly utilization reports in the format required by Service Canada.
• Blended pay calculations — separate tracking of employer wages and the EI top-up portion.
• Training documentation for reimbursement claims.
  
  

Ontario note: Ontario employers participating in the WRRP can also access the Canada–Ontario Workforce Tariff Response, which provides additional funding to upskill workers on reduced hours. See the Ontario section below.

Program 2: What Is the Enhanced EI Work-Sharing Program?

EI Work-Sharing is a long-standing federal program that has been significantly enhanced as part of the tariff relief package. It allows employers to reduce employee hours during a temporary business downturn while employees collect partial EI benefits to offset lost income — avoiding layoffs on both sides. As of February 28, 2026, work-sharing agreements have helped prevent nearly 20,000 layoffs.

What's new with the enhanced program?

• The maximum duration has been extended to 76 weeks.
• Non-profit organizations are now eligible.
• Application and reporting processes have been simplified.
  
  

What does EI Work-Sharing require from your payroll system?

• Timesheets that flow directly into payroll — any gap between recorded hours and payroll data creates problems with Service Canada audits.
• Weekly utilization reports submitted to Service Canada, tracking hours worked versus hours reduced per employee.
• Correctly issued Records of Employment (ROEs) for any employees who fully separate during the period.
• Analytics that can produce a workforce cost snapshot at any point — useful for audit and eligibility verification.

Note for accountants and bookkeepers: Work-Sharing clients will need help structuring their weekly reporting. Errors in hour tracking or ROE coding at this stage can delay or disqualify benefit payments for employees — and expose employers to compliance risk.

Program 3: What Are the EI Extensions Under the Tariff Relief Package?

The tariff relief EI extensions package extends and adds to a set of temporary EI flexibilities that were already in place. There are five measures in total — four extended and one brand new — each affecting how and when employees can access EI benefits after a separation. The measures are time-limited and apply specifically to separations connected to tariff-related business disruption.

Measure 1: Waiting Period Waived

The standard one-week waiting period before EI benefits begin has been waived and extended by one additional year. Employees who are laid off or separated can access benefits from day one of their claim.

Measure 2: Separation Pay — EI Without Exhausting Severance

Normally, employees must use up severance, vacation pay, and other separation payments before EI benefits kick in. That requirement is suspended for another year, meaning employees who receive a severance package can collect EI at the same time.

Measure 3: Long-Tenured Workers — 20 Extra Weeks

Long-tenured workers — those with significant employment history and limited prior EI use — are eligible for up to 20 additional weeks of EI regular benefits. This temporary measure has been extended by eight months.

Measure 4: Voluntary Quit — No Longer Penalized (NEW)

This is the only brand-new measure in the package. Workers who voluntarily left jobs in recent months will no longer be penalized when accessing EI, provided their most recent job loss was through no fault of their own. This measure runs for one year.

Measure 5: JobBank Matching

The federal government is increasing supports to match workers with available jobs through JobBank.gc.ca, with emphasis on opportunities tied to major infrastructure and defence procurement projects.

Why do EI Extensions create payroll compliance risk?

Every one of these five measures depends on a correctly issued Record of Employment. The ROE code determines which benefits an employee can access — and the wrong code can block an employee from collecting the benefits they're entitled to under the new rules. The voluntary quit measure carries the highest error risk, since it requires accurate documentation of the circumstances of the separation.

Note for accountants and bookkeepers: ROE errors are one of the most common compliance issues in payroll. With five overlapping EI measures now in play, verify ROE codes carefully for any client processing separations right now.

Program 4: What Financial Support Programs Are Available for SMEs?

The tariff relief financial support program includes three financial support streams for businesses facing direct economic pressure from tariffs. Unlike the workforce programs above, these are loan and grant programs requiring payroll cost documentation as part of the application and audit process – accurate payroll records are a prerequisite for access.

Regional Tariff Response Initiative — $1.5 Billion

Delivered through Canada's seven Regional Development Agencies (RDAs), this program supports SMEs with both capital investment and demonstrated liquidity needs. The non-repayable contribution cap has been increased from $1 million to $3 million, with liquidity support available up to $2 million.

BDC Pivot to Grow — $500 Million

A new liquidity stream through the Business Development Bank of Canada for businesses facing immediate cash-flow shortfalls. Loans range from $250,000 to $5 million with interest-only payments over 36 months. The minimum annual revenue requirement has been lowered to $1 million.

Canada Strong Diversification Fund — $2 Billion

A new stream of the existing Strategic Response Fund, this program supports tariff-affected businesses with shovel-ready capital maintenance projects. It is designed for medium-sized firms and works closely with Regional Development Agency programming for intake and triage.

What do financial support programs require from your payroll system?

• Payroll cost data — lenders and program administrators want to see your true per-employee cost before approving applications.
• Headcount reports showing workforce size over time.
• Project-code allocation for businesses with multiple locations or business numbers.
• Analytics exports — many applications require data summaries in standard formats.
  
  

Note for accountants and bookkeepers: Your clients applying for these programs will need clean, exportable payroll data. If their payroll system can't produce a clear workforce cost summary or multi-location breakdown, you may need to reconstruct that data manually — which adds time and introduces risk.

There's a lot to take in — and a lot riding on getting it right. If you're not sure whether your current payroll setup can handle the reporting, hour tracking, or ROE requirements these programs demand, we can show you exactly where you stand. Reserve your spot at our HR Compliance Webinar — just a clear picture of what's possible.

Financial Support Programs available to SMEs across Canada 

What tariff relief is available for Ontario businesses and workers?

Ontario businesses have access to an additional layer of support through the Canada–Ontario Workforce Tariff Response, a joint $228.8 million initiative announced in March 2026. The program is delivered through Ontario's established network of employment and training services and is specifically designed to help workers in tariff-affected sectors — including softwood lumber, steel, and automotive — retrain and upskill.

• Approximately 27,000 Ontario workers are expected to benefit over three years.
• Support is available to unemployed workers, employees in Work-Sharing agreements, and employed workers in directly affected industries.
• Delivered in part through Skills Advance Ontario (SAO), with applications accepted on an ongoing basis.
• Sectors with specific callouts include health care, skilled trades, clean energy, and natural resources.

Ontario employers already participating in the WRRP or EI Work-Sharing can layer this funding on top to cover retraining costs for employees on reduced hours.

What provincial programs can Québec businesses access for tariff relief?

Québec businesses have access to a suite of provincial programs administered through Investissement Québec and Services Québec, covering liquidity, workforce training, market diversification, and productivity. These programs sit alongside — and can be combined with — the federal supports described above.

Workforce Training — Initiative de formation sur mesure

The most directly relevant program for tariff-affected Québec employers is the custom workforce training initiative designed specifically for businesses impacted by U.S. tariffs. It helps employers develop and strengthen employee skills, and supports strategies for diversifying into markets beyond the United States. Employers access this program through a Services Québec business advisor and payroll administration is key to that access: tracking training hours, managing employees on reduced schedules, and documenting participation.

Liquidity Support for SMEs

Both programs require businesses to demonstrate financial impact — payroll cost data and headcount documentation will be central to those applications.

• FORCE: for manufacturers and primary-sector businesses with revenue of $2M or more facing 25%+ tariffs. Provides temporary liquidity to help businesses adjust their model or supply chain, administered through Investissement Québec.
• PAUPME: for SMEs with revenue between $200,000 and $2 million directly affected by U.S. tariffs. Provides liquidity support to help businesses continue operating and adapt.

Market Diversification and Growth Programs

Québec also offers programs for businesses looking to diversify beyond the U.S. market, including Panorama (working capital for Canadian and international sales growth), PSCE (commercialization and export support), and suite of provincial programs (manufacturing productivity and innovation). These are more sector-specific, but worth flagging to clients in manufacturing, forestry, or export-heavy industries.

What support is available for BC employers and workers affected by tariffs?

BC has centralized its tariff response, including federal and provincial programs for workers and businesses. For employers, the most relevant supports include access to EI Work-Sharing, skills training funding of up to $3,500 per worker for high-demand jobs, and free employment services for tariff-affected staff. BC is also leading national efforts on interprovincial labour mobility, which matters for employers managing workforce shifts across provinces.

What is Manitoba offering businesses and workers affected by U.S. tariffs?

Manitoba announced more than $100 million in supports on August 28, 2026, including a $50 million Trade Resilience Loan Program, $13.7 million in wage subsidies through the Tariff Workforce Stabilization and Youth Employment Program, and a deferral of provincially administered tax payments — including payroll tax — from September 1 to December 31, 2026. That payroll tax deferral is the most immediately practical measure for employers managing cash flow through a difficult period.

What workforce support is available for Saskatchewan employers impacted by tariffs?

Saskatchewan and the federal government have invested $15.6 million over three years through the Canada–Saskatchewan Workforce Tariff Response to support workers and employers in steel, softwood lumber, and other tariff-affected sectors — with a focus on upskilling workers in Work-Sharing agreements and helping employers adapt. Saskatchewan businesses can also access federal RTRI funding through PrairiesCan.

What tariff relief programs are available for Alberta businesses and workers?

Canada and Alberta announced a Workforce Tariff Response partnership in May 2026, part of the federal government's $570 million national investment to help up to 66,000 workers in tariff-affected industries retrain and upskill. Alberta employers can also access federal programs including EI Work-Sharing and the WRRP directly — no separate provincial program is required.

What Do All These Programs Have in Common? Payroll Readiness.

Across all four program areas and nine measures — federal and provincial — there is a consistent requirement: your payroll data needs to be accurate, accessible, and structured in a way that government systems and program administrators can actually use.

That means:

• Hours tracked in real time — not reconstructed after the fact.
• Timesheets connected directly to payroll, with no manual rekeying that creates discrepancy.
• ROEs generated accurately, validated, and submitted electronically.
• Workforce cost data that can be exported cleanly for loan applications and audits.
• Scheduling that reflects actual reduced hours, not standard templates.

If your payroll processes are fragmented — spreadsheets here, manual records there — the administrative burden of applying for these programs can quickly outweigh the benefit. Getting your systems in order now, before you apply, is the single most important step you can take.

If any of this feels familiar — spreadsheets that don't talk to each other, hours reconstructed after the fact, ROEs issued manually — you're not alone, and it's not too late to get things in order. Several of these programs have deadlines approaching, and the sooner your payroll foundation is solid, the sooner you can focus on your business instead of your paperwork. See our limited time offer.

Frequently Asked Questions

Who is eligible for the Workforce Retention and Retraining Program (WRRP)?

Canadian employers — including non-profits — whose business activity has been directly reduced by U.S. tariffs may be eligible for the WRRP. Employees must be eligible for EI. The program allows employers to reduce employee hours rather than lay off workers, while accessing EI benefits and up to $1,000 per participant in training funding.

What is the difference between the WRRP and EI Work-Sharing?

The WRRP consolidates the former EI Work-Sharing program and the Worker Retention Grant into a single offering. Existing Work-Sharing flexibilities continue under the WRRP, and employers also become eligible for training and administrative funding of up to $1,000 per participant — something the standalone Work-Sharing program did not include.

What are the new EI measures under the tariff relief package?

The package extends four existing temporary EI measures (waived waiting period, separation pay flexibility, 20 extra weeks for long-tenured workers, and enhanced JobBank matching) and introduces one new measure: workers who voluntarily quit jobs in recent months will no longer be penalized when accessing EI, provided their most recent job loss was not their fault.

What financial support is available for small businesses?

Small and medium-sized enterprises can access three federal financial streams: the Regional Tariff Response Initiative (up to $3 million non-repayable), the BDC Pivot to Grow loan program ($250,000 to $5 million, interest-only over 36 months), and the Canada Strong Diversification Fund ($2 billion for capital maintenance projects). Québec SMEs can also access FORCE and PAUPME through Investissement Québec. All programs require payroll cost documentation.

What payroll documentation is required to apply for tariff relief programs?

Requirements vary by program, but most require some combination of: tracked hours per employee by week, weekly utilization reports in Service Canada format, Records of Employment (ROEs) with correct reason codes, payroll cost breakdowns by location or project, and headcount reports. Having these readily available from your payroll system significantly reduces application time.

Is there additional support available in Ontario?

Yes. Ontario businesses can access the Canada–Ontario Workforce Tariff Response — a joint $228.8 million initiative that funds retraining and upskilling for tariff-affected workers. It is available to unemployed workers, employees in Work-Sharing agreements, and employed workers in affected industries. Applications are accepted on an ongoing basis through Skills Advance Ontario.

What programs are available specifically for Québec businesses?

Québec businesses can access provincial programs through Investissement Québec and Services Québec, including FORCE (liquidity for manufacturers with $2M+ revenue), PAUPME (liquidity for SMEs with $200K–$2M revenue), and a custom workforce training initiative for tariff-affected employers. Full details are at Québec.ca.

Can non-profits participate in these programs?

Yes. Non-profit organizations are now explicitly eligible for both the WRRP and the enhanced EI Work-Sharing program — an expansion from previous versions of these programs, which were limited to private-sector employers.

Accessing these programs starts with having accurate payroll records in place — and navigating all of it on top of running a business isn't easy. Payworks helps you track hours, generate ROEs, and produce the cost reports most programs require, so when a program becomes available, you're not scrambling to pull documentation together. If you'd like to see how it works or walk through these programs with an expert, we'd love to help. Reserve your spot at our HR Compliance Webinar.