How to Apply for the Work‑Sharing Program in Canada

By GrantHub Research Team · · Lire en français

How to Apply for the Work‑Sharing Program in Canada

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.


What Is the Work‑Sharing Program and Who Is It For?

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.

Employer eligibility

Your business must meet all of these conditions:

  • Operate in Canada for at least one year
  • Be a private business, public company, public corporation, or certain eligible non‑profits
  • Have a temporary decrease in business activity beyond your control
    • Examples: market slowdowns, supply chain issues, or tariff impacts
  • Have at least two EI‑eligible employees in the work‑sharing unit
  • Show that the downturn is temporary, not permanent or seasonal

Employee eligibility

Employees in the work‑sharing unit must:

  • Be eligible for EI
  • Agree to a minimum 10% reduction in their usual weekly earnings
  • Agree to share work equally with coworkers
  • Have union support, if a union is present

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.


How the Work‑Sharing Program Works

If your application is approved, you, your employees, and Service Canada sign a formal work‑sharing agreement.

Main features include:

  • Reduced hours: Employees work fewer hours each week
  • EI top‑up: EI pays benefits based on how much hours are reduced
  • Shared impact: All employees in the unit reduce hours by the same percentage
  • Temporary support: The agreement helps your business through a short downturn, not permanent changes

EI benefits paid through work sharing are taxable income for employees.


Step‑by‑Step: How to Apply for the Work‑Sharing Program in Canada

1. Confirm your downturn qualifies

Service Canada needs proof that your reduction in work is:

  • Temporary
  • Beyond your control
  • Likely to recover during the agreement period

Gather recent financial statements, sales forecasts, or contracts that show the slowdown.

2. Identify your work‑sharing unit

A work‑sharing unit is a group of employees who:

  • Do similar work
  • Share the same reduction in hours
  • Are all important to your recovery plan

Do not mix unrelated roles or departments in one unit.

3. Get employee (and union) agreement

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.

4. Complete the application package

You need to send:

  • The Work‑Sharing Agreement application form
  • A recovery plan explaining how your business will return to normal operations
  • Employee details and schedules

5. Apply through Service Canada

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.


Common Mistakes to Avoid

  1. Applying for seasonal slowdowns
    The program does not cover predictable off‑season reductions.

  2. Including ineligible employees
    Contractors and workers who are not eligible for EI cannot be part of a work‑sharing unit.

  3. Unequal hour reductions
    All employees in the unit must share the reduction equally. Uneven reductions can delay or stop approval.

  4. Weak recovery plans
    Plans without clear timelines or financial details often lead to rejection.


Frequently Asked Questions

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.


See Also

  • Federal vs Provincial Wage Subsidy Programs in Canada: Key Differences
  • Common Mistakes Employers Make When Applying for Wage Subsidy Grants
  • How to Use Wage Subsidy and Student Hiring Programs to Reduce Staffing Costs

Next Steps

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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