Executive summary

The Ontario government is taking further action to protect Ontario workers by expanding training and employment supports for those impacted by tariffs and global trade disruptions. Through a $228.8 million investment from the Government of Canada over the next 3 years, Ontario will deliver the Canada-Ontario Workforce Tariff Response, helping up to 27,000 workers across the province retrain, upgrade their skills and stay competitive in key sectors of the economy, including softwood lumber, steel and automotive manufacturing.

This investment is intended to support laid-off and unemployed workers seeking new skills for in-demand jobs, employees whose workplaces are participating in Employment Insurance (EI) Work‑Sharing agreements and workers who need additional skills training to adapt and stay competitive within companies directly impacted by tariffs, or within communities that rely heavily on those industries.The Canada-Ontario Workforce Tariff response funding of approximately $30.2 million for 2025-2026 supplements the Labour Market Development Agreement (LMDA) base funding of approximately $644 million in providing support to workers, businesses and communities across Ontario.

As part of this initiative, Ontario will deliver targeted programs through Skills Advance Ontario (SAO), which helps workers stay employed, upgrade their skills and move into new in-demand jobs, while helping employers retain experienced staff during periods of economic uncertainty. In addition, SAO will support workforce development in high‑growth sectors such as health care, skilled trades, energy and natural resources.

Strategic introduction

U.S. tariffs pose a major threat to Ontario’s economy, with 285,000 jobs—3.5% of provincial employment—linked to U.S. exports. Outcomes of negotiations to extend the Canada–United States–Mexico Agreement (CUSMA/USMCA) in 2026 could further exacerbate current tariff impacts.  

Steel

Tariffs doubled to 50% in June 2025, sharply reducing export competitiveness and driving a 10.2% decline in merchandise exports in Q2. Layoffs remain limited, but risks of widespread disruption loom given highly integrated supply chains. Workers in impacted regions face displacement risks. 

Softwood lumber

Tariffs rising from 14.40% to 35.16% as of August 2025 have added about $100 per 1,000 board feet, eroding competitiveness and creating uncertainty through a Section 232 investigation. Impacts include higher costs, temporary mill shutdowns, and job insecurity for 44,800 workers. Displaced workers will need retraining and transition support.

Manufacturing

Representing 11% of gross domestic product (GDP), the sector has seen real GDP fall nearly 10% since 2023, with steep losses in autos, machinery, and metals. Employment is down 20,600 jobs, and EI claims saw a brief spring surge. Tariffs are expected to deepen declines, with an 8% GDP reduction forecast for 2026. 

Implications, challenges and opportunities

Priorities include supporting workers and employers in adapting to economic disruption and labour market change. This includes retraining or reskilling long-tenured workers, supporting career transitions between jobs and sectors, and investing in projects that respond to local and regional labour market needs.

Particular attention is placed on:

  • supporting workers in single‑employer communities and regions heavily reliant on a single sector, where labour market disruptions can have significant and widespread impact
  • strengthening skills, improving workforce mobility, and helping employers retain and redeploy experienced workers remain central to building a resilient and adaptable workforce

Description of planned programs/activities

Adjustment Advisory Program / Rapid Re-employment and Training Service (AAP/RRTS) — Protect Ontario Workers Employment Response (POWER) Centres

This is a modification to an existing program.

Projected new AAP/RRTS – POWER Centres expenditures from the Workforce Tariff Response funding:  $3,400,000

Program start date: Ongoing

Program end date: Ongoing

Planned description of program (including relevant projects and activities) – areas of focus

The RRTS is initiated by Ontario to provide an immediate and appropriate response when large scale layoffs or closures occur. The first step of the RRTS process is to ‘triage’ the situation to determine the best course of action.

Rapid Re-employment and Training Services (RRTS)

Rapid Re-employment and Training Service services may include:

  • information sessions about Employment Insurance (EI) through Service Canada
  • educational outreach to provide information about and referrals to Employment Ontario (EO) programs and services
  • information sessions where local employers looking to fill vacant positions can partner with the ministry and/or the Integrated Employment Services and Employment Ontario networks
  • coordination with other stakeholders, including broader intergovernmental involvement or a Rapid Response Team
Rapid Re-employment and Training Services process

The RRTS process rapidly connects impacted workers with the relevant Employment Ontario programs and services to help them regain employment as quickly as possible. During the RRTS process, it may be determined that the Adjustment Advisory Program (AAP) is the most appropriate intervention to address the adjustment situation.

Adjustment Advisory Program (AAP)

AAP supports impacted workers, employers, sector and communities affected by economic and labour market change. Under the AAP, Ontario provides funds to organizations to establish an adjustment committee formed by employers, employees, union representatives (if applicable), Employment Ontario service providers, Service System Managers for Integrated Employment Services, and community and sector stakeholders.  

Power Centres

In some adjustment situations, an Adjustment Committee may recommend the creation of a POWER (Protect Ontario Workers Employment Response) Centre. POWER Centres are designed to address a community need and support individuals who have lost employment. POWER Centres offer individuals with support looking for work, access to digital resources, facilitate short-term training and skills development, and make referrals to employment and training services.

POWER Centre activities include:

  • post-employment transition supports
  • targeted training referrals
  • worker assistance
  • access to Employment Ontario programs
  • access to digital learning and career planning tools such as online courses
  • Service Canada connections
  • financial counselling

Target client groups/recipients: Unemployed

Planned benefits of program

  • Help laid-off workers deal with the effects of losing their jobs and help them review their options and plan their next steps, with a focus on helping them transition into employment, self-employment, and/or education or training, or retirement.  
  • Help communities anticipate and manage the labour market changes affecting them. 
  • Help employers/sectors effectively adapt to the changing labour market. 

Program outcomes

This program will be supported by the Canada-Ontario Workforce Tariff Response funding in 2025-2026 in addition to other federal and provincial funding. For program outcomes as a whole, these centres are planned to serve over 15,700 affected workers. As of February 2026, the ministry has 10 active Action and POWER Centres across Ontario.

Planned expected results (including targeted number of clients served): Over 10,000 clients

Better Jobs Ontario

This is a modification to an existing program.

Projected new BJO expenditures from the Workforce Tariff Response funding: $1,800,000

Program start date: Ongoing

Program end date: Ongoing

Planned description of program (including relevant projects and activities) — areas of focus

Better Jobs Ontario (BJO) supports unemployed individuals by providing grants for skills training up to two years in duration, helping participants find employment in in-demand occupations across Ontario such as:

  • automotive service technicians
  • underground mine service workers
  • manufacturing technologists
  • heavy equipment operators

Better Jobs Ontario is available to unemployed individuals who have been laid off or are from a low-income household experiencing challenges attaching to the labour market. The program provides financial assistance for vocational skills training, including:

  • tuition
  • books
  • transportation
  • basic living allowance

Applicants can receive up to $28,000, for programs one year or less in duration, and up to $35,000 for programs up to 2 years in duration. Additional funding may be available for dependent care, disability-related needs, living away from home allowance, and all costs related to Get set (Skills, Education and Training) and/or language upgrade training.

Target client groups/recipients: Unemployed

Planned benefits of program

Desired program outcomes include:

  • clients gaining skills in-demand by employers
  • clients becoming employed, specifically in fields related to their training programs with high employment prospects

This program will be supported by the Canada-Ontario Workforce Tariff Response funding in 2025-2026 in addition to other federal and provincial funding. For program outcomes as a whole, since the launch of the program in 2008, BJO has supported over 136,000 unemployed workers to retrain for new jobs (as of March 31, 2026). In 2025-26, this included 4,301 client starts.

Planned expected results (including targeted number of clients served):  An additional $1.8 million will allow the program to serve an additional 83 clients. Because BJO is application-based, the target may change and will depend on applicant demand.

Integrated Employment Services (IES)

This is a modification to an existing program.

Projected new IES expenditures from the Workforce Tariff Response funding:  $8,000,000

Program start date: Ongoing

Program end date: Ongoing

Planned description of program (including relevant projects and activities) – areas of focus

Ontario’s Integrated Employment Services (IES) offers a range of resources, supports and services to respond to the career and employment needs of all jobseekers and the skilled labour needs of employers. The IES model is designed to balance system-wide responsiveness to diverse client needs particularly those at greatest risk of prolonged unemployment.

Support for job seekers

Integrated Employment Services is an efficient, streamlined, and outcome-focused model. With a client-centered approach, job seekers can access a wide range of services, including:

  • individualized employment planning
  • job search support
  • connections to skills training and upskilling opportunities
  • referrals to specialized community and Employment Ontario programs that address barriers to employment 

Within these broad service offerings, the system interventions support clients in rapid reattachment to the labour market.

Support for employers

Employers can access recruitment support and help connecting with job-ready candidates. IES can also support employers who hire eligible individuals by providing targeted financial supports that help address short‑term barriers to employment and promote job retention.

Employer supports may include:

  • assistance for onboarding
  • workplace accommodations
  • adaptive equipment
  • job placement incentives, including wage subsidies where appropriate

The government will continue to set standards, establish performance outcomes and set the policies and priorities for the employment service system. 

Service System Managers

Service System Managers (SSMs) are responsible for designing, planning and delivering employment services that meet the needs of their local communities based on local labour market conditions, while balancing service delivery across diverse job-seeker groups.  The IES funding model includes operational funding and financial assistance for job seekers and employers to support job matches and client transition into employment. 

The ministry has implemented the targeted referral and feedback system so that clients who are unemployed are targeted for employment interventions.

The ministry is committed to continuous improvement as the system matures, services evolve, and lessons are learned.

Target client groups/recipients: Unemployed

Planned benefits of program

This program will be supported by the Canada-Ontario Workforce Tariff Response funding as well as other federal and provincial funding. For program outcomes as a whole, in 2025-2026:

  • 237,438 clients started Employment Action Plans (EAPs)
  • 124,872 clients completed pre-employment services, with 75, 833 working over 20 hours per week

Client demographics:

  • persons with disabilities (39%)
  • racialized persons (57%)
  • newcomers (29%)
  • youth with support needs (22%)
  • Indigenous (4%)
  • Francophones (8%)

As part of the performance management framework, the ministry aims to ensure that clients with complex needs are being served.

The ministry measures key performance indicators (KPIs) related to client intake and tracks those that belong to inclusion groups (Indigenous clients, youth with higher support needs, persons with disabilities, newcomers, racialized clients, etc.).

Planned expected results (including targeted number of clients served): 3,000 clients — target may change and will depend on clients from eligible sectors seeking services.

Skills Advance Ontario (SAO)

This is a modification to an existing program.

Projected new SAO expenditures from the Workforce Tariff Response funding:  $16,833,280

Program start date: March 4, 2026

Program end date: Ongoing

Planned description of program (including relevant projects and activities) – areas of focus

Skills Advance Ontario (SAO) is part of the Employment Ontario (EO) suite of programs. It is a sector-based workforce development program that supports strategic partnerships between employers and employment/training service providers to address labour market needs in sectors impacted by trade disruptions, tariffs, and other global market shifts.

SAO is currently targeted to serve employers in the following sectors:

  • steel
  • softwood lumber
  • manufacturing and automotive

In addition, SAO will also serve employers with workforce development needs in the following high-potential sectors:

  • healthcare
  • skilled trades and construction
  • clean technology
  • clean energy and natural resources

Application streams

Depending on which organization is applying to be the transfer payment (TP) recipient, SAO applicants can apply to one of 2 streams:

  • Employer-led: the funding recipient is an employer with workers requiring upskilling or reskilling, or an employer with an active Employment Insurance (EI) Work-Sharing agreement.
  • Service provider-led: the funding recipient is an employment and training service provider or a similar organization that designs, manages, delivers and/or coordinates employment and training services and programs, supported by government funding.

SAO can also support employers and workers by enabling employed individuals to build essential and technical skills needed to respond to tariffs and global market changes.

Supporting Workforce Skills Development

Under SAO, eligible employers may receive a Training Wage Subsidy to help continue paying employees while they participate in approved, sector‑focused training. This approach allows workers to maintain their regular wages while gaining new skills and helps employers retain experienced staff during training periods.

The Training Wage Subsidy is cost‑shared between government and employers, requires a formal training plan, and is available only to employees not participating in EI Work‑Sharing agreements.

To utilize the Training Wage Subsidy available under SAO, the employer must create a formal training plan outlining daily/weekly training schedules for each participating employee. The employer will be responsible for ensuring training schedules are followed and are serving the training purposes as outlined above.

Target client groups/recipients: Unemployed, work-sharing, employed

Planned benefits of program

Skills Advance Ontario is intended to:

  • support target sector workforce sustainability, resilience and development by funding partnerships that connect employers with the employment and training services they require
  • help employers access and retain a skilled and adaptable workforce to meet evolving labour demands
  • enable jobseekers and workers affected by economic disruptions, to upskill, reskill, and advance
  • support jobseekers and workers to pursue meaningful career pathways spanning entry-level through medium and high-skilled roles by offering the appropriate essential, technical and employability skills
  • support workers to obtain or retain employment by providing them with sector-specific employment and training services
  • support training opportunities for workers on reduced hours
  • connect jobseekers to employers with identified job vacancies or advancement opportunities if already employed

Planned expected results (including targeted number of clients served):  application-dependent — target may change and will depend on applicants from eligible sectors applying.

Additional information/comments

Skills Advance Ontario will help:

  •  stabilize sectors impacted by trade disruptions, tariffs, and other global market shifts
  • support employers with workforce development needs in high potential sectors

Skills Advance Ontario provides jobseekers and workers with essential technical and employability skills including upskilling or retraining in order to retain and/or advance in their jobs, or to pursue meaningful career pathways spanning entry-level through medium and high-skilled roles in their current employment sector or high-potential sectors.

Engagement and consultation plans and results

Steel

Engagement activities undertaken within the steel sector provided insight into the operational and workforce impacts associated with tariff pressures and market uncertainty. Employers reported a mix of interest in available supports, including training and employment stabilization measures, alongside indications of ongoing production challenges and workforce adjustments.  These consultations highlighted instances of layoffs, reduced hiring capacity, and broader concerns related to business continuity under fluctuating economic conditions.

Feedback obtained through these engagements underscored the need for responsive skills’ development opportunities, particularly in support of workers affected by workforce reductions and those requiring upskilling to meet emerging operational requirements. Employers also identified the value of mechanisms that help maintain workforce stability during periods of reduced demand, including access to Work‑Sharing and other employment supports.

The information collected is being used to inform planning for future workforce development initiatives, including the consideration of targeted training projects and supports designed to mitigate tariff related impacts through provincial initiatives including the Protect Ontario Workers Employment Response (POWER) Centres and Skills Advance Ontario. Continued outreach remains essential to ensure comprehensive understanding of evolving sector needs and to support the development of strategies that enable at risk workers to access timely and relevant upskilling opportunities.

Softwood lumber

Engagement activities within the softwood lumber sector indicate that tariff‑related pressures continue to affect business operations and workforce stability. A proportion of employers reported production slowdowns and workforce adjustments, including layoffs, as a result of sustained market and cost pressures. Consultations also identified employer interest in training supports intended to mitigate these impacts, with some noting that participation in Work‑Sharing arrangements has helped maintain employment levels during periods of operational disruption.

Feedback from the sector highlights the ongoing need for training that supports modernization, including upskilling aligned with new production processes and equipment requirements. Employers also emphasized the importance of workforce supports that can be activated during periods of reduced production, particularly when economic or cyclical conditions limit their capacity to maintain staffing and invest in skills development.

Information gathered through these engagements is contributing to the assessment of future workforce development strategies, through training initiatives including the POWER Centres and Skills Advance Ontario that strengthen sector resilience and support workers at risk of job loss. Continued outreach will remain essential to monitor evolving needs, ensure alignment of training with emerging labour demands, and maintain access to effective employment‑stabilization tools across the sector.

Those impacted by tariffs and global market shifts

Broader sectoral engagement has underscored additional workforce impacts, particularly in the automotive and manufacturing sectors, related to tariffs and global market shifts. Employers reported layoffs as well as risks of future layoffs, hiring freezes, reduction in capacity, and ability to provide training.  Some employers are looking at pivoting some or all of their production to new sectors, with a focus on skills development and (re)training initiatives to support retention.  Independently of the tariff context, sectors anticipate a significant number of retirements over the near- to medium-term, intensifying replacement demands and knowledge transfer needs.

Feedback provided through engagement has included enhanced needs for training and connection to public infrastructure projects and financial supports for laid off workers. Other key themes have included proactive engagement to identify workforce gaps, exploring and promoting practical solutions to address talent shortages and retention gaps, and aligning funding programs with workforce priorities. Feedback is being used to explore applicable program supports, including Labour Market Partnerships, POWER Centres, and Skills Advance Ontario.