Canadas Economic Action Plan Helps More Canadians Continue Working Through Work Sharing

OTTAWA, ONTARIO–(Marketwire – March 5, 2009) – The Honourable Diane Finley, Minister of Human Resources and Skills Development, today announced that the Government has implemented changes to Work-Sharing agreements so that more Canadians can continue working while companies experience a temporary slowdown.

“Our Government knows that by keeping Canadians working, we can minimize the impact of this difficult economic time,” said Minister Finley. “The changes to Work-Sharing agreements will give companies easier access to these agreements and extend Work Sharing to 52 weeks while the companies recover from temporary slowdowns.”

Work Sharing, a current element of the Employment Insurance (EI) program, can be instrumental in assisting businesses experiencing a temporary slowdown caused by factors beyond their control. It is designed to avoid layoffs by offering EI income benefits to qualifying workers who are willing to work a reduced work week while their employer recovers.

Employers in key sectors of the economy such as forestry and manufacturing have already been using Work Sharing. Many of these agreements have or will come to an end in the coming months; this will put jobs, companies and communities at risk.

Recognizing the current level of uncertainty faced by many businesses during volatile global markets, the Government has extended Work-Sharing agreements by 14 weeks, to a maximum of 52 weeks, and increased access to Work-Sharing agreements through greater flexibility in the qualifying criteria. These changes to the Work-Sharing program are available immediately for companies and their employees, and will be in effect from February 1, 2009, to April 3, 2010.

This measure is estimated to cost $200 million over two years and will minimize the financial impact of the economic downturn by helping companies avoid layoffs while their industry recovers. It is part of Canada’s Economic Action Plan to support Canadians during the global recession and invest in Canada’s long-term growth. The Government is investing an unprecedented $8.3 billion in the Canada Skills and Transition Strategy to support workers and their families, including measures for income support and skills and training.

This news release is available in alternative formats upon request.


Employment Insurance (EI) Work Sharing is designed to help companies facing a temporary downturn in business avoid layoffs by offering EI Part I income support to workers willing to work a reduced work week while the company undergoes recovery. Under Work Sharing, employers can retain employees and avoid expensive re-hiring and re-training costs. Employees are able to continue working and keep their skills up to date.

Under current Canada Employment Insurance Commission policy, the need to reduce the normal level of business activity must be beyond the control of the employer. In addition, the employer must provide a recovery plan that describes the activities to be undertaken to return to normal production at the end of the Work-Sharing agreement, which is usually a maximum of 26 weeks, but can be extended by up to an additional 12 weeks, to a maximum 38 weeks under exceptional circumstances. Workers laid off at the end of their participation in Work Sharing may receive their full entitlement to regular EI benefits based on their rate of pay prior to participating in Work Sharing.

The objectives of the temporary policy change announced in Canada’s Economic Action Plan are to increase access to Work Sharing during this difficult economic period and extend the agreements to allow a longer period for companies to recover. There are three main elements to these changes:

– easing the requirements for the employer’s recovery plan;

– extending the duration criteria of Work-Sharing agreements to a maximum of 52 weeks; and

– allowing employers with a previous Work-Sharing agreement that expired prior to February 1, 2009, to be eligible to apply immediately for a new agreement of up to 52 weeks.

The changes to the Work-Sharing program will be in effect from February 1, 2009, to April 3, 2010.

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