New! Workplace Retention and Training Program

Geoff Currier and Evelyn Jacks

The new federal government’s Workplace Retention and Retraining Program (WRRP) is designed to help businesses keep and retrain workers and provide employers, with up to $1,000 available for each employee to help with training costs. The WRRP was announced on August 25, 2026 and will run until March 31, 2028. Employers can access up to 152 weeks of support. This program may apply to your business or those of your clients. Take a look at the new provisions:

How it Works: The goal of the program is to support employers and their employees who face layoffs due to the tariff war fallout. During that time, employees may wish to shore up their skills by taking additional training of benefit to their careers and the renewal for growth in their employers’ firms. They will be supported by increased EI benefits to compensate for lost earnings as well.

Qualifiers. To qualify for the WRRP, there must be a work sharing agreement in place. Work sharing agreements can run anywhere from 4 to 152 weeks. 

According to the government documents: “Employers can work with Service Canada to allow for reductions in employee work schedules, with training activities taking place in their non-working hours. In addition to Employment Insurance (EI) benefits, participating EI eligible workers will be able to receive support for a total of 70% of their lost earnings for time not worked, compared to 55% of insurable earnings.”

The Worker Retention Grant. The $1000 training grant is a new opportunity – and it is paid to the employer. But details so far have been scant. Here’s what we know:

The purpose of the grant is to enable employers with an approved and implemented Work-Sharing agreement who commit to providing training opportunities to also provide additional income support to their Employment Insurance (EI) eligible employees who are working reduced hours and are on training.

The application period is from February 16, 2026, to December 31, 2027, at 3 pm EST

Ineligible Employers. It appears that unincorporated business people are not eligible which is a miss. Specifically, the government notes that ineligible organizations are those businesses that operate solely for the purpose of carrying out the administration of a government program/activity, such as municipalities, or Government or publicly owned corporations, such as crown corporations and those who are self-employed providing services under their definition of a contract for service, an independent relationship between a client and a business person.

Ineligible training. This includes but is not limited to attending conferences and training that employers are legally required to provide to their employees.

Ineligible costs. According to the government costs that may be associated with the design and/or delivery of training are not eligible under this Grant. Examples include but are not limited to professional fees, management consulting, travel and accommodation, materials and supplies, venue or logistics, virtual platform licenses, printing participant materials.

Funding amount: Funding amounts will vary depending on the details of the Work-Sharing agreement, such as the number of participating employees, the duration, and the reduction rate. Employers cannot apply for the Grant before implementing their Work-Sharing agreement.

The $1,000 payment made to the employer is not taxable but the amount flowed through to the employee is. It is also subject to CPP or QPP and EI Deductions. 

However, it has not yet been made clear if the employer would receive the receipting for the costs of the training program for the employee. Nor is it certain if the employer will have to keep the tuition receipt as a back-up.

The program has not yet finalized if the employee would then get the offsetting tuition credits and/or Canada Training Credit refund.  

A Broad-Based Approach. This program is not industry specific and there’s a broad base in terms of what kind of training is covered. Technical training, digital skills training, workplace safety training, language training, coaching and on the job training are among the skills training objectives available in this program. 

The really good news? Your business clients will not need to demonstrate a reduction in business activity to qualify. But there is always audit risk on the back end, as employer/employee participation is cross-referenced with the benefits received under this program. 

WRRP and Tax Consequences: Employers and employees will have to keep accurate accounts of their participation in the program. And note, it is clear on the eligibility descriptors that employers who want to be eligible for the funding must declare any amounts owing and in default to the Government of Canada, first.

What’s Missing: Regarding the questions we’ve mentioned which have yet to be answered, the department says: “Once the program details are finalized and implemented, more information about specific expenditure eligibility and program obligations will be made available on the program website.” 

As for how E.I. benefits fit, this is the directive from Employment and Social Development Canada:

“Participating employees must be eligible for EI benefits and must participate in an approved Work-Sharing agreement to receive EI Work-Sharing benefits. Employees participating in training during their reduced work hours are eligible to receive an income top up that, together with their wages and the EI Work-Sharing benefits amounts to approximately 70% of their reduced earnings. Actual income replacement would depend on factors including an employee's earnings and their reduction in work hours.”

A Miss. It begins with the uncertainty and lack of detail around the $1000 Workers Retention Grant. That’s a big problem given we are well into the eligibility period.

Also, does it make sense to limit the training grant to existing employees? What happens if workers don’t come back when business conditions improve? While the WRRP is available to businesses and their current employees, there do not appear to be opportunities under the program to hire new workers and train them.

The Bottom Line: It’s not certain when all the details of the program will be announced but you can help your business clients by letting them know about its existence and the opportunities it presents to them. Retraining and retaining employees can benefit your business clients as well as their workers.  

Knowledge Bureau will keep on top of this news for you. Be sure to attend the November 5 CE Summit on Year End Tax Planning for Owner-managers and Investors to keep up to date on technical matters that will save your clients money.

Finally, invite your clients to listen to Real Tax News with Evelyn Jacks and Friends to help your clients understand their tax system better.