Relief Programs for Ontario Employers Amidst U.S. Tariffs Escalation: What Businesses Need to Know

In response to the escalating trade tensions with the United States, on April 7, 2025, the Ontario government has unveiled an $11 billion support plan aimed at shielding workers and businesses from the fallout of U.S. tariffs.  This comprehensive package aims to alleviate financial pressures for small and medium-sized enterprises (SMEs) across the province, providing crucial support for employee management and financial stability in the face of ongoing commercial uncertainty. 

Key points of the relief plan:

1. Six-month tax deferral 

The cornerstone of this relief program is a $9 billion tax deferral initiative, allowing businesses to postpone payments on key provincially administered taxes for six months.  This measure would apply to approximately over 80,000 Ontario businesses and covers taxes such as the Employer Health Tax, Fuel Tax, Mining Tax, and Beer/Wine/Spirits Tax. This Tax Deferral will apply retroactively from April 1, 2025, to October 1, 2025. Thus, all taxes owed must be paid by October 1, 2025. 

For SMEs, this translates into improved cash flow during a critical period, enabling them to maintain operations, retain employees, and navigate the economic uncertainty caused by the trade escalation.

2. $2 billion WSIB rebate 

  In addition to the tax deferrals, Ontario is offering an additional $2 billion rebate for eligible businesses through the Workplace Safety and Insurance Board (WSIB), building on the $2.5 billion rebate announced in November 2024 This rebate is designed to incentivize businesses to maintain and hire workers by providing direct cash relief for safe employers. It will help businesses offset operating costs, ensuring they can keep workers employed while navigating the economic challenges triggered by global trade tensions.  

How these measures benefit your business 

These relief measures are designed to provide immediate support for businesses that are feeling the pinch from ongoing trade tensions and tariffs. The tax deferral gives companies more flexibility, allowing them to free up cash flow to cover operational costs, retain workers, and plan for future growth. 

1. Employee management benefits 

The tariff relief program indirectly supports employee management in several ways: 

• Cash flow preservation: By deferring tax payments, SMEs can allocate more resources to maintaining their workforce, potentially avoiding temporary layoffs or reduced hours. 
• Workforce retooling support: The program includes assistance for businesses to retrain workers and diversify into domestic or new international markets beyond the United States. Additionally, the Ontario government had already provided additional support for workers by removing the $150 fee for apprentices taking their first Certificate of Qualification exam, saving each apprentice at least $330 in total when combined with other fee removals and deductions that the province has implemented since 2019. 

2. Export development Canada (EDC) trade impact program 

In addition to the Ontario program, Ontario organizations may benefit from this federal initiative designed to help Canadian businesses navigate the economic challenges posed by the recent U.S. tariffs. Launched in March 2025, this program allocates $5 billion over two years to support Canadian exporters facing trade disruptions. 

To qualify for the Trade Impact Program, your small or medium-sized enterprise must: 

• be established in Canada 
• be for-profit 
• be an incorporated legal entity, limited liability partnership (LLP), or cooperative in Canada 
• have an active Canada Revenue Agency (CRA) business number 
• "active" means a corporation that is not dissolved, amalgamated with another corporation or continued into another jurisdiction. More information can be found on Corporations Canada. 
• have between 1 and 500 full-time equivalent (FTE) employees 
• have between $100,000 and $100 million in annual revenue declared in Canada during its last complete tax reporting year (or during the last 12 months for monthly and quarterly filers) 

All other forms of business relationships and structures are not eligible. This includes: 

• sole proprietorships 
• limited partnerships (LP) 
• third-party representatives, including: 
• entities representing the interests of a third party, such as agents, promoters, sales representatives, and consultants 
• trading houses and export brokers (unless for the agriculture and agri-food sector) 
• distributors 
• wholesalers acting as an intermediary 
• franchisees (only the franchisor is eligible) 

3. Federal Employment Insurance (EI) work-sharing program 

Effective March 7, 2025 through March 6, 2026, the federal government has implemented significant temporary special measures to the Employment Insurance Work-Sharing Program in response to the economic challenges posed by U.S. tariffs. These measures aim to help businesses avoid layoffs while maintaining their workforce during this period of trade uncertainty. 

Extended agreement duration 

• Work-Sharing agreements can now be extended to a maximum of 76 weeks, compared to the standard 38-week maximum. 
• Initial agreements will still be approved for up to 26 weeks, with extensions available if required. 

Elimination of cooling-off period 

• The mandatory "cooling-off" period between successive Work-Sharing agreements has been waived during the special measures period. 
• Normally, employers would be subject to a cooling-off period equal to the number of weeks used in the prior agreement. 

Expanded employer eligibility 

• Reduced operational history requirement from 2 years to 1 year (businesses must have been operating in Canada for a minimum of 1 year). 
• Non-profit and charitable organizations experiencing revenue reductions due to tariffs are now eligible. 
• Cyclical and seasonal employers, previously ineligible, can now participate in the program. 
• The 10% minimum threshold for decreased work activity has been eliminated; employers with less than 10% reduction may now qualify. 
• Work-Sharing utilization can now exceed 60% of normal working hours. 

Expanded employee eligibility 

• Seasonal and cyclical employees who were previously excluded can now participate. 
• Management employees assisting with employer recovery efforts are now eligible to participate. 
• The program continues to require a minimum of 2 EI-eligible employees who agree to a reduction in hours. 

Modified recovery requirements 

• Businesses can now focus on maintaining viability in the face of U.S. tariffs, rather than demonstrating specific recovery measures to return to normal staffing levels. 
• This provides more flexibility for businesses dealing with ongoing trade uncertainties. 

Required documentation and application process 

To access the Work-Sharing Program benefits, employers must submit the following documentation: 

Application forms 

• Work-Sharing Application Form (EMP5100) - This is the main application form that includes: 

1. General information about the business 
2. Type of application (new agreement or amendment) 
3. Requested start and end dates (must start on a Sunday and end on a Saturday)
4. Attestation of business activity reduction

• Work-Sharing Unit Attachment A Form (EMP5101) - This form details: 

1. Information about each employee in the Work-Sharing unit 
2. Employee occupation/job description 
3. Employee hiring date 
4. Normal weekly hours for each employee 

The Employment Insurance (EI) Work-Sharing Program helps Canadian employers mitigate the economic impact of tariffs escalation with the U.S. in several important ways. Mainly, it assists in preserving skilled workforce. Businesses are better able to retain skilled employees who might otherwise be temporary laid off or terminated. It also maintains institutional knowledge and reduces future rehiring and retaining costs. From a financial standpoint, the changes introduces to this federal program reduces payroll costs while maintaining employment relationships; that is, employees receive EI benefits for the hours they’re not working, supplementing their reduced income. Thus, it helps businesses manage cash flow during period of reduced revenue.  

4. WSIB rebate

The WSIB rebate offers direct financial support for Schedule 1 businesses that prioritize workplace safety, allowing eligible companies to receive money back on their premiums. This helps them continue operating smoothly and efficiently, even amid economic uncertainty. For businesses in industries like trucking, where maintaining a clean CVOR record is essential for operational success, these measures can ease financial pressures and help maintain compliance with regulatory requirements. 

Do you have question about these relief measures?

As the Ontario and Federal governments steps in to provide critical financial relief, it’s important for businesses to make the most of these support initiatives. At Peninsula, we offer expert guidance on how to leverage these measures effectively. Whether you’re looking to manage your workplace safety program, stay compliant with tax regulations, or optimize your CVOR record to avoid penalties, we’re here to help. 

Contact Peninsula today at (1) 833 247-3652 to discuss how we can assist you in navigating these changes and securing your business’s financial health during this challenging period.