Question Period Note: WORKFORCE ALLIANCES AND SECTORAL WORKFORCE INNOVATION FUND

Existing workforce development approaches to meet in-demand occupations are fragmented, not well coordinated with Provinces and Territories and lack collaboration mechanisms that support alignment. While existing initiatives and networks are producing positive outcomes; there is a need for greater cohesion and more strategic workforce development, particularly in the current geopolitical and economic context.

Our government is committed to protecting and supporting workers in this period of uncertainty and change with one labour market.

We will advance new opportunities among a one economy agenda and invest to ensure Canadians have the skills for in demand jobs.

As part of a broader tariff package announced by the Prime Minister on September 5 and echoed in Budget 2025, the Government of Canada is investing in modern measures to protect, build and transform Canada’s workforce for its strategic industries.

New investments include creating Workforce Alliances to tackle urgent labour market challenges in sectors under pressure and with growth potential.

In addition, a new Sectoral Workforce Innovation Fund will support projects tailored to local job markets. This fund will help businesses in key sectors and regions recruit and retain the workforce they need and support displaced workers impacted by tariffs transition to growing industries.

IF PRESSED

Alliances will help improve collaboration, creating wider networks of industry partners, so training institutions can better match programs to employer needs.

Enhanced collaboration between members of the Alliance will also make it easier for businesses to hire workers with the right skills, which will drive innovation and boost domestic production.

Through a cost-sharing model, the Sectoral Workforce Innovation Fund will invest in projects that support workers transition from industries in downturn to those in growth and projects that create talent pipelines to advance federal missions (e.g., housing, industrial defense, major projects).

On September 5th and echoed in Budget 2025, the Government announced an investment of $382 million over five years and $56 million ongoing to strengthen collaboration between industry stakeholders and address pressing labour market challenges.

Workforce Alliances will unite employers, unions, and industry groups to address labour market challenges and to coordinate public and private investments in skills development to help businesses and workers succeed in the changing labour market. They can focus on sectors under pressure and those with growth potential.

In parallel, the new Sectoral Workforce Innovation Fund will strategically target projects that help businesses in key sectors and regions to boost skills development, recruitment, and retention of the workforce they need.

By introducing a national coordinating mechanism with the tools to implement real solutions, the Alliances and the Innovation Fund will help build a modern workforce development ecosystem, bringing consistency and coherence to currently fragmented strategies.

This new modernized approach to sectoral programming will build on the most successful aspects of historical models and leverage lessons to refine our approach to sectoral supports, this includes recent investments in the Sectoral Workforce Solutions Program.

While sectoral programming has shifted over the last 30 years, and differs across models, evaluations and findings from all program iterations have provided valuable insight informing modern sectoral programming design and delivery.

Findings consistently indicate a significant demand for sector programming; a need for a streamlined and clear strategy to allow for timely implementation; and the importance of partnerships to support ecosystem changes.

The Sectoral Workforce Solutions Program, continues to make strategic investments in sectors and high-impact areas such as sustainable jobs, artificial intelligence and residential construction.

It focuses on a wide range of industry-driven activities such as training and reskilling workers, helping employers attract and retain a skilled and diverse workforce, and developing and implementing other solutions to help sectors address labour market needs.

KEY FACTS

Global economic instability and shifting trade relationships are placing significant pressure on some of Canada’s largest sectors, creating additional and evolving challenges for Canada’s workforce. Tariffs are impacting export-dependent industries and their supply chains, leading to job losses.

By August 2025, there were about 3.5 unemployed people for every one job vacancy in Canada. Most provinces and industries saw fewer openings and more people looking for work, suggesting the labour market has continued loosening, due to economic uncertainty and a mismatch between the skills needed by employers and the skills offered by job seekers.

Each sector of our economy is unique and faces challenges that vary based on each sector’s distinct labour market realities. As a result, sectors are grappling with a range of labour market pressures, including:

Demographic shifts – Construction sector’s workforce is older than the national average which means a significant retirement wave. By 2034, almost 269,000 workers, or 21% of the 2024 labour force, are projected to retire.

Geopolitical and trade dynamics –With the introduction of tariffs, manufacturers paused expansions, and 28% of surveyed businesses began implementing hiring freezes.

Significant labour shortages – in the Transportation sector for example, the projected shortages by 2035 will be anywhere between 70,000 to 130,000; predominantly in aviation, followed by trucking.

Furthermore, in their report released in Summer 2025, Members of the Union-Led Advisory Table highlighted the lack of a consistent, collaborative forum in which to identify and respond to the needs of workers in industries, sectors, and occupations undergoing transition, resulting in a deep institutional deficit. To fix this, they recommended to re-establish Sectoral Partnership Councils for a modern transitioning economy.

To respond to both profound workforce challenges and to help improve collaboration across sectors in tackling these, Workforce Alliances and a Sectoral Workforce Innovation Fund were announced.