Canadian employers facing Canada-U.S. tariff uncertainty should review their workforce scenarios, critical roles, employment agreements, compensation plans, and manager readiness before financial pressure forces urgent decisions. 

For mid-sized companies, proactive workforce planning can help reduce cost, risk, and disruption if hiring slows, priorities change, or restructuring becomes necessary. 

Why Workforce Planning Matters During the Canada-U.S. Trade War 

The latest escalation in Canada-U.S. trade tensions is creating another layer of uncertainty for Canadian businesses. 

Effective September 8, 2026, Canada imposed new counter-tariffs on $27.6 billion of U.S. imports after the United States introduced new tariffs on Canadian goods. The measures affect sectors including steel, dairy, agricultural equipment, pulp and paper, plastics, appliances, and electronics. 

The impact can extend beyond businesses directly importing or exporting these products. Tariffs can move through supply chains, affect costs and margins, influence customer spending, and make investment decisions more difficult. 

The Bank of Canada has reported that trade tensions continue to weigh on some businesses’ domestic sales outlooks. Employment intentions are also below their historical average, as softer demand affects hiring plans. 

For CEOs and senior leaders, that makes trade uncertainty a people issue as much as a financial one. 

The question is not simply: 

Will tariffs affect our business? 

It is: 

If conditions change, are we prepared to make the right workforce decisions? 

1. Build Workforce Scenarios Before You Need Them

Not every period of economic uncertainty leads to layoffs. 

A business may first slow hiring, delay backfills, consolidate responsibilities, postpone new roles, or reconsider expansion plans. 

Leadership should understand what happens to the workforce under different revenue and margin scenarios before those decisions become urgent. 

For example, what changes if your forecast is missed by 5%, 10%, or 20%? Which positions would still need to be filled? Which investments could be delayed? At what point would organizational structure need to change? 

Workforce planning should be part of financial scenario planning, not something that begins after targets have already been missed. 

2. Identify the Roles Your Business Cannot Afford to Lose

Cost reduction and workforce strategy are not the same thing. 

If restructuring becomes necessary, leaders need to understand which roles, skills, relationships, and capabilities are essential to the next stage of the business. 

Reducing headcount without that lens can solve a short-term cost problem while creating a longer-term capability problem. 

Before making workforce changes, ask: 

What will this business need to execute its strategy over the next 12 to 18 months? 

That question should shape hiring decisions, organizational design, succession planning, and any potential restructuring. 

3. Review Employment Agreements Before Restructuring

Employment agreements can feel routine when a company is hiring and growing. 

Their importance becomes much clearer when the business needs to end an employment relationship. 

Two recent Ontario Court of Appeal decisions demonstrate why. 

Baker v. Van Dolder’s Home Team Inc. 

In Baker v. Van Dolder’s Home Team Inc., the Ontario Court of Appeal provided greater clarity around the interpretation of termination provisions. 

The Court emphasized that employment agreements should be considered as a whole rather than invalidated based solely on isolated wording. The termination provisions in question were ultimately found to comply with Ontario’s employment standards legislation. 

For employers, that does not mean drafting matters less. 

It means the agreement needs to work as a whole, clearly reflect the employer’s intentions, and comply with the applicable employment standards legislation. 

You do not want to discover that an employment agreement is unenforceable after you have already made the decision to terminate. 

4. Review Bonuses, Commissions, Equity, and Other Incentive Compensation

A second Ontario Court of Appeal decision shows why employment agreements cannot always be reviewed on their own. 

In Wigdor v. Facebook Canada Ltd., contractual issues involving termination and restricted stock units resulted in an additional award of approximately US$4.7 million for RSUs that would have vested during the employee’s notice period. 

Most mid-sized businesses will never face a compensation claim of that size. 

But many organizations use bonuses, commissions, profit sharing, equity, or other forms of variable compensation. 

The broader lesson is important: 

Termination obligations may extend beyond base salary. 

Employment agreements and compensation plans should therefore be reviewed together, particularly before a business begins restructuring or making significant workforce changes. 

What About Employers Outside Ontario? 

These decisions apply in Ontario. They do not automatically change employment law in British Columbia, Alberta, Quebec, or other provinces. 

Employment standards legislation varies across Canada, and employment agreements need to comply with the legislation applicable to each employee. 

That creates another consideration for businesses with employees in multiple provinces: a standard agreement that works in one jurisdiction may not produce the same result in another. 

Ontario appellate decisions may also be persuasive when similar contractual questions are considered elsewhere, but employers should get advice specific to the jurisdictions in which they operate. 

5. Prepare Managers Before Workforce Changes Begin

The legal and financial decisions are only part of a restructuring. 

Managers may need to communicate changes, respond to employee concerns, redistribute responsibilities, manage morale, and keep remaining teams focused on the business. 

Without preparation, different managers can communicate the same change differently, make commitments they should not make, or unintentionally create additional employee relations issues. 

Leadership should determine in advance who communicates what, when decisions are escalated, what managers can and cannot say, and how remaining employees will be supported after a change. 

Strong restructuring planning considers the employees leaving, the managers delivering the message, and the team that remains. 

Where Fractional HR Fits During Trade Uncertainty 

For many mid-sized businesses, the challenge is not recognizing that workforce planning matters. It is having enough senior HR capacity to work through the scenarios before a decision is required. 

A fractional HR partner can help leadership: 

• Model workforce scenarios against changing business conditions 

• Assess organizational structure and critical roles 

• Identify HR and employee-relations risks 

• Review workforce policies, processes, and documentation 

• Prepare managers for difficult conversations and organizational change 

• Coordinate with employment counsel when legal advice is required 

This allows CEOs and senior leaders to connect financial decisions with their people implications without waiting until a restructuring is already underway. 

Prepare While You Still Have Options 

Economic uncertainty does not mean employers should immediately reduce headcount. 

It means leaders should understand their options. 

The best time to review your organizational structure, workforce plan, employment agreements, and management processes is before a difficult decision has been made. 

At MaxPeople, we help leadership teams connect people strategy with changing business conditions so they can make informed workforce decisions with greater clarity and confidence. 

When legal advice is required, our colleagues at Rodney Employment Law can support employers with employment agreements, termination provisions, compensation plans, and restructuring considerations. 

If Canada-U.S. trade uncertainty is changing how you are thinking about hiring, costs, or your workforce, now is the time to review the plan. 

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Frequently Asked Questions 

How are Canada-U.S. tariffs affecting workforce planning? 

Tariffs can affect workforce planning by increasing costs, disrupting supply chains, changing customer demand, and creating uncertainty around future revenue. Businesses may respond by slowing hiring, delaying backfills, adjusting organizational structures, or considering restructuring. The appropriate response will depend on the company’s exposure, financial position, and business outlook. 

Should employers review employment agreements before restructuring? 

Yes. Employers should understand their contractual and statutory obligations before making termination or restructuring decisions. Employment agreements, termination provisions, and incentive compensation plans should be reviewed together where applicable. 

Do Ontario employment agreement decisions apply across Canada? 

No. Ontario Court of Appeal decisions do not automatically change employment law in other provinces. Employment standards legislation differs across Canada, and employers should ensure agreements comply with the legislation applicable to each employee. However, appellate decisions may be considered persuasive when courts elsewhere address similar contractual issues. 

How can fractional HR help during a restructuring? 

Fractional HR can help a mid-sized company assess organizational structure, model workforce scenarios, identify people-related risks, develop restructuring processes, prepare managers, plan communications, and support remaining employees. Employment counsel should also be involved where legal advice is required. 

When should a mid-sized business bring in fractional HR support? 

Ideally, before workforce decisions become urgent. Fractional HR can be particularly valuable when a company is experiencing rapid change, uncertain demand, restructuring, growth, leadership transitions, or people challenges that require senior HR expertise without a full-time internal HR executive. 

 For more information about fractional HR services, email [email protected] or call 1.888.709.1236