Ottawa has built the platform for workforce growth. The question now is whether business will step up: expert
Canada’s 2026 federal budget is an open challenge to employers: the government has built the platform; now business needs to perform. Released on Nov. 5 and titled Masters of Our Destiny, Budget 2026 addresses a mounting labour shortage with a domestic-first workforce strategy. With more than 7 million job openings projected over the next decade and new worker immigration arrivals down 57 per cent compared to the same period in 2024 according to Budget 2026, Ottawa is pivoting hard toward building the workforce it needs from within – through trades incentives, Indigenous workforce inclusion, and AI upskilling.
“Across the budget, what really strikes me as being most notable for HR leaders is the government does seem to be putting in place some of the same kind of conditions around talent that they've been trying to put in place around things like building major projects,” says Noel Baldwin, Executive Director of the Future Skills Centre in Toronto. “And I think it really comes down to trying to create the right conditions for organizations to make some of their own investments and using public levers to try to produce that kind of an outcome.”
The budget’s most direct HR-facing measure is the Build Canada Apprenticeship Service, which offers employers up to $10,000 for hiring a first-year apprentice in an eligible Red Seal trade. The Apprenticeship Training Grant adds a $400 weekly top-up for apprentices in mandatory in-class technical training, supplementing Employment Insurance (EI) benefits. Both programs sit within Team Canada Strong, an $8-billion initiative targeting 100,000 new Red Seal skilled trades workers by 2031.
An easier path for the trades talent pipeline
The apprenticeship incentive directly addresses what the Future Skills Centre has heard from organizations for years, says Baldwin.
“It’s tough [for employers] to take on apprentices – the cost can be high, the need for support in the workplace as people are kind of moving in and out of the work-based learning and then into the classroom, back and forth,” he says. “That kind of incentive around hiring is a really important signal that the government is saying, ‘Okay, we’ve heard that concern and here’s a mechanism that we’re prepared to use to make that easier. Now we need you to step up.’”
Baldwin cautions that program design will determine whether smaller firms can access the opportunity. “In lots of sectors where small and medium-sized firms are the biggest proportion of firms, there’s still support that’s needed around some of the intake and onboarding and recruiting,” he says. “Are they designed in a way that aligns with business practices? Are they easy to access? Or do they become cumbersome and have lower uptake than we might otherwise want to see?”
Domestic talent pipeline a priority
Budget 2026 commits $451.8 million over four years to a new Partnerships for Indigenous Workforce Readiness Fund, designed to run alongside the existing Indigenous Skills and Employment Training Program (ISET). Baldwin says alignment with ISET’s established delivery networks will be critical.
“To the extent that those can also be aligned to benefit from the existing experience and wisdom of the organizations that deliver skills and employment training through ISET, I think that will also help to support this new Indigenous workforce development piece,” he says.
The budget’s 2027–2029 Immigration Levels Plan sets annual targets of 370,000 new temporary resident arrivals and 380,000 permanent resident admissions – down sharply from recent peaks. As HRD Canada has reported on how Canada’s talent exodus is reshaping workforce strategy, that moderation puts new weight on domestic pipelines.
Baldwin also stresses that workforce inclusion requires culture change, not just recruitment. “We're going to have to find new ways of bringing our domestic workforce into alignment with where the needs are in the labour force – it will mean creating good pathways and welcoming workplaces for youth who are experiencing big challenges right now around finding employment,” he says. “How do we bring women into sectors that they haven’t traditionally found themselves in, like construction trades? How do we create welcoming workplaces? – that’s something that HR directors have a big hand to play, in making sure that you’re not only bringing people in, but then they find themselves in places where they want to stay.”
AI upskilling and the gap in between
Canada’s National AI Strategy: AI for All, backed by an initial $2.7-billion investment, includes a $162-million commitment to Mitacs for 10,000 co-funded AI work placements for post-secondary students and graduates – a move HRD Canada first examined in its coverage of Ottawa’s AI work placements for young Canadians. The budget also commits up to $1.6 billion in an equity stake in Cohere, a Canadian AI company expected to create at least 1,000 high-paying technical jobs by 2030.
Drew Lindsay, founder of PathPilot, an AI-powered career navigation platform, and co-founder of talent agency GuruLink in Toronto, welcomes the direction but warns of a gap in specificity. “One of the biggest challenges that I see in some ways is that this sort of broad conversation about jobs that are created without a lot of specificity around what those jobs will be – which makes it, I think, harder for Canadians to prepare,” says Lindsay.
That gap falls hardest on mid-career workers in administrative, healthcare, and other roles facing AI disruption with no dedicated program to match. With the growing AI skills gap in Canada’s workforce already a pressure point for HR teams, Lindsay says employers must own this responsibility. “Employers have a responsibility to the individuals, and to themselves as well, to try and do everything that they can to help build the skills into their employees that are going to be needed in the future, so that people are more future ready,” he says.
Lindsay believes the National AI Literacy Initiative is a positive step, but says that practical clarity is still needed. “I think there’s still some work to do on helping people understand what does this really mean from a practical perspective,” he says.
Fewer barriers for talent development?
The 2026 federal budget shows a change in direction around certain infrastructure that could open up opportunities around workforce planning and talent pipeline building, according to Baldwin.
“We're all trying to figure out what kind of labour force that we have right now – there's a more medium-term question about how we can really position the workforce development alongside the sharper view of investing in the building that we want to do, because it will eventually move past this first tranche of initiatives towards the transitions that are going to happen in different sectors that are trying to contend with the change happening all around the world,” he says. “But the next phase of that then is a question, will the private sector step forward – there is a moment here for HR directors to look at some of the efforts to dismantle what might have been longstanding barriers and say, ‘How are we going to make better use of some of the public opportunities that are available to support the kind of growth that we’re trying to achieve as an organization?’”
