Littler's Stephen Shore says psychological health and safety duties hold firm as Canada's retaliatory tariffs squeeze payrolls
Canada's retaliatory tariffs take effect September 8, doubling duties on American steel and aluminum to 50 per cent and adding levies on roughly 700 more U.S. products, according to the Department of Finance Canada. But the pressure on employers to cut costs creates no exception to their occupational health and safety obligations, according to a Toronto employment lawyer advising Canadian companies through the trade dispute.
Stephen Shore, office managing partner of Littler LLP's Montreal, Toronto and Vancouver offices, has advised employers on workforce issues for more than 15 years, according to the firm. He said the disruption feels familiar to employers who navigated the early days of the COVID-19 pandemic and the first round of U.S. tariffs.
"It's a little bit of Groundhog Day for employers," Shore said. "It's the uncertainty mixed with general negative outlook that employers are forced to respond to."
Algoma Steel Inc. issued roughly 1,000 layoff notices at its Sault Ste. Marie, Ont. plant, earlier this year, saying the cuts followed what the company called unprecedented tariffs imposed by the United States. Shore said even businesses with no direct tariff exposure are pulling back, holding off on backfilling or expanding headcount in anticipation of a broader downturn.
Retaining skilled workers remains the top challenge
Shore pointed to Ottawa's Employment Insurance (EI) work-sharing program, which lets employers spread reduced hours across a workforce while employees collect partial EI benefits, as a tool many companies are turning to instead of layoffs. Unionized employers, he said, will likely need to negotiate temporary relief from collective agreement layoff provisions not built for a crisis of this scale.
His bigger concern is what happens after the disruption passes. Companies that shed skilled staff too quickly risk losing that labour force for good, since displaced workers often move to less-affected industries rather than wait for a recall.
"If we lose access to that labour force when we need it a month or three months or six months from now, and now we have to go backfill and hire and train and orient, we certainly will wish we made a different decision at the time of the crisis," Shore said.
The strain lines up with what safety leaders in other high-hazard sectors have already flagged as a distraction risk for frontline workers, as economic anxiety competes with attention on the floor.
Safety obligations don't pause for economic pressure
Employers reassessing staffing levels or shift structures still carry the same duty to take reasonable precautions for worker safety, Shore said, and any change that alters oversight or shifts risk profiles requires new measures to prevent the working environment from degrading.
"There's every expectation that they'll be responsive and take whatever new measures they'll need to take in order to ensure there is no reduction in the working environment as it relates to safety," he said.
Shore does not expect Ontario's Ministry of Labour to formally scale back enforcement, though government resources could shift toward other tariff-related priorities. Courts assessing penalties, meanwhile, may show marginal leniency where employers can demonstrate genuine economic hardship, though deterrence principles will not change, he said.
"A $50,000 fine may become a $40,000 fine," Shore said. "I can't say that for sure, but that wouldn't surprise me."
Psychological safety concerns linger amid uncertainty
The insecurity created by the trade dispute is also showing up as a psychological health and safety issue, and Shore said the obligation to address it does not change either.
"As a precaution to take steps to maintain health and safety, including psychological safety, I think employers have to be responsive to that," he said, though he stopped short of saying employers need to roll out mass psychological support programs immediately. Instead, he pointed to a heightened incidence of stress-related absence and short-term disability claims as signals worth watching.
That tracks with earlier reporting on how trade-driven uncertainty is fuelling anxiety among workers in manufacturing, mining and forestry. Shore noted this is roughly the third or fourth trade-related crisis employers and workers have weathered in recent years, and that the most severe predictions from earlier rounds largely did not materialize.
Group terminations carry outsized legal risk
Shore's clearest warning was for employers facing a prolonged downturn that forces large-scale layoffs or closures: do not handle group or mass terminations without experienced legal counsel.
"There are very particular obligations that come when you are terminating large groups at one time, and if you don't get them right, you may not end up getting credit toward your severance or termination obligations," Shore said. Errors as simple as improper notice, an incorrect form or a missed Ministry of Labour notification deadline can strip employers of that credit entirely, with liability running into the hundreds of thousands or millions of dollars once aggregated across a large group.
Shore's advice echoes lessons from past mass-layoff disputes that turned on how the process itself was handled, where employer conduct, not just the decision to cut jobs, determined the legal outcome.
For now, Shore's message is caution over panic: absorb short-term cost pressure where possible, keep safety and psychological safety obligations intact, and get legal advice before any large-scale workforce reduction.
