More than three-quarters of Canadian employers surveyed by employment and labour law firm Littler say they have taken workforce-related action in response to business or economic pressures over the past year.
Littler’s 2026 Canadian Employer Survey found 77 per cent of respondents took at least one such action, with 46 per cent pausing or reducing hiring, 35 per cent conducting layoffs or workforce reductions and 28 per cent increasing automation or artificial intelligence to reduce labour needs.
Among employers that took action, 83 per cent said U.S. tariff-related disruptions played a role, including 54 per cent who said tariffs contributed to a large or moderate extent.
“Economic uncertainty and trade disruption are clearly influencing workforce decisions, and those impacts could intensify if U.S.-Canada trade tensions escalate further,” said Stephen Shore, office managing partner for Littler’s Canadian offices. “Employers must remain flexible as conditions change, while carefully considering the legal and workforce implications of AI adoption, layoffs and other cost-saving measures.”
The survey collected responses from 200 in-house lawyers, C-suite executives and human resources leaders across a range of industries and company sizes.
AI is also influencing workforce planning, with 44 per cent of respondents having reassessed or currently reassessing job responsibilities because of actual or anticipated increases in its use. Thirty-six per cent have reduced or are reducing hiring and 33 per cent have made or are making workforce reductions.
Formal AI governance remains less widespread. Forty-nine per cent reported having a formal workplace AI policy, while 42 per cent have a formal review or approval process for AI tools or use cases.
Employers are also responding to changing workplace expectations. Half have increased required on-site workdays over the past two years. Among those employers, 81 per cent reported an increase in remote-work requests based on protected grounds and 91 per cent reported more requests based on personal preference.
The survey also found 59 per cent of respondents have experienced increased requests for leaves or accommodations related to employee mental health.
On regulatory compliance, 55 per cent have updated job postings to address pay transparency requirements and expectations, while 37 per cent have conducted pay equity, compensation or pay-gap reviews.
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