Budget 2025: all you need to know about the federal supply-focused workforce strategy and how it will impact recruitment firms

Canada’s new federal budget marks a turning point in how the country approaches its workforce. Released on October 27, 2025, the plan leans heavily on one theme: rebuilding Canada through its people. Training, credential recognition, worker mobility, and income protection all take centre stage, signaling a deeper shift in how Ottawa sees the relationship between labour policy and economic growth. For staffing and recruitment firms, this is not just a budget; it’s a roadmap that could reshape candidate pools, client needs, and the competitive landscape for years to come.

At the heart of the plan lies a renewed focus on the trades. With housing shortages and infrastructure ambitions mounting, the government is injecting $75 million into apprenticeship training through the Union Training and Innovation Program. This investment aims to create the skilled workforce needed to build homes and public projects at scale. For staffing firms specializing in construction and trades, that funding could translate into new demand pipelines, not just for carpenters and electricians, but also for supervisors, safety officers, and trainers who can bridge the experience gap. As apprenticeship cohorts expand, a secondary effect will likely emerge: a gradual easing of labour scarcity in some trades, which may stabilize wage inflation and rebalance hiring dynamics across regions.

Healthcare receives its own targeted measure through a new five-year tax credit for personal support workers. In provinces and territories that haven’t yet signed wage-support agreements with Ottawa, eligible PSWs will be able to claim up to five percent of their earnings back at tax time. The message is unmistakable; retaining essential care workers has become a national priority. For healthcare staffing firms, this could improve recruitment and retention, particularly in rural or smaller jurisdictions where wage gaps have made hiring nearly impossible. But it could also reset compensation benchmarks, as public and private employers alike adjust their pay structures around the new credit.

Perhaps the most structural reform comes from a proposal to limit non-compete clauses in federally regulated industries. Ottawa intends to amend the Canada Labour Code to restrict their use, a move that could profoundly alter the flow of talent between companies. For years, non-competes have quietly dampened wage growth and stifled entrepreneurship by keeping skilled workers locked in place. If the reform proceeds as planned, staffing firms will see faster movement in the labour market with more candidates open to change, more opportunities to broker transitions, and a freer exchange of talent between employers. Yet this new flexibility may also increase turnover, forcing recruiters to adapt their retention strategies and rethink client advisory services as the ground shifts beneath them.