Hire or Flex? Making Headcount Decisions While Tariffs Stay Unresolved
Where do the tariffs stand right now?
The short version: the uncertainty that started in late summer has not gone away. Talks between Ottawa and Washington broke down in August, both sides imposed new tariffs, and as of this article's publication neither set has been lifted. For a plant manager in Brampton or a distribution centre in Vaughan, that means planning headcount against a moving target.
- August 22, 2026 — the United States began applying a 50% tariff to a range of Canadian goods.
- September 8, 2026 — Canada's counter-tariffs of 15%, 25% and 50% took effect on a list of U.S.-origin goods, including steel, appliances, agricultural equipment and electronics.
- Still in place — both sets of measures remain until either government changes or removes them.
Tariff lists and remission options change. Check the Finance Canada page for the current list before making sourcing or pricing decisions.
For staffing, the tariffs matter less as a headline than as a planning problem. If one of your largest customers ships into the U.S., or your inputs now carry a Canadian surtax, your volume for the next two quarters depends partly on decisions made in Ottawa and Washington. That is exactly the kind of uncertainty that makes a permanent hire harder to justify.
What is the labour market telling GTA employers?
The September Labour Force Survey from Statistics Canada shows a market that is softening at the edges but has not collapsed.
- -20,000 — Ontario employment edged down in September, though it was still up 86,000 (+1.1%) from a year earlier.
- 7.0% — Ontario's unemployment rate, little changed in the month and down 0.9 percentage points from September 2025.
- -13,000 — national manufacturing employment fell in September after rising 22,000 in August, and was little changed year over year.
- 30.6% — the share of unemployed people who found a job between August and September, down from 32.8% a year earlier.
Put together, that points to a market where employers are hesitating rather than cutting deeply. Fewer unemployed people are finding work each month, which usually means companies are holding back on hiring decisions, not that workers are scarce.
Across the GTA, our recruiters at Alliance Employment Services are seeing:
- Shorter planning horizons: more clients in Mississauga, Etobicoke and Peel Region are asking for coverage week by week rather than committing to a full season.
- Approved but paused requisitions: permanent roles that were signed off earlier in the year are being held while operations teams wait for clarity on specific customer contracts.
- More applicants, uneven fit: applicant volume for general labour roles has picked up, but people with forklift tickets, shipping and receiving experience or machine operation skills still take time to find and source.
What actually changes when you scale down with temporary staff?
Here is a point that often gets lost: temporary workers have the same rights under Ontario's Employment Standards Act as any other employee. Flexible staffing does not get around the ESA. What it changes is who carries those obligations, and what happens on your floor when volume drops.
Ending an assignment is not a termination
When you tell your agency you need fewer people next week, you are ending assignments, not firing your own employees. Under the ESA, the worker stays employed by the agency after the assignment ends. That makes it much easier for you to reverse course than cutting permanent headcount.
An agency can place people where you can't
If tariffs slow your Mississauga line, you cannot move your laid-off pickers to someone else's warehouse. An agency serving many sites across Brampton, Vaughan, Etobicoke and Scarborough can. That ability to move workers between clients is what makes flexible staffing work. In our experience, slow weeks at one site are often busy weeks at another, so good workers usually stay employed and stay available when your orders come back.
The obligations sit with the agency, priced into the rate
The agency pays payroll, statutory deductions, WSIB premiums and any notice it owes its workers. Those costs are built into the bill rate, so you pay a known hourly cost instead of carrying an open-ended liability on your own books.
Ramping up and trying people out
Flexibility works in both directions. When a customer order lands early, you can add shifts without opening a requisition, and you get to see how someone performs on your floor before offering a permanent role.
- Your permanent employee — after three months, you owe written notice or termination pay of one to eight weeks depending on length of employment, and 8, 12 or 16 weeks if 50 or more employees are terminated at one establishment within four weeks.
- A temp on assignment — if an assignment estimated at three months or more ends early, the agency owes one week's notice or pay in lieu, unless it offers other reasonable work. Shorter assignments carry no termination-of-assignment notice.
This section summarizes general ESA rules and is not legal advice. Employment contracts, collective agreements and common law can create obligations beyond the ESA minimums. Confirm your specific obligations with a qualified employment advisor.
What does flexible staffing not change?
Using an agency shifts a lot of the work and risk off your team, but not all of it. Two responsibilities stay with you as the client.
- Licensed agencies only — since July 1, 2024, clients are prohibited from knowingly using an unlicensed temporary help agency. Clients must also record the hours each assignment worker works for them.
- Joint liability — a client can be jointly liable with the agency for certain unpaid wages, such as regular wages, overtime and public holiday pay, if the agency fails to pay.
That is why your choice of agency is part of the decision. A licensed agency with sound payroll and clear assignment terms is what turns flexible staffing into a real hedge. You can see how our temporary staffing for GTA employers is set up to handle these responsibilities.
Is temporary staff more expensive than hiring permanently?
It depends on what you compare. The most common mistake is putting a permanent worker's hourly wage next to an agency's bill rate. Those are not the same kind of number. A bill rate is the full cost of a worker on your floor: wages plus vacation pay, public holiday pay, CPP, EI, WSIB, payroll and the cost of recruiting them. A wage is only the starting point of what a permanent hire costs you.
A fair comparison puts the bill rate next to the full cost of a permanent employee, which also includes:
- Statutory costs: vacation pay, public holiday pay, CPP, EI and WSIB premiums, the same items built into a bill rate.
- Benefits and overhead: any group benefits, plus the HR and payroll time spent administering them.
- Recruiting and onboarding: job postings, interviews, orientation, safety training and the weeks before a new hire is fully productive.
- Paid hours you don't need: scheduled hours in slow weeks when tariff-exposed orders drop.
- Turnover and exits: replacing people who leave, and notice or termination pay if you have to cut back.
Once those are counted, the gap between the two is usually much smaller than the hourly numbers suggest. For steady, long-term roles, a permanent hire often still makes sense. For volume you can't predict, flexible staffing lets you pay only for the hours you actually use. For a breakdown of what a bill rate has to cover, see our guide on what a staffing bill rate really covers.
Temporary vs permanent staff: how do you decide which roles to hire?
Most sites end up somewhere between two extremes. Here is how the three common approaches compare when volume is uncertain.
Hire permanently for expected volume
Permanent staff sized to the busiest forecast
Works well if the forecast holds. If tariff-exposed orders slow, you face a choice between carrying idle labour, reducing hours, or managing lay-offs and terminations, each with its own cost and morale impact.
Flex almost everything
Minimal permanent team, temps for nearly all production roles
Keeps costs variable, but can leave you short on supervisors, trained equipment operators and people who know your quality standards. Turnover in key roles shows up quickly in safety and output.
Core and flex
Permanent core for must-have roles, flexible layer for uncertain volume
Your permanent team covers the work you will need in any realistic scenario. Temporary staff absorb the swings tied to specific customers, seasons or tariff outcomes, and the best performers can move into permanent roles once the picture clears.
Questions to ask about each open role
- Would you need this role if your most tariff-exposed customer cut orders by a third? If yes, it is a strong candidate for a permanent hire.
- How long does it take someone to become fully productive? Roles that take months to learn, such as lead hands or maintenance, justify a permanent commitment sooner than roles that take days.
- How far ahead can you see demand for this work? If your visibility is a few weeks, flexible coverage buys you time without locking in cost.
- Is the volume tied to one customer, product line or border-crossing flow? Concentrated exposure is where flexible staffing does the most work.
- Could a strong temp grow into this role? A temp-to-perm path lets you test fit on the floor before committing.
Where does federal Work-Sharing fit in?
If tariffs cut your volume and you already have permanent staff you want to keep, the federal Work-Sharing Program is designed for exactly that situation. Employees agree to a reduced schedule, and EI benefits cover part of the hours they lose.
- March 31, 2027 — the tariff-related Work-Sharing flexibilities have been extended to this date.
- 4 to 152 weeks — the range of agreement lengths now available while the Workforce Retention and Retraining Program is being put in place, per ESDC's program page.
- Up to $1,000 per employee — training funding the new Workforce Retention and Retraining Program will offer once it takes effect.
Work-Sharing and flexible staffing solve different problems. Work-Sharing protects the permanent team you already have. Temporary staff cover the variable volume above that core. Temps on assignment are employed by the agency, so they sit outside your own Work-Sharing agreement. Used together, the two give you a way to absorb a downturn without losing experienced people, and to add capacity quickly if orders recover.
How Alliance helps GTA employers stay flexible
Temporary and high-volume industrial staff for warehouses and plants across Mississauga, Brampton, Vaughan, Markham and Scarborough, scaled up or down as orders change.
Payroll, WSIB claims management and Ontario ESA compliance for assigned workers, designed to reduce the administrative load on your HR team.
Test fit on the floor first, then convert strong performers to permanent roles when your demand picture is clearer.
Same-day and short-notice fills when a customer order comes through earlier than expected.
Frequently Asked Questions
Should I hire permanent staff or use temps while tariffs are unresolved?
For most GTA industrial employers, the lower-risk answer is a mix: hire permanently for roles you will need in any realistic scenario, and use temporary staff for volume tied to tariff-exposed orders. Revisit the split as tariff news and order books change.
Do the same ESA termination rules apply to temporary workers?
Yes. Temporary workers are employees of the licensed agency, and the agency carries the same ESA notice and termination obligations as any employer. The difference for you as a client is that ending an assignment is not a termination of your own employee: the agency can place the worker at another site, and assignments estimated at under three months carry no termination-of-assignment notice. Confirm your specific obligations with a qualified employment advisor.
If I use a temp agency, what am I still responsible for?
You must only use a licensed temporary help agency and keep a record of the hours each assignment worker works for you. You can also be jointly liable with the agency for certain unpaid wages, such as regular wages, overtime and public holiday pay, if the agency fails to pay its workers.
Is temporary staff more expensive than hiring permanently?
Not necessarily. Compare the agency's bill rate with the full cost of a permanent employee, not with their wage. A bill rate already includes statutory costs, payroll and recruiting. A permanent hire also carries benefits, onboarding, training, paid hours in slow weeks and the cost of turnover or exits. For unpredictable volume, flexible staffing lets you pay only for the hours you use.
Can I keep a good temp worker permanently later?
Yes. Under the ESA, an agency cannot stop you from hiring an assignment employee directly. A conversion fee can generally apply only within the first six months after the worker starts at your site, so check your agreement terms.
Not sure where your core ends and your flex begins?
We'll walk through your open roles and your volume outlook with you, and help you build a staffing plan that holds up whichever way the tariffs go.
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