February 2026 Workplace Recap - February 28, 2026
Enjoy our latest edition of Workplace Recap for Canadian employers.
Legislation Updates
- Express Entry overhaul puts skilled workers in key sectors first
- $100M push to fix retention: Ottawa doubles down on keeping workers in Windsor
HR News
- Unemployment fell by 0.3% to 6.5%. Fewer people searched for work.
- Healthcare workers snooped on victims’ medical files for curiosity
- Bank of Canada pulls plug on payroll platform over missing money
- Fraud, time theft, conflicts: auditor general finds $6.3M lost inside Toronto operations
- Alberta exit would hit jobs, costs, and labour mobility hard
- Remote work gap: why Calgary lags Toronto, Vancouver, and Montréal
- Former B.C. lawyer who stole $800K from client convicted of first-degree murder
- Turnover now costs over $30K per employee and it’s still climbing
- 13 employees terminated from SaskEnergy after internal theft
- CRA fires over 100 employees as misconduct and CERB fallout surface
- Ottawa moves to shrink public service as workforce cuts ramp up
- Dentist jailed after decade-long $700K insurance fraud scheme
- Public sector workers earn more & get far better benefits than private sector employees
Case Law Round Up
- B.C. tribunal orders $750K payout in hate speech ruling against school trustee
- Manitoba lawsuit claims “humiliating” dismissal of university president
Legislation Updates
Express Entry overhaul puts skilled workers in key sectors first
Canada is reshaping its Express Entry system for 2026, prioritizing highly skilled candidates who can step into critical roles right away. New category-based draws will target sectors like healthcare, research, transport, and senior leadership, alongside continued focus on trades, STEM, and French-language talent. The shift is part of a broader move to balance immigration levels while directly addressing labour shortages. For employers, this signals a more strategic pipeline, with immigration increasingly aligned to real workforce gaps, not just volume.
$100M push to fix retention: Ottawa doubles down on keeping workers in Windsor
The federal government is investing $102.7 million dollars into worker retention in Windsor, alongside new workforce alliances designed to help employers keep talent in a tight labour market. The funding targets job stability, skills development, and stronger collaboration between businesses and local partners. For small employers, the message is clear: retention is no longer optional, and support is shifting toward keeping people, not just hiring them. Expect more structured, region-focused solutions ahead.
HR News
Unemployment fell by 0.3% to 6.5%. Fewer people searched for work.
Canada’s labour market showed mixed signals in January 2026, with employment slipping by 25,000 jobs while the unemployment rate fell to 6.5%. The drop in unemployment was driven largely by fewer people actively looking for work, not stronger hiring. Ontario saw the biggest employment decline, while Alberta and Saskatchewan posted gains. Wage growth held steady at 3.3% year-over-year, but participation in the labour force also declined.
Healthcare workers snooped on victims’ medical files for curiosity
A B.C. investigation found that 16 victims of the Lapu Lapu Day attack had their medical records improperly accessed, with 71 separate incidents involving dozens of healthcare workers. Many accessed files out of curiosity, despite not being involved in patient care, and some shared information with others. Disciplinary actions ranged from reprimands to termination. While safeguards existed, the report found gaps in enforcement and delayed notification to victims. It is a reminder that policies alone are not enough, monitoring, enforcement, and accountability are what actually protect sensitive data.
Bank of Canada pulls plug on payroll platform over missing money
The Bank of Canada has ordered fintech company XTM to immediately stop all retail payment activities after raising serious concerns about missing funds and a “significant shortfall” in client accounts. The platform, used by hospitality businesses to distribute wages and tips, is now under scrutiny after reports of delayed or missing payments to workers. Regulators say the company failed to properly safeguard funds, prompting an emergency shutdown to protect the public. For employers, it is a sharp reminder that third-party payroll and payment tools carry real risk if controls and oversight fall short.
Fraud, time theft, conflicts: auditor general finds $6.3M lost inside Toronto operations
Toronto’s auditor general report reveals nearly 700 complaints in 2025, leading to over 1,100 allegations tied to fraud, misuse of resources, and conflicts of interest. Investigations uncovered millions in losses and prevented costs, including a case where unauthorized electricity contract changes could have cost $2.5M if not caught. Other cases ranged from time theft to stolen equipment, pointing to recurring internal control gaps. Over five years, confirmed cases totalled $6.3M in losses, with millions more prevented through early detection. For employers, it reinforces a clear takeaway: reporting channels and oversight systems pay for themselves quickly.
Alberta exit would hit jobs, costs, and labour mobility hard
A new Alberta Federation of Labour brief warns that separating from Canada would create major risks for workers and employers, even before any transition is complete. The report says companies and skilled workers could begin leaving early, shrinking the tax base and workforce. It also points to higher costs, loss of federal funding, and new barriers to labour mobility, making it harder to hire across provinces. Employers could face tighter talent pools, rising costs, and added uncertainty as core systems like pensions, EI, and trade agreements would need to be rebuilt.
Remote work gap: why Calgary lags Toronto, Vancouver, and Montréal
Calgary is lagging behind other major Canadian cities when it comes to remote and hybrid work, with nearly 88% of job postings requiring full-time, in-office presence. While only about 17.1% of Calgary workers are primarily remote, cities like Toronto (24.7%), Vancouver (22.4%), and Montréal (20.6%) maintain significantly higher flexibility. Nationally, remote work continues to decline, with just 17.4% of Canadians working mostly from home. The gap highlights a growing tension between operational realities and evolving employee expectations around flexibility.
Former B.C. lawyer who stole $800K from client convicted of first-degree murder
A former B.C. lawyer has been found guilty of first-degree murder after killing a client whose money he had spent. The court heard he took nearly $800,000 over several years, then orchestrated the killing when repayment became impossible. The judge rejected claims of a spontaneous act, pointing to clear planning, including setting up the meeting and preparing materials in advance. The conviction carries an automatic life sentence with no parole for 25 years. For employers, the case is an extreme but sobering example of how financial misconduct can escalate when oversight and accountability fail.
Turnover now costs over $30K per employee and it’s still climbing
Employee turnover is becoming a significant financial pressure for Canadian businesses, with the average cost to replace an employee now reaching $30,680, up from $29,234 last year. Nearly one in three employers expect turnover to rise in 2026, driven by heavier workloads, a competitive job market, retirements, and better offers elsewhere. While many employers plan wage increases, employee expectations remain cautious. The takeaway for small businesses is clear: retention is no longer just an HR issue, it is a growing cost centre that demands attention.
13 employees terminated from SaskEnergy after internal theft
Thirteen SaskEnergy employees were fired following an internal investigation into fuel theft within its construction division, with incidents spanning from early 2024 to mid-2025. The total loss is still unknown, but the case has been reported to police and escalated to independent investigators and auditors. The company has begun reviewing internal controls and plans to recover losses. For employers, it is a clear reminder that weak oversight, especially in operational roles, can lead to long-running issues that only surface after significant damage is done.
CRA fires over 100 employees as misconduct and CERB fallout surface
More than 100 Canada Revenue Agency employees were fired over the past year as part of a broader crackdown on misconduct, including improper CERB claims. The agency reported hundreds of misconduct cases, ranging from time theft to unauthorized access to taxpayer data, with many leading to discipline or termination. CERB-related investigations alone resulted in dozens of firings, part of a wider effort that has already removed hundreds of employees since 2023. For employers, it is a reminder that enforcement is tightening and internal accountability is under a brighter spotlight.
Ottawa moves to shrink public service as workforce cuts ramp up
The federal government is moving to reduce the size of the public service, targeting a return to more “sustainable” staffing levels after years of growth. About 9,800 roles were already reduced in 2024 to 2025 through attrition and spending cuts, with further reductions expected through 2025 to 2026. Longer term, the plan could eliminate roughly 40,000 positions, largely through attrition but also workforce adjustments. For employers, it signals a shift toward cost control and efficiency, but also raises questions about capacity, service levels, and increased competition for talent entering the private sector.
Dentist jailed after decade-long $700K insurance fraud scheme
A Calgary dentist has been sentenced to three years in prison after admitting to a decade-long insurance fraud scheme totaling nearly $700,000. The case involved submitting claims for procedures that were never performed, impacting multiple insurers over ten years. Despite repaying the money and pleading guilty, the court emphasized the scale and persistence of the fraud, noting it continued even during the investigation. For employers, the case underscores how internal controls, billing oversight, and early red flags can make or break fraud prevention.
Public sector workers earn more & get far better benefits than private sector employees
A new Fraser Institute study finds Ontario government workers earn 7.9% more on average than comparable private-sector employees, even after accounting for factors like age, education, and job type. When unionization is included, the gap still sits at 6.5%. The difference goes beyond wages, with significantly higher pension coverage, earlier retirement, and stronger job security in the public sector. For employers, this reinforces a growing challenge: competing with stability and benefits, not just salary.
Case Law Round Up
B.C. tribunal orders $750K payout in hate speech ruling against school trustee
A B.C. Human Rights Tribunal has ordered a former Chilliwack school trustee to pay $750,000 after finding his public statements created a discriminatory work environment for LGBTQ teachers. The tribunal ruled that multiple posts crossed into discrimination and, in some cases, hate speech, contributing to fear, isolation, and workplace harm over several years. The decision reinforces that public commentary, especially from those in positions of authority, can carry workplace consequences when it targets protected groups.
Key Take-Aways for Employers
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Public statements by employees, especially leaders, can create liability if they impact workplace conditions
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“Off-duty” conduct is not risk-free when it affects protected groups or the work environment
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Human rights laws apply to speech that contributes to discrimination, even outside formal workplace channels
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Clear policies, training, and enforcement around respectful conduct are critical
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Early intervention matters, issues that escalate publicly can lead to significant financial and reputational risk
Manitoba lawsuit claims “humiliating” dismissal of university president
The former University of Winnipeg president is suing the institution, alleging his termination was handled in a “misleading, callous, and humiliating” way that breached his contract and caused reputational harm. The lawsuit claims he was dismissed without warning despite being under a fixed-term agreement, with disputes over severance terms and delays in payment. It also alleges he was escorted out by security and that public messaging around his departure implied misconduct. None of the allegations have been proven in court.
Key Take-Aways for Employers
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How you terminate matters as much as why, process can trigger legal risk
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Public statements about departures can create reputational liability if unclear or suggestive
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Severance terms must align strictly with employment contracts to avoid disputes
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Security escorts should be handled carefully to avoid claims of humiliation or bad faith
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Consistency and timing in payments and communications are critical to reducing exposure
Melina Laird is Operations Coordinator for ConnectsUs HR, a company that provides tools & resources to quickly set up a Human Resources department.
You can contact her here.
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