Canada’s economy has absorbed recent U.S. tariff shocks better than expected, but the impact on jobs and employers has been highly uneven. According to RBC Economics, the effects are concentrated in a small number of tariff exposed sectors, including steel, aluminum, autos, forestry and select consumer manufacturing. Steel exports alone fell 30 percent in 2025, directly pressuring revenues and influencing hiring freezes, reduced overtime, delayed apprenticeships, and increased attention to automation and restructuring.
The strain is also regional. Ontario and Quebec face the highest effective tariffs because of their industrial mix, with GDP growth in both provinces expected to lag nationally in 2026. Integrated North American supply chains amplify the impact, as tariffed inputs can cross borders multiple times, forcing employers to coordinate workforce planning across sites and regions. While CUSMA continues to shield nearly 90 percent of Canadian exports from tariffs, Canada’s share of U.S. imports has declined, raising longer term competitiveness and job security concerns ahead of the agreement’s upcoming review.
For people leaders, this is a reminder that economic resilience at a national level can mask very real, localized labour pressures. Workforce risk will continue to be uneven, shaped by sector exposure, regional conditions and cross border supply chains. HR leaders have a critical role to play in helping organizations anticipate pressure points, align workforce decisions with business strategy, and maintain trust through clear, timely communication in an uncertain environment.
Engagement is Falling
As we have written previously, leaders are feeling increasingly squeezed, caught between rising expectations and limited capacity. New data from Gallup reinforces that concern. Manager engagement has fallen nine points globally since 2022, with overall engagement dropping to just 20 percent in 2025. At the same time, organizations are relying on managers to deliver AI adoption, drive performance and protect wellbeing often with larger teams, flatter structures and inadequate support.
Gallup finds that managers, once more engaged than employees, are now no more engaged than the people they lead. The emotional toll is significant, with managers reporting higher stress, loneliness and burnout. Critically, engagement acts as a buffer. Engaged managers cope better, perform better and are far more likely to be thriving, making manager engagement a key lever for productivity, retention and sustainable leadership.
How Ahria can help: Ahria’s EPA (Engagement Pulse Assessment) helps organizations quickly identify where engagement is eroding, particularly at the manager level. It provides clear, targeted insights so leaders can focus supports where the squeeze is most acute and strengthen the conditions managers need to lead effectively.
When Leadership Becomes an Accident, Not a Choice
Across organizations, leadership gaps are widening. Today’s leadership squeeze is structural, not personal. Managers are leading larger teams and absorbing greater emotional and operational pressure, often with little formal preparation, while global data shows manager engagement has dropped sharply since 2022 and burnout now affects more than half of people leaders.
Experienced leaders are stretched thin, succession benches are shallow, and high‑potential employees are being pushed into leadership roles before they are ready, simply because someone has to step in.
The issue is not effort or intent. It is preparation.
New leaders are being asked to steady teams, lead change, implement new technologies and manage emotional fallout, often without the experience, coaching or development that once came with the role. Left unsupported, this creates burnout, inconsistent decision‑making and fragile teams.
This is not a talent shortage. It is a development gap.
Next‑generation leadership development matters – Leadership today demands judgment, adaptability and the ability to lead through ambiguity. With fewer layers and less margin for error, organizations can no longer rely on learning by trial and error.
Developing leaders early and intentionally is no longer optional. It is how organizations protect performance, engagement and continuity when demand for leadership outpaces supply.
Ahria’s Next Level Leadership program is built for emerging and next‑generation leaders who are being asked to lead sooner, faster and in far more complex environments.
The program focuses on the capabilities leaders need now: anticipating risk, interpreting complexity, making sound decisions, aligning people, challenging assumptions and continuously learning. Grounded in real leadership scenarios, it equips leaders before they are overwhelmed, not after.
In a tight leadership market, organizations that invest early in leadership capacity gain resilience. Those that do not take on risk they often cannot see until it shows up in performance, engagement and turnover.
From Incivility to Impact: Why Leadership Tone Matters More Than Ever
When leadership capacity is stretched faster than it can be built, the consequences rarely stay contained at the individual level. Over time, strain begins to surface in how teams function, how leaders make decisions, and how work gets done across the organization.
Recent data across sectors is sending a clear signal. Rising levels of workplace incivility, burnout, and disengagement are no longer isolated issues. Organizations are seeing the impact in reduced psychological safety, weaker collaboration, slower decision making, and growing leadership fatigue. These patterns are increasingly understood as indicators of organizational risk, not simply interpersonal problems.
At the same time, employee expectations are shifting. Greater emphasis on balance, purpose, flexibility, and the ability to disconnect is reshaping how people engage with their work. While these changes reflect important progress, they also create real tension in fast moving, resource constrained environments where leaders remain accountable for results. When leadership teams are not aligned on how they lead through these pressures, friction becomes normalized and the tone at the top begins to erode.
In practice, many leaders find themselves caught in the middle. They are expected to deliver outcomes while compensating for misalignment, unclear expectations, or weak shared ownership across teams. When speed and individual delivery are emphasized without equal attention to trust, clarity, and collective accountability, leaders absorb the gaps themselves. Over time, this fuels burnout at the top, weakens accountability, and sends mixed signals across the organization. Conflict becomes avoided or personal, focus drifts, and shared priorities suffer.
An objective assessment lens can be especially valuable in these moments. Structured individual and team assessments help organizations move beyond surface explanations and examine the conditions shaping behaviour. Rather than attributing challenges to motivation, generational differences, or work ethic, assessment surfaces patterns related to trust, role clarity, decision making, commitment, and accountability. This creates a shared language for leadership teams to reset expectations, strengthen alignment, and intentionally rebuild the conditions required for respectful workplaces and sustained performance.
If you have a leadership team that is struggling and would value an objective conversation about what may be contributing to the challenges and how to move forward, we invite you to reach out to Kelly Gillis to discuss a path forward.
Career Transition Is Not Just for the Person Leaving
Career transition is often treated as a service for departing employees. Important, yes. But incomplete. In reality, the biggest risk and opportunity sit with leaders and the teams who remain.
Poorly handled exits undermine trust, fuel anxiety and destabilize performance long after the employee has gone. What unsettles people is rarely the decision itself. It is uncertainty, inconsistent messaging and leaders who appear unprepared at the most sensitive moments.
We see this repeatedly. Managers decline pre‑termination coaching because it feels uncomfortable or unnecessary, only to face drawn‑out debates with exiting employees, miscommunications, and ripple effects that could have been avoided. Once an exit conversation goes sideways, trust is hard to rebuild.
Career transition done well is a leadership intervention.
When leaders are prepared, exits are clearer, more humane and more consistent. Departing employees feel respected. Remaining employees see leaders acting with confidence and integrity when it matters most. The organization stays steady rather than reactive.
At Ahria, career transition goes beyond supporting the individual who is leaving. Our high‑touch approach helps leaders prepare for exits, navigate difficult conversations, and manage the impact on teams afterward.
Handled well, exits reinforce credibility rather than erode it. In uncertain labour markets, that capability has become a real competitive advantage not because people never leave, but because when they do, trust remains intact.
Supporting HR Leaders in Transition: Complimentary Career Planning Sessions
The world of work is shifting and HR professionals are feeling it firsthand. Whether you’re navigating organizational change, rethinking your next move, or simply seeking clarity in a complex landscape, we’re here to help.
As part of our commitment to the HR community, we’re offering a limited number of complimentary career planning sessions for HR professionals who are actively exploring their future. These one-on-one conversations are designed to provide strategic guidance, clarity, and actionable next steps tailored to your unique situation.
If you’re in a period of transition or uncertainty and want to explore your options with a trusted advisor, we invite you to connect.
