The current trade and tariff dispute between Canada and the United States has affected individuals and businesses in virtually all provinces and industries. On an individual level, those most affected are often employees who work in industries (like steel and aluminum) for which the US tariff barriers are especially high, or those in businesses which import their raw materials from, or export a large percentage of their finished products to, the US. In such industries and businesses, layoffs and even business closures can be the result.
The federal government has provided a number of supports for businesses and individuals who find themselves in such circumstances. On an individual level, changes to the rules governing eligibility for Employment Insurance (EI) benefits have made it easier for employees who have been laid off, temporarily or permanently, to qualify for such benefits and to increase the amount of benefits which may be received.
Under the usual rules, an individual can qualify for EI benefits where they have accumulated a prescribed number of hours of work over the previous 52 weeks. The number of required hours depends on the unemployment rate for the region in which the individual resides. After an application for EI benefits is approved, there is a one-week “waiting period” during which no benefits are payable. Finally, where an individual receives any kind of additional payment like vacation pay or severance allowance when their employment ends, those amounts are considered income to that person and will reduce the amount of EI benefits payable.
Under the changes made recently by the federal government, each of those rules is relaxed for EI claims made during specified time period(s) in 2025. It’s important to note that while the relieving changes to the EI eligibility and benefit amount rules were put in place to address the effects of the current trade and tariff situation, those changes apply to all EI claims made during the specified time period(s). There is no requirement that the EI applicant show that their loss of employment is related to, or the result in any way of, the current trade and tariff realities. The changes made to the EI rules are as follows.
Suspension of waiting period requirement
Effective for all new claims for EI benefits that start between March 30, 2025 and October 11, 2025, the one-week waiting period is waived.
Suspending the allocation of separation earnings
Under the usual EI rules, earnings which are paid because of a temporary or permanent loss of employment are considered to be earnings received by the EI claimant, starting from the week of the loss of employment.
Amounts paid as the result of a loss of employment can include vacation pay, pay in lieu of notice, severance pay, closure bonuses, and sick leave credits.
Effective for EI claims that start between March 30, 2025 and October 11, 2025, amounts received as the result of loss of employment (including, but not limited to, the amounts listed above) are not counted as earnings and do not affect the amount of EI benefits which are paid.
Reducing the minimum requirements to qualify for EI benefits
In order to qualify for EI benefits following the loss of employment, an applicant must have worked a minimum number of hours (known as insurable employment) during the previous 52 weeks. The number of required hours of insurable employment is based on the unemployment rate in the region in which the claimant lives – the higher that unemployment rate, the fewer insurable hours are needed to qualify for EI benefits.
Under the temporary new rules, the actual unemployment rate for the region in which an EI claimant lives will be increased by one percentage point, for purposes of determining the number of required hours of insurable employment. That change means that EI applicants will be required to have between 420 and 630 hours of insurable employment in order to qualify for benefits.
This change to the EI rules has a shorter effective period than the other changes outlined above. Specifically, the change to the number of required hours of insurable employment will apply only to claims starting between April 6, 2025 and July 12, 2025.
More information on the temporary Employment Insurance measures can be found on the federal government website at https://www.canada.ca/en/services/benefits/ei/temporary-measures-for-major-economic-conditions.html.
The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.
