Question Period Note: EMPLOYMENT INSURANCE (EI) SUPPORTS FOR WORKERS IMPACTED BY TARIFFS

What is the Government doing to ensure Employment Insurance is supporting workers and employers impacted by foreign tariffs?

• The Government will not stand by as foreign tariffs are imposed on Canadian goods. We will continue to ensure that supports are available to Canadian businesses and workers.

• Employment Insurance plays an important role in supporting workers and stabilizing the economy during economic disruptions. However, in extraordinary times, the regular parameters of the program may need adjustments. That is why the Government took early action to introduce EI and Work-Sharing temporary measures in March.

• The Work-Sharing temporary special measures have seen a strong uptake by employers, helping avert close to 10,000 layoffs, including in the hard-hit manufacturing sector.

• The three other EI temporary measures are also helping workers access the income support they need by:
1) waiving EI’s one-week waiting period,
2) suspending the rules around separation so workers don’t have to exhaust severance pay before collecting EI, and
3) making it easier to access EI by adjusting regional unemployment rates.

Employment Insurance Pilot Project
• The Government of Canada has established an Employment Insurance (EI) pilot project to test three temporary measures to respond to major changes in economic conditions, providing additional income support and financial stability for workers impacted following the imposition of tariffs. The measures being tested as part of the pilot project are:
o waiving the one-week EI waiting period (in effect from March 30 to October 11, 2025);
o suspending the rules around treatment of monies paid on separation, including severance pay (in effect from March 30 to October 11, 2025); and
o adjusting the EI regional unemployment rates up by one percentage point in all EI regions (to a maximum of 13.1%) with no region seeing an unemployment rate of less than 7.1%. This measure reduces the hours required to qualify for regular benefits to no higher than 630 hours and increases the number of weeks of entitlement by up to four additional weeks (in effect from April 6, 2025 to July 12, 2025).

Waiting period
All workers who qualify for any type of EI benefits are subject to a one-week waiting period during which benefits are not payable. Under the pilot project, this waiting period is being waived.
• As a result, claimants can receive benefits for the first week of unemployment, softening the shock of an income drop.
o Waiving the waiting period could result in some claimants receiving an extra week of benefits but does not increase the speed of processing or the maximum number of weeks of benefits to which claimants are entitled during their claim.
• Regular, special, and fishing benefit claimants are eligible for this measure, which applies to claims with a benefit period that begins between March 30, 2025, and October 11, 2025.
Monies on separation
• A claimant may receive “monies on separation” from their employer after a job separation, such as severance or vacation pay. Monies on separation received by an EI claimant are deducted from their weekly EI benefits at the rate of their normal weekly earnings from that employment. These deductions either delay or reduce the payment of EI benefits to a claimant until all their monies on separation have been deducted.
• Under the pilot project, monies on separation do not constitute earnings for EI benefit purposes.
• This allows claimants to receive EI benefits sooner, as they can start receiving benefits from when they are laid off and not have to wait until they have exhausted the monies to which they are entitled on separation of employment.
• This measure applies to EI claims between March 30, 2025, and October 11, 2025, depending on either the beginning of their benefit period or when monies on separation deductions would begin.
EI regional unemployment rates
• The unemployment rate applicable to each of the country’s 62 EI regions is updated monthly, based on Statistics Canada data. This unemployment rate is used to determine:
o the minimum number of hours of insurable employment required to access EI regular benefits (i.e., 420 to 700 hours);
o entitlement to regular benefits (i.e., 14 to 45 weeks);
o the minimum earnings from fishing to qualify for EI fishing benefits (i.e., $2,500 to $4,200); and
o the weekly benefit rate of EI regular, special, and fishing benefits claimants (i.e., the number of best weeks of earnings or divisor used, between 14 and 22).
• Under the pilot project, a minimum unemployment rate of 7.1% is in effect for three months during which the EI unemployment rate is being adjusted upward by one percentage point in all EI regions, to a maximum of 13.1%.
• As a result:
o For EI regular benefit claimants, the number of hours of insurable employment required to qualify will decrease for some claimants (with no more than 630 hours compared to up to 700 normally), more weeks of regular benefits may be available (up to four more weeks), and the weekly benefit rate could increase.
o For EI fishing benefit claimants, the earnings threshold required to qualify will decrease for some claimants (with no more than $3,800 compared to up to $4,200 normally) and the weekly benefit rate could increase.
o For EI special benefit claimants, the weekly benefit rate could increase.
• This measure applies to claims with a benefit period that begins between April 6, 2025, and July 12, 2025.

Work-Sharing
• The Work-Sharing program helps employers and employees avoid layoffs when there is a decrease in business activity beyond the employer's control. The program provides income support for eligible employees who work a temporarily reduced work week.
• Through Work-Sharing, employers can retain skilled workers and avoid the expensive process of recruiting and training new employees when their business returns to normal levels by employees working a reduced work-week instead of being laid off. It also helps employees maintain their skills and jobs by supplementing their wages with Work-Sharing benefits for the days they are not working.
• The Work-Sharing Program may introduce temporary special measures at any time to provide additional support for affected businesses during a period of economic downturn, natural disaster or if a national emergency is declared. The special measures provide targeted supports to help businesses recover and avoid layoffs.
• The following temporary Work-Sharing flexibilities are in place between March 7, 2025 and March 6, 2026:
o The maximum duration of a Work-Sharing agreement is extended from 38 weeks to up to 76 weeks.
o The requirement to serve a cooling-off period between successive Work Sharing agreements is being waived.
o Employer eligibility is expanded to include:
 businesses that have been in operation in Canada for 1 year;
 non-profit and charitable organizations experiencing a reduction in revenue levels as a direct or indirect result of the tariffs;
 cyclical or seasonal employers; and,
 employers experiencing a decrease in work activity of less than 10% and allowing utilization of Work-Sharing to exceed 60%.

o Employee eligibility under the Program is expanded to include workers who are:
 not year-round, permanent, full-time or part-time employees, specifically seasonal or cyclical employees; and
 not necessarily needed to carry out the day-to-day functions of the business, but who are assisting in the employer’s recovery efforts.
o Reporting requirements are simplified to focus on maintaining business viability in the face of tariffs (instead of a plan to return to normal business, as is normally required.

If pressed - Costs of the EI temporary measures:
• The Government remains committed to supporting Canadians, including by using counter-tariff proceeds to protect workers and companies affected by the tariffs.

• While the temporary measures introduced may increase the EI premium rate, these rates are near historic lows and annual increases are limited to ensure they remain stable and predictable.

“Canadian workers have always shown resilience in the face of significant challenges, but the impact of tariffs and the resulting economic uncertainty are beyond their control. That’s why the Government of Canada is acting swiftly to make changes to critical programs that protect Canadian jobs and workers and the Canadian economy.” — The Hon. Steven MacKinnon, Previous Minister of Jobs and Families (March 22, 2025)