Canada Temporarily Changes Employment Insurance in Response to Tariffs
In response to the current trade war between the United States and Canada, the federal government has introduced several temporary changes to the employment insurance program. These include:
- No longer counting payment upon termination, including pay in lieu of notice or severance pay, against EI benefits;
- Waiving the customary one week waiting period for receiving EI benefits;
- Increasing the eligibility criteria based on the geographical unemployment rate.
These measures apply to any claims commenced or occurring between March 30, 2025 and October 11, 2025.
How do these recent EI changes impact employees?
The most important change is the suspension of counting termination payment against EI benefits. Typically, when an employee receives termination payment, their EI benefits will only kick in once the period covered by that payment ends.
In many cases where the employee is negotiating their termination payment, they will receive EI benefits while those negotiations are ongoing.
While courts have established that receiving EI benefits does not offset an employer’s obligation to provide termination payment, employees are required to refund EI benefits that are covered by termination payments.
In negotiations, this typically means that once the employee receives the termination payment, they have to inform Service Canada and may be required to pay back any EI benefits received for the period covered by the termination payment. This can often delay settlement payments, as employers may demand that the employee fully satisfy their repayment obligations before releasing the termination payment.
Under this temporary measure, this situation no longer applies. Employees can collect EI benefits immediately after they are terminated, regardless of what payments they receive upon termination of their employment. Furthermore, any EI benefits the employee received will not be relevant to negotiations over termination pay while this measure is in effect.
Theoretically this should change little for employers, as their obligations to provide termination payment is separate from any EI benefits the employee receives (the repayment obligations are purely between the employee and Service Canada).
If you are an employee who has been terminated, these temporary measures are relevant to your situation. Whitten and Lublin is here to help you navigate your rights to both termination payment and EI benefits. Contact Whitten & Lublin or by phone at (416) 640-2667.
Author – Aaron Zaltzman