Canada Relaxes Employment Insurance Rules to Help Workers in an Uncertain Time

In response to economic uncertainty from U.S. tariffs, Canada’s federal government has rolled out temporary employment insurance (EI) rules. The rules apply to American companies that have employees working in Canada, or who have employees who are Canadian residents and working outside of Canada.

HR Policy Global's Take: These measures are designed to help more workers qualify for EI as the unemployment rate rose in March due to hiring pauses and layoffs caused by tariff uncertainties. However, according to legal experts, employers should explore all options before resorting to layoffs.

Here are major changes in the new EI rules:

Boosted regional unemployment rates mean easier qualification (3 months)

The number of insurable hours an employee needs to have worked to qualify depends on the unemployment rate in their area. One significant change of the new rule is to increase the unemployment rate by one percentage point across all regions, ensuring no region's rate falls below 7.1%, which means:

Faster access to EI after job loss

EI claimants can now receive benefits immediately without waiting for severance, vacation pay, or other lump-sum payments to be "used up." Previously, these payments delayed the start of EI benefits. Now, claims won't be delayed, ensuring a smoother transition from employment to EI support. This change is effective for six months.

No more waiting period

Traditionally, most EI claimants had to wait one week without pay before benefits would begin. That waiting period has now been waived, meaning claimants can receive EI starting from their first week of unemployment.

More options for employers under the new rules

Stephen Shore, managing partner at Littler in Toronto, encourages employers to explore cost-saving measures beyond layoffs, highlighting viable alternatives such as temporary EI flexibilities and relaxed rules under the Work-Sharing Program to keep employees, especially your key talents, on the payroll.