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Government of Canada Announces New EI Measures to Manage Fallout from U.S. Trade War
On March 22, 2025, the Government of Canada announced three significant changes to the country’s Employment Insurance (EI) program. The adjustments come in response to the implementation and ongoing threat of tariffs levied by the U.S. government on Canadian imports, and subsequent retaliation north of the border. Some analysts suggest that a full-blown trade war could lead to 600,000 job losses in Canada and decimate several industries, including steel, aluminum, and auto parts manufacturing and assembly.
The temporary measures to the EI program will be implemented through a pilot project and include the following:
- Boosting EI regional unemployment rates by 1%, and establishing a floor so that no EI region has an unemployment rate of less than 7.1%.
EI regional unemployment rates are used to determine who can access EI and the duration of their benefits. This change will effectively reduce the hours required to qualify for regular benefits to a maximum of 630 hours and increase the duration of entitlement by up to four additional weeks. This measure will be in effect for three months.
- Suspending the rules around the treatment of severance, vacation pay, and other monies upon separation.
This change will allow claimants to receive EI benefits sooner since they no longer have to use up the above-noted monies before they can start receiving EI benefits. This measure will be in effect for six months.
- Waiving the waiting period so that workers will be able to receive benefits for the first week of unemployment.
This change will help unemployed workers more easily adjust to a drop in income. All claimant types (regular, special, and fishing) are eligible. This measure will be in effect for six months.
Changes to Work-Sharing
These measures are in addition to temporary changes to the EI Work-Sharing Program, which were announced on March 7. Those adjustments include extending Work-Sharing agreements to a maximum of 76 weeks (up from 38 weeks), and suspending the cooling off period to allow workers to participate in back-to-back agreements. For all details, please read our blog here.
