Regulations Amending the Employment Insurance Regulations: SOR/2025-205

Canada Gazette, Part II, Volume 159, Number 22

Registration
SOR/2025-205 October 6, 2025

EMPLOYMENT INSURANCE ACT

P.C. 2025-700 October 3, 2025

The Canada Employment Insurance Commission makes the annexed Regulations Amending the Employment Insurance Regulations under section 109 of the Employment Insurance Act ^{footnote a}.

September 10, 2025

Her Excellency the Governor General in Council, on the recommendation of the Minister of Employment and Social Development, under section 109 of the Employment Insurance Act ^{footnote a}, approves the annexed Regulations Amending the Employment Insurance Regulations, made by the Canada Employment Insurance Commission.

Regulations Amending the Employment Insurance Regulations

Amendments

1 Section 77.996 of the Employment Insurance Regulations ^{footnote 1} is replaced by the following:

77.996 The Commission may waive the waiting period in respect of any benefit period that begins during the period beginning on March 30, 2025 and ending on April 11, 2026.

2 Paragraphs 77.997(a) and (b) of the Regulations are replaced by the following:

• (a) the claimant’s benefit period begins during the period beginning on March 30, 2025 and ending on April 11, 2026; or
• (b) those earnings would, but for this section, be allocated under subsections 36(9) to (11) to a number of weeks the first week of which falls within the period beginning on March 30, 2025 and ending on April 11, 2026.

3 The Regulations are amended by adding the following after section 77.998:

Benefit Period and Weeks of Regular Benefits

77.999 (1) In this section, long-tenured worker means a claimant who was paid less than 36 weeks of regular benefits in the 156 weeks before the beginning of their benefit period and who, according to their income tax returns for which notices of assessment have been sent by the Canada Revenue Agency, paid at least 30% of the maximum annual employee’s premium in 7 of the 10 years before the beginning of their benefit period or, if their income tax return for the year before the beginning of their benefit period has not yet been filed with that Agency or a notice of assessment for that year has not yet been sent by that Agency, in 7 of the 10 years before that year.

(2) A benefit period that is established in accordance with section 9 of the Act, that begins during the period beginning on June 15, 2025 and ending on April 11, 2026 and that has not ended in accordance with paragraph 10(8)(d) of the Act before the day on which this section comes into force is extended by 20 weeks if the claimant is a long-tenured worker and has been paid at least one week of regular benefits or benefits by virtue of section 25 of the Act in that benefit period.

(3) In respect of any benefit period that begins during the period beginning on June 15, 2025 and ending on April 11, 2026, subsection 10(14) of the Act is adapted as follows:

(14) An extension under one or more of subsections (10) to (13.02) and subsection 77.999(2) of the Employment Insurance Regulations must not result in a benefit period of more than 104 weeks.

(4) If a claimant’s benefit period has been extended under subsection (2),

• (a) the maximum number of weeks determined under subsection 12(2) or (2.3) of the Act for which benefits may be paid to the claimant in that benefit period because of a reason other than one mentioned in subsection 12(3) of the Act is increased by 20 weeks; and
• (b) the reference in subsection 12(6) of the Act to 50 weeks is to be read as a reference to 70 weeks.

(5) Additional weeks of benefits that are payable under this section do not cease to be payable by reason only that the claimant ceases to be a long-tenured worker during the benefit period.

Coming into Force

4 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

In March 2025, in anticipation of significant job losses in a tariff-impacted economy, Pilot Project No. 24 was introduced (SOR/2025-115) to test the outcomes of applying three temporary employment insurance (EI) measures to respond to major changes in economic conditions: waiving the one-week waiting period; suspending the treatment of monies paid on separation; and adjusting the EI regional unemployment rates upwards. These measures would have all ended on October 11, 2025.^{footnote 2}

As of early August 2025, several foreign tariffs have been introduced or increased since the beginning of the year, along with ongoing threats of further increases and volatility in the labour market. As a result, there continues to be a risk of considerable job losses in a tariff-impacted economy in 2025–2026,^{footnote 3} with some workers experiencing a steep drop in income when they transition to EI and/or needing more time to find new employment.

In this context, the Regulations Amending the Employment Insurance Regulations (the Regulations) introduce changes to allow for continued testing of the outcomes of EI measures to respond to the impacts on employment of major changes in economic conditions. The six-month extension of the measures that waive the waiting period and suspend the treatment of monies paid on separation provides continued EI income support for workers most vulnerable to income shocks and the introduction of the extra weeks measure will offer a longer bridge to re-employment and support job transitions.

Background

Given the potential for widespread layoffs due to tariffs, Pilot Project No. 24 was established to test the outcomes of applying certain EI measures to respond to the employment impacts of major changes in economic conditions. So far, the pilot project has introduced three temporary measures:

• Adjusting the EI regional unemployment rates upwards by one percentage point in all EI regions, to a maximum of 13.1%, with no region below 7.1%. This measure applies to EI claims established between April 6 and October 11, 2025. The adjusted rates allow more workers to qualify for regular and fishing benefits, provide additional weeks of regular benefits, and increase some claimants’ weekly benefit rate.
• Waiving the one-week EI waiting period: This measure allows claimants to receive benefits for the first week of unemployment, softening the shock of an income drop, and applies to claims established between March 30 and October 11, 2025.
• Suspending the treatment of monies paid on separation: This measure allows claimants to receive EI benefits after a job separation without having to first exhaust separation payments received from the employer (e.g. severance payments), meaning they will not experience a delay or reduction in their benefits. The measure applies to claims established, or allocations commencing, between March 30 and October 11, 2025.

Since Pilot Project No. 24 was introduced, several foreign tariffs have been increased or newly implemented. From the United States (U.S.), this includes 25% tariffs on automobiles and auto parts, 50% tariffs on steel, aluminum, and copper, 35.19% duties on softwood lumber and, as of August 1, 2025, 35% tariffs on all Canadian goods that are not compliant with the Canada-United States-Mexico Agreement (CUSMA). There also continue to be threats of increases to existing U.S. tariffs or the introduction of new ones (e.g. 100% tariffs on semiconductors, 200% tariffs on pharmaceuticals). In mid-August, China, which had imposed 25% tariffs on selected Canadian seafood products (e.g. lobster) and 100% tariffs on canola meal and canola oil in late March, announced a 75.8% duty on Canadian canola seed.

There have been declines in the Canadian labour market since March 2025 when these new foreign tariffs first began to take effect. The national unemployment rate in July 2025 was 6.9%, 0.2 percentage points higher than March 2025.^{footnote 4} As of August 2025, 37 of the 62 EI regions have a higher unemployment rate than they did in April.^{footnote 5} Job searchers are also now more likely to remain unemployed from one month to the next: 64.2% of those unemployed in June 2025 remained so in July, up from 56.8% in the corresponding months in 2024.^{footnote 6}

At the same time, the duration of unemployment is increasing. Among all people who were unemployed and looking for work in July 2025, the average duration of unemployment was 23.1 weeks, the highest monthly result since 1999 (excluding the pandemic), and the share who had been looking for work for at least 52 weeks was 13.4% (compared to 8.7% the year before).^{footnote 7} With entitlement to EI regular benefits ranging from 14 to 45 weeks, this employment environment may mean more workers require more time to find a job than the duration of EI benefits available to them. This may acutely impact long-tenured workers who can face particular challenges in finding suitable re-employment due to outdated credentials, changing technology, or inability to work physically demanding jobs.^{footnote 8}

The tariff situation remains unpredictable, with an ongoing risk of considerable job losses. When Pilot Project No. 24 was introduced in March 2025, the increase in claims for EI regular benefits as a result of tariff-related job losses was forecast to be 415 000 in the year following the implementation of the tariff scenario expected at that time. When the unemployment rate measure was extended from three to six months in July 2025, this forecast was reduced to 118 000 given that the tariffs implemented at that time were more targeted than previously expected. Due to the high degree of uncertainty about tariffs being imposed, it is challenging to forecast labour market impacts and these forecasts are subject to variation. Actual claim volumes will depend on factors such as the nature and duration of tariffs in effect, as well as the resiliency of targeted industries and their ability to mitigate the impact of tariffs on production levels and minimize labour force reductions. In light of the ongoing uncertainty, threats of continued increases and the introduction of new tariffs, most notably the August 1, 2025, increase in U.S. tariffs from 25% to 35% on all Canadian goods that are not compliant with CUSMA, the original higher estimate of an increase of 415 000 EI regular claims for the first full year following the implementation of tariffs as of August 2025 was used to estimate the costs of these measures and the number of claimants that could benefit.

Objective

The objective of the Regulations Amending the Employment Insurance Regulations (the Regulations) is to allow for the following: (a) continued testing of the outcomes of waiving the one-week waiting period and suspending the treatment of rules on monies paid on separation; and (b) testing of the outcomes of a new temporary measure providing 20 additional weeks of EI regular benefits to long-tenured workers to respond to the employment impacts of major changes in economic conditions and, in doing so, to continue to provide reliable and timely support to workers affected by tariffs.

Description

The Regulations amend the Employment Insurance Regulations to replace the date of October 11, 2025, in section 77.996 and paragraphs 77.997(a) and (b) with the date of April 11, 2026. This expands the duration of two of Pilot Project No. 24’s temporary measures:

• Waiving the one-week waiting period so that claimants are able to receive benefits for the first week of unemployment, softening the shock of an income drop. This increases the upfront payment workers receive, but does not increase the speed of processing or the maximum amount of benefits to which claimants are entitled during their claim. Regular, special and fishing claimants are eligible for this measure. With the extension, this measure applies to claims with a benefit period that begins on or after March 30, 2025, but no later than April 11, 2026 (previously no later than October 11, 2025).
• Suspending the treatment of monies on separation so that earnings paid or payable by reason of a layoff or separation from employment does not constitute earnings for EI benefit purposes. As a result, claimants receiving benefits will not experience a delay in the payment of EI benefits, or a reduction in their benefits, if they receive monies on separation. With the extension, this measure applies to claims that begin on or after March 30, 2025, but no later than April 11, 2026 (previously no later than October 11, 2025), or to claims where the first week that monies on separation would normally be applied falls during this period.

The Regulations also introduce a new temporary measure providing extra weeks of regular benefits to long-tenured workers. For the purposes of Pilot Project No. 24, long-tenured workers are defined as EI claimants who have paid at least 30% of the maximum annual EI premiums in 7 of the past 10 years and who, over the last 3 years, have received less than 36 weeks of EI regular or fishing benefits. Under this temporary measure, long-tenured workers will be entitled to an additional 20 weeks of regular benefits,^{footnote 9} up to a maximum entitlement of 65 weeks. These additional weeks of regular benefits will remain payable even if a claimant ceases to meet the pilot project’s definition of a long-tenured worker during their benefit period. This new temporary measure will apply to claims established between June 15, 2025, and April 11, 2026, for claimants who meet the pilot project’s definition of a long-tenured worker.

By providing additional weeks of regular benefits, this measure is intended to increase support for long-tenured workers while they look for new employment or while they make use of upskilling and training opportunities allowed for under the Employment Insurance Act.^{footnote 10} To ensure that long-tenured workers who use special benefits can also benefit from the extra weeks of regular benefits, the maximum number of weeks of regular and special benefits will be increased from 50 to 70 for long-tenured workers.

Regulatory development

Consultation

Pilot Project No. 24 was informed by stakeholders’ feedback during ministerial roundtables in January 2025 with employers, unions and labour groups. It was also informed by two years of extensive consultation on EI modernization in 2021 and 2022. A key takeaway from these consultations was the need for the EI program to be responsive in times of economic downturns.

Since the regulatory amendments need to be put in place expeditiously to continue to provide reliable and timely support to workers, no additional consultations were undertaken. Since the amendments will not have any negative impacts on claimants and no additional burden on businesses, the amendments were exempted from prepublication in the Canada Gazette, Part I.

Indigenous engagement, consultation and modern treaty obligations

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an assessment of modern treaty implications was conducted specific to these Regulations. There are no implications for modern treaty obligations or Indigenous engagement in the Regulations.

Instrument choice

The Employment Insurance Act provides the Canada Employment Insurance Commission with the authority to make regulations to introduce pilot projects of up to three years. Regulatory amendment is the only mechanism to make adjustments to Pilot Project No. 24.

Regulatory analysis

Benefits and costs

The Regulations amend Pilot Project No. 24, extending by six months the time during which the EI waiting period is waived and the treatment of monies paid or payable on separation is suspended. They also introduce a new measure that provides 20 additional weeks of regular benefits to long-tenured workers. These amendments allow workers to benefit from increased EI support, and the expected additional EI benefits paid constitute the primary benefit of the Regulations. The economic stimulus provided by the additional income support is an indirect benefit and, as such, is described in the “Qualitative and quantitative impacts” section below. Due to these Regulations being expedited, consultations were not undertaken as part of this cost-benefit analysis.

The additional EI benefits paid out because of these Regulations will result in program costs to the EI Operating Account. Furthermore, there will be operating costs to the Government, reimbursement of which will be sought from the EI Operating Account. These increased program and operating costs are described and quantified in the “Costs” section below.

The program costs (additional EI benefits paid to claimants) were estimated based on EI administrative data from relevant historical periods (i.e. those with similar economic conditions). The basis of program costs is a function of claim volumes that will benefit from the measures (prorating the expected impact on claim volumes resulting from tariff-related job losses), the average number of weeks of benefits that are estimated to be used, and the average estimated weekly rate of benefits paid. For each measure, targeted populations were identified, and key indicators, including exhaustion rates, take-up rates and average weekly benefit amounts, were used to estimate costs. These trends were assumed to remain stable throughout the period each measure is in place. For example, the number of affected claims is expected to be evenly distributed throughout the period each measure is in effect, and average claim durations and weekly benefits paid are assumed to stay constant. Some measures will result in new claims that would not have been established if the measure had not been in place, and will also result in increased generosity of benefits for existing claims.

When Pilot Project No. 24 was introduced in March 2025, claims for EI regular benefits were expected to increase by 415 000 in the first year following tariff implementation. The initial effects of tariffs on unemployment in Canada did not immediately result in this volume of claims, which led to the estimate being recalculated in June to be 118 000 claims over the year. However, given recent increases to tariffs, rising unemployment and continued tariff volatility, an increase in claims for EI regular benefits is again a possibility. As a result, the initial estimate of an increase of 415 000 claims per year was used to estimate costs. The uncertainty of the tariff situation makes forecasting labour market impacts challenging and while these estimations reflect one potential scenario, actual costs will depend on the actual tariff-related job losses that materialize.

The operating costs were estimated by Employment and Social Development Canada (ESDC or the Department) using a workforce impact model. This model uses expected increases in claim volumes and types of interventions to estimate the operating costs of changes to the EI program (e.g. such as increased staff).

On the basis of total program and operating costs, ESDC calculates the estimated increase in the premium rate that would result in the EI Operating Account being in balance after seven years. This incremental change in premiums reflects how the costs are shared between employees and employers, with the EI premium rate calculated for employees and then set at 1.4 times that rate for employers.

The benefits and costs of the Regulations are assumed to occur over three fiscal years, and do not include costs for the fourth fiscal year, as they are expected to be marginal. Claims that will benefit from the Regulations include claims that will be established up to April 2026, and while a claimant’s benefit period is typically 52 weeks, it can be extended to up to 104 weeks in some situations.

A discount rate of 7% is used to calculate present values (PV).

Some numbers used in the “Benefits and costs” section are rounded. As a result, totals may not equal the actual value due to rounding.

Baseline scenario

The baseline scenario reflects the scenario that would exist in the absence of the Regulations. The measures that waive the waiting period and suspend the treatment of monies paid on separation would end October 11, 2025, along with the unemployment rate measure, and the measure providing extra weeks of regular benefits to long-tenured workers would not be introduced.

Under this scenario, claims established on or after October 12, 2025, would be subject to the EI program’s standard rules. The claimants would

• have to serve a one-week waiting period during which benefits are not paid;
• have monies paid or payable upon separation deducted from their weekly EI benefits at the rate of their normal weekly earnings from that employment, delaying or reducing the payment of EI benefits; and
• have entitlement to EI regular benefits between 14 and 45 weeks, depending on the unemployment rate in their EI region and the number of hours of insurable employment accumulated in their qualifying period.

Under this scenario, claim volumes for EI regular benefits are expected to be about 1.9 million per year, while tariffs are in place, higher than the historical average of about 1.4 million claims per year. This reflects the expected increase in job losses and corresponding increase in EI claims resulting from the effects of foreign tariffs (+ 415,000 claims), as well as the increased access to EI from the first six months of the Pilot Project No. 24 and its three measures, which would be in place until October 11, 2025.

Claim volumes for EI special benefits are expected to be about 500 000 per year, while volumes for claims by self-employed fishers are expected to be about 30 000 per year, reflecting historical averages and trends for these types of claimants. The imposition of tariffs is not expected to significantly impact these claim numbers.

Regulatory scenario

Under the regulatory scenario, the measures that waive the waiting period and suspend the treatment of monies paid on separation will be extended until April 11, 2026. In addition, long-tenured workers who establish a claim between June 15, 2025, and April 11, 2026, will be entitled to an additional 20 weeks of EI regular benefits. Lastly, as for the baseline scenario, the unemployment rate measure will end on October 11, 2025.

Under this scenario,

• claims established between March 30, 2025, and April 11, 2026, may be exempted from serving the one-week waiting period;
• claims established (or with allocations that would begin) between March 30, 2025, and April 11, 2026, will not have their monies on separation allocated for the purposes of EI benefits; and
• claims established between June 15, 2025, and April 11, 2026, by long-tenured workers will have 34 to 65 weeks of regular benefit entitlement, depending on the unemployment rate in their EI region and the number of hours of insurable employment accumulated in their qualifying period.

It is expected there will be an increase of about 73 400 regular benefit claims over the baseline scenario, bringing the total regular claims expected in the first year of tariffs to about 1.98 million.

Benefits

The primary benefit is the provision of additional EI benefits to claimants and is estimated to be $2,468.9 million (undiscounted). This is equivalent to the total amount of additional EI benefits that is expected to be paid out by the EI Operating Account. The stakeholders who benefit from this measure are EI claimants. These benefits will occur over three fiscal years (2025–2026 to 2027–2028).

The methodology, assumptions and how claimants are expected to benefit are described below. Note that numbers in this section below may not add up due to rounding.

1. Benefit of extending the measure that waives the one-week waiting period

Stakeholders: Claimants who do not exhaust their EI benefits.

The Regulations’ extension of the measure that waives the one-week waiting period will result in claimants who do not exhaust their EI benefit entitlement receiving an additional week of EI benefits, relative to the baseline scenario. For example, a claimant who would receive 30 weeks of entitlement, but would only be paid benefits for 20 of these weeks before they found new employment will now receive benefits for 21 weeks under the regulatory scenario due to the waiving of the waiting period. If that same claimant is paid their full 30 weeks of entitlement and their waiting period is waived under the regulatory scenario, they will not benefit from the extension of this measure.

It is estimated that 539 500 claimants receiving EI regular benefits will benefit from the extension of the measure waiving the waiting period, receiving an additional week of EI benefits at an average benefit rate of $602. Of these, 10 900 are expected to be new regular benefits claims who would not have received benefits if the waiting period measure was not extended. New claims resulting from the extension of the waiting period measure are expected to be from claimants with short durations of unemployment who would likely otherwise not have applied for regular benefits. The total undiscounted benefit from this element of the measure is estimated to be $324.7 million.

It is estimated that 154 000 claimants receiving EI special benefits will benefit from the extension of the waiting period measure, receiving an additional week of EI benefits at an average benefit rate of $567. Of these, 3 700 are expected to be new special benefits claimants who would not have received benefits if the waiting period measure was not extended. The total undiscounted benefit from this element of the measure is estimated to be $87.3 million.

It is estimated that 8 600 claimants receiving EI fishing benefits will benefit from the extension of the waiting period measure, receiving an additional week of EI benefits at an average benefit rate of $649. Of these, 13 are expected to be new fishing benefits claimants who would not have received benefits if the waiting period measure had not been extended. The total undiscounted benefit from this element of the measure is estimated to be $5.6 million.

The total undiscounted benefit from the extension of the measure that waives the one-week waiting period is estimated to be $417.6 million.

The number of claims expected to benefit from the extension of the waiting period measure is based on expected claim volumes and historic exhaustion rates during economic downturns. The average benefit rate is projected from recent claimant data for the different claimant populations (claimants receiving EI regular, benefits, special benefits and/or fishing benefits).

2. Benefit of extending the measure that suspends the treatment of monies paid on separation

Stakeholders: Claimants who receive monies on separation and return to work before exhausting their EI benefit entitlement; claimants whose monies on separation exceed two years of income.

The Regulations’ extension of the measure suspending the treatment of monies paid on separation will benefit claimants who will be paid additional weeks of EI benefits because these benefits will be paid earlier in their benefit period as a result of the measure. Similarly, claimants who would normally not have applied for EI benefits because they knew that the money they received upon separation of employment would delay the payment of EI benefits may choose to apply as a result of the extension of the measure and will be able to receive EI benefits.

It is estimated that 115 300 regular benefit claimants will benefit from the extension of the measure suspending the treatment of monies paid on separation, as they can now be paid their full EI entitlement, at an average benefit rate of $593 for 2.36 additional weeks. The total undiscounted benefit from this element of the measure is estimated to be $161.5 million.

It is estimated that 58 800 EI regular benefits claimants would benefit from the extension of the monies on the separation measure, as otherwise, benefits would not have been payable. This includes both claimants newly incentivized to apply for EI benefits (about 15 100), as well as claimants whose separation payments, when allocated based on their normal weekly earnings, defer EI payments beyond the 104-week maximum benefit period (approximately 43 700). These claimants will receive EI regular benefits as a result of the extension of the measure that suspends the treatment of monies paid on separation and are expected to receive an average of 7.29 weeks of EI regular benefits, at an average benefit rate of $612. The total undiscounted benefit from this element of the measure is estimated to be $262.3 million.

While all types of claims may benefit from the extension of this measure, due to the low volume of claims that are expected to benefit, which are not regular benefit claims, only the benefits for regular claims have been quantified.

The total undiscounted benefit from extending the measure that suspends the rules on monies on separation is estimated to be $423.8 million.

The number of claims expected to benefit from each element of the measure is based on expected claim volumes, historic rates of claimants receiving monies on separation, and historic EI usage and exhaustion rates of these claimants. The average weeks of additional EI benefits paid and the average benefit rate are estimated based on historic claim data for this population of claimants.

3. Benefit of providing extra weeks of EI regular benefits to long-tenured workers

Stakeholders: Claimants who are long-tenured workers and who would otherwise exhaust their EI benefit entitlement.

It is estimated that 190 600 claimants who are long-tenured workers will benefit from the extra weeks measure. These claimants are expected to use an average of 14.1 of these weeks, at an average benefit rate of $606. The total undiscounted benefit from this element of the measure is estimated to be $1,627.5 million.

The number of claimants expected to benefit from this measure is based on expected claims volumes and historic uptake rates of extra weeks by long-tenured workers when previously implemented in economic downturns. The average number of extra weeks used is also estimated based on the historic usage of these measures. The average benefit rate is projected based on recent claimant data for long-tenured workers.

Table 1: Summary table of benefits ^{table 1 note *}

	Claims that will benefit (A)	Average additional weeks of benefits paid (B)	Average weekly benefit rate (C)	Total benefit (= A x B x C)
Extension of measure that waives the waiting period — Total	701 900	—	—	$417.6M
Regular benefits claims	539 500	1.0	$602	$324.7M
Special benefits claims	154 000	1.0	$567	$87.3M
Fishing benefits claims	8 600	1.0	$649	$5.6M
Extension of measure that suspends the treatment of monies paid on separation — Total	174 100	—	—	$423.8M
Existing regular claims receiving additional benefits	115 300	2.36	$593	$161.5M
Claims newly receiving regular benefits	58 800	7.29	$612	$262.3M
Providing 20 additional weeks of regular benefit entitlement to long-tenured workers	190 600	14.1	$606	$1,627.5
Table 1 note(s) Table 1 note * Note that numbers in the table may not add up due to rounding. Return to table 1 note * referrer

Additional benefits from the Regulations

Beyond the direct benefits to EI claimants, these Regulations are expected to provide further indirect benefits in the form of economic stimulus. It is expected that claimants who receive additional EI benefits will spend this additional income in their local economies and/or rely less on social programs and community supports, providing economic stimulus during a time of potential economic downturn. The magnitude of this benefit has not been quantified for this analysis due to data limitations and challenges with reliably estimating this type of impact.

The Regulations extend and expand the measures whose outcomes are being tested through Pilot Project No. 24. The information collected and lessons learned as a result of this extension and expansion (e.g. usage of extra weeks of benefits), which may be used to inform future policy development, will be an additional, important benefit of the Regulations. Although the benefit of this data cannot be quantified and is not included in the analysis, it is a benefit of the Regulations and is acknowledged qualitatively.

Costs

There are three main costs associated with the Regulations.

1. EI program costs from additional EI benefits paid

Stakeholders: Employers and workers who pay into the EI Operating Account.

The provision of additional EI benefits to claimants is a cost to the EI Operating Account. This cost is estimated to be $2,468.9 million (undiscounted), equivalent to the total amount of additional EI benefits to be paid to claimants. These costs will occur over three fiscal years (2025–2026 to 2027–2028).

2. EI operational costs related to the administration of the Regulations

Stakeholders: Employers and workers who pay into the EI Operating Account.

ESDC will incur costs for administrating the Regulations. Activities covered under these costs include processing claims, providing client support through Service Canada call centres, IT system changes, development of communication and training materials, monitoring the status and usage of the measure, and integrity measures to ensure compliance with EI program rules.

These costs, which will be paid through the EI Operating Account, are estimated to be $225.5 million (undiscounted) and will occur over three fiscal years (2025–2026 to 2027–2028).

3. Opportunity cost of applying for EI benefits for newly eligible claimants

Stakeholders: Newly eligible EI claimants.

ESDC estimates that there will be approximately an additional 73 400 new claims that would not have been established under the baseline scenario. There will be an opportunity cost to these claimants for applying to EI. This analysis assumes it will take an average of one hour to apply for benefits at a wage rate of $30.65 per hour,^{footnote 11} at an estimated opportunity cost of $2.2 million (undiscounted). This cost is assumed to occur in the first fiscal year (2025–2026) and does not include costs for the second fiscal year when a marginal number of the new claims may be established.

Cost-benefit statement

• Number of years: 3 (2025–2026 to 2027–2028)
• Price year: 2025
• Present value base year: 2025
• Discount rate: 7%

Table 2: Monetized benefits (estimates) ^{table 2 note *}

Impacted stakeholder	Description of benefit	Year 1 (2025–2026)	Year 2 (2026–2027)	Year 3 (2027–2028)	Total (present value)	Annualized value
EI claimants	Additional EI benefits paid to claimants	$739.7M	$1,616.3M	$112.9M	$2,195.2M	$836.5M
All stakeholders	Total benefits	$739.7M	$1,616.3M	$112.9M	$2,195.2M	$836.5M
Table 2 note(s) Table 2 note * Note that numbers in the table may not add up due to rounding. Return to table 2 note * referrer

Table 3: Monetized costs (estimates) ^{table 3 note *}

Impacted stakeholder	Description of cost	Year 1 (2025–2026)	Year 2 (2026–2027)	Year 3 (2027–2028)	Total (present value)	Annualized value
EI premium payers	Program costs	$739.7M	$1,616.3M	$112.9M	$2,195.2M	$836.5M
	Operating costs	$154.7M	$70.7M	$0.1M	$206.4M	$78.6M
Newly eligible EI claimants	Opportunity cost to apply for EI benefits for newly eligible claimants	$2.2M	$0.0M	$0.0M	$2.1M	$0.8M
All stakeholders	Total costs	$896.6M	$1,687.0M	$113.0M	$2,403.7M	$915.9M
Table 3 note(s) Table 3 note * Note that numbers in the table may not add up due to rounding. Return to table 3 note * referrer

Table 4: Summary of monetized benefits and costs (estimates) ^{table 4 note *}

	Year 1 (2025–2026)	Year 2 (2026–2027)	Year 3 (2027–2028)	Total (present value)	Annualized value
Total benefits	$739.7M	$1,616.3M	$112.9M	$2,195.2M	$836.5M
Total costs	$896.6M	$1,687.0M	$113.0M	$2,403.7M	$915.9M
Net cost	$156.9M	$70.7M	$0.1M	$208.5M	$79.4M
Table 4 note(s) Table 4 note * Note that numbers in the table may not add up due to rounding. Return to table 4 note * referrer

Qualitative and quantitative impacts

The cost of the Regulations will result in upward pressures on the EI employee premium rate equivalent to 1.47 cents per $100 of insurable earnings; the employer rate would increase by 2.05 cents per $100 of insurable earnings. EI premium rates are set to ensure the EI Operating Account breaks even over a seven-year period.

The Regulations are also expected to provide indirect benefits in the form of income stabilization and economic stimulus. Claimants who will receive the additional EI benefits are expected to spend much of this additional income in their local economies, providing economic stimulus and helping to soften the impact of a potential downturn in the economy.

Small business lens

Analysis under the small business lens concluded that the Regulations do not impact Canadian small businesses. No regulatory, administrative or compliance burden on small businesses has been identified. As per standard processes currently in place for businesses to comply with the EI program, businesses will continue to be required to provide a record of employment when there is a termination, without any change in the form or frequency.

One-for-one rule

The one-for-one rule does not apply, as there is no incremental change in administrative burden on business and no regulatory titles are repealed or introduced. The Regulations do not add any new burden on employers, as no additional action is required on behalf of employers.

Regulatory cooperation and alignment

The Regulations do not have implications for international agreements, obligations or voluntary standards. They are not aimed at minimizing or reducing regulatory differences, nor at increasing regulatory compatibility with another jurisdiction. They do not introduce specific Canadian requirements that differ from existing regulations in other jurisdictions for an international program.

The EI program is a federal program that applies across Canada.

International obligations

The Regulations are not subject to obligations in Canada’s international trade agreements.

Effects on the environment

In accordance with the guidance on conducting strategic environmental and economic assessments (SEAA), a Climate, Nature, and Economy Lens (CNEL) template was completed. The completion of this template has concluded that an assessment of environmental and economic effects is not required, nor is an assessment of cross-cutting considerations.

Gender-based analysis plus

The target population of these Regulations is workers who become unemployed following the imposition of tariffs.

The population who directly benefits is expected to be, overall, gender balanced. As the Regulations are targeted to workers, those of working age (i.e. between 18 and 60) are expected to directly benefit. The new measure providing additional weeks of EI regular benefits to long-tenured workers is expected to particularly benefit men (59.7%) and older workers (average age of those benefitting of 47 years).

While workers from all sectors will benefit from the Regulations, some sectors may be more impacted than others by tariffs, resulting in workers in these sectors being likely to benefit more. Current employment tied to exports to the United States includes approximately 175 000 jobs in the auto industry, 35 000 in steel and aluminum manufacturing, 11 000 in copper production, and between 179 000 to 186 000 in softwood lumber.^{footnote 12} The newly implemented tariffs on these products place a significant share of these jobs at risk, given the heavy reliance of these sectors on cross-border trade. ​Men are significantly more likely to work in U.S. trade-dependent industries (12.5%; 1.3 million workers) compared to women (4.7%; 455 000 workers). Workers with lower educational attainment are also more likely to be employed in these industries (high school diploma or lower: 11%; post-secondary education below a bachelor’s degree: 9.4%; bachelor’s degree or higher: 6.7%). These workers also receive above average wages ($37.24/hour, 6.5% higher than the $34.97/hour average in other industries).^{footnote 13}

The indirect benefits, such as increased economic stimulus from more generous EI benefits, are expected to be general and apply to all groups.

The Regulations are not expected to have significant impacts on income distribution or have generational impacts.

Implementation, compliance and enforcement, and service standards

Implementation 

The Regulations will come into force on the day on which they are registered.

The Regulations will be implemented under the legacy EI system by Service Canada. The work required for Service Canada to implement the Regulations includes updating business requirements, technical design, preparation of IT specifications, IT system development and testing (system, integration and acceptance), and project management. Implementation also includes adjustments to procedures, guidance and reference documents, training material, public-facing content and internal communication.

Service delivery considerations associated with this implementation include managing the claimants’ base and maintaining the resources in place that support the claims associated with the Regulations. The longer the life cycle of a claim, the more claim maintenance is required.

Compliance and enforcement

As the Regulations are undertaken within the EI program, the same compliance and enforcement authorities as currently found in the Employment Insurance Act apply. Compliance reviews consist of ensuring compliance with applicable legislation, regulations and policies, including identification of cases of error, misrepresentation and abuse. Enforcement investigations occur when there are reasonable grounds to suspect that an offence against the Employment Insurance Act has occurred and, where supported by the evidence, a prosecution may be pursued.

Service standards

Service Canada provides clients with a single point of access to a wide range of government services and benefits, including the processing and payment of EI claims. Clients can access information, apply and get support for these services through a national network of service centres, online through tools like the My Service Canada account, and by telephone using the 1 800 O-Canada number. Regarding service standards, the Department’s objective is to issue a payment or notice of non-eligibility within 28 days from the date on which the EI application is received, 80% of the time.

Contact

Benoit Cadieux
Director
Employment Insurance Policy
Skills and Employment Branch
Employment and Social Development Canada
140 Promenade du Portage, Phase IV
Gatineau, Quebec
K1A 0J9
Email: benoit.cadieux@hrsdc-rhdcc.gc.ca