Regulations Amending the Employment Insurance Regulations (Pilot Project No. 25): SOR/2026-203

Canada Gazette, Part II, Volume 160, Number 20

Registration
SOR/2026-203 September 25, 2026

EMPLOYMENT INSURANCE ACT

P.C. 2026-861 September 25, 2026

The Canada Employment Insurance Commission makes the annexed Regulations Amending the Employment Insurance Regulations (Pilot Project No. 25) under section 109 of the Employment Insurance Act ^{footnote a}.

September 14, 2026

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 (Pilot Project No. 25), made by the Canada Employment Insurance Commission.

Regulations Amending the Employment Insurance Regulations (Pilot Project No. 25)

Amendment

1 The Employment Insurance Regulations ^{footnote 1} are amended by adding the following after section 77.999:

Pilot Project Establishing Measures to Respond to Major Changes in Economic Conditions and to Support Job Mobility

Purpose

77.9991 Pilot Project No. 25 is established for the purpose of testing the outcomes of applying a set of employment insurance measures to respond to the impacts on employment of major changes in economic conditions and to support job mobility.

Waiting Period

77.9992 The Commission may waive the waiting period in respect of any benefit period that begins during the period beginning on October 11, 2026 and ending on October 9, 2027.

Earnings for Benefit Purposes

77.9993 The earnings paid or payable to a claimant by reason of a lay-off or separation from an employment do not constitute earnings for the purposes referred to in subsection 35(2) if

• (a) the claimant’s benefit period begins during the period beginning on October 11, 2026 and ending on October 9, 2027; 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 October 11, 2026 and ending on October 9, 2027.

Benefit Period and Weeks of Regular Benefits

77.9994 (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 and that begins during the period beginning on October 11, 2026 and ending on June 12, 2027 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 October 11, 2026 and ending on June 12, 2027, subsection 10(14) of the Act is adapted as follows:

Maximum extension under subsections (10) to (13.02)

(14) An extension under one or more of subsections (10) to (13.02) and subsection 77.9994(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.

Reasons for Loss of Employment

77.9995 (1) In respect of any benefit period that begins during the period beginning on October 11, 2026 and ending on October 9, 2027, paragraph 29(a) of the Act is adapted as follows:

• (a) employment refers to the claimant’s last employment before their initial claim for benefits or any employment of the claimant within their benefit period;

(2) In respect of any benefit period that begins during the period beginning on October 11, 2026 and ending on October 9, 2027, the portion of subsection 30(1) of the Act before paragraph (b) is adapted as follows:

Disqualification — misconduct or leaving without just cause

30 (1) A claimant is disqualified from receiving any benefits if the claimant lost their employment because of their misconduct or voluntarily left their employment without just cause, unless

• (a) the claimant has, since losing or leaving the employment, been employed in insurable employment and made a new initial claim for benefits; or

(3) In respect of any benefit period that begins during the period beginning on October 11, 2026 and ending on October 9, 2027, subsections 30(4) to (7) of the Act are adapted as follows:

Suspension

(4) The disqualification is suspended during any week for which the claimant is otherwise entitled to special benefits.

(4) In respect of any benefit period that begins during the period beginning on October 11, 2026 and ending on October 9, 2027, the portion of section 51 of the Act before paragraph (a) is adapted as follows:

Information

51 If, in considering a claim for benefits, the Commission finds an indication from the documents relating to the claim that the loss of employment, as defined in paragraph 29(a), resulted from the claimant’s misconduct or that the claimant voluntarily left employment, the Commission shall

Coming into Force

2 These Regulations come into force on October 11, 2026.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

Foreign tariffs have already significantly affected Canadian industries reliant on trade with the United States, including lumber, steel and aluminum, automobiles and agriculture. Given the potential for considerable lay-offs due to these tariffs, Pilot Project No. 24 was established to test the outcomes of temporarily introducing changes to the EI rules to respond to the employment impacts of major changes in economic conditions.

To date, evidence shows that the measures introduced under Pilot Project No. 24 have provided timely access to income support for workers. Additional evidence is required to assess the effectiveness of these measures in light of shifting economic conditions and continued labour market uncertainty, including ongoing tariffs, while also assessing the effectiveness of a new measure intended to support job mobility.

Background

In March 2025, in anticipation of significant job losses in a tariff-impacted economy, EI Pilot Project No. 24 was introduced (SOR/2025-115) to test the outcomes of applying three temporary 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. On October 11, 2025 (SOR/2025-205), the measures waiving the waiting period and suspending the treatment of monies paid on separation were extended for six months, and the measure adjusting the unemployment rates expired. The pilot project was modified to include a temporary measure providing an additional 20 weeks of benefit entitlement to long-tenured workers. In April 2026, the measures waiving the waiting period, suspending the treatment of monies paid on separation, and providing extra weeks to long-tenured workers were extended for a further six months until October 10, 2026 (SOR/2026-64).

To date, the EI temporary measures in place have strengthened income stability:

• As of September 5, 2026, the measure waiving the waiting period has allowed 2.8 million EI claims to receive benefits for the first week of their EI claim, softening the shock of an income drop.
• As of September 5, 2026, the measure suspending the treatment of monies paid on separation has allowed an estimated 548,000 claims to receive EI benefits immediately after a job separation without having to first exhaust separation payments received from the employer (e.g. severance pay), meaning they have not experienced a delay or reduction to their benefits.
• As of August 30, 2026, the measure providing 20 additional weeks of regular benefits to long-tenured workers has resulted in 71,000 long-tenured workers receiving at least one extra week of benefits.

These preliminary results suggest that temporary EI flexibilities provide timely income support during periods of significant economic disruption and help mitigate the immediate impacts of job loss.

Since Pilot Project No. 24 was first introduced in March 2025, the economic landscape has shifted several times. A series of targeted tariffs on certain sectors were implemented, including 25% tariffs on Canadian automobiles and auto parts, 50% tariffs on Canadian steel, aluminum and copper, and 35.19% duties on softwood lumber. On August 1, 2025, a 35% tariff was imposed on all Canadian goods that are not compliant with the Canada-United States-Mexico Agreement (CUSMA). Since February 24, 2026, a temporary 10% tariff has been in place on all CUSMA non-compliant goods.

On August 22, 2026, the United States imposed new 50% tariffs on $28 billion of Canadian goods, including some goods previously exempted under CUSMA. The new tariffs focus on sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.

Canada has also faced several tariff measures implemented by China since 2025, including 25% tariffs on select Canadian seafood products such as lobster and crab, 100% tariffs on canola meal and canola oil, and the announcement in August 2025 of a 75.8% duty on Canadian canola seed. Since March 1, 2026, China has lifted its tariffs on canola meal, peas and seafood, and reduced its canola seed tariffs to 15%.

The volume of EI claims established between May 2025 and April 2026 has increased by 7% (regular benefits only)^{footnote 2} compared to the same period in the previous year. Regular benefit claimants have also been staying on claim longer. For claims established between February and July 2025, the year-over-year average number of weeks paid increased by 11% compared to the same period in 2024.

The rise in regular claims is disproportionally higher in tariff-impacted sectors, such as the lumber sector (a 6% increase from May 2025 to April 2026 compared to the previous 12-month period) and steel (a 44% increase, mostly in the Northern Ontario EI region). Other EI regions with high concentrations of workers in targeted sectors are also seeing significant increases in claims over the same period. The EI region of Oshawa, for example, saw a 400% increase in EI regular claims established.

The recent increase in EI claims reflects the ongoing uncertainty facing employers in a tariff-impacted economy. Canada’s national unemployment rate rose to a high of 7.1% in August 2025 and then dropped back to 6.4% by August 2026.

Recent external analysis similarly suggests that sectors with a high reliance on exports to the United States remain particularly exposed to tariff-related job losses, while indirect impacts are expected to extend beyond directly affected industries through supply-chain linkages. Estimates by economist Trevor Tombe suggest that recent U.S. tariffs could place approximately 87 000 Canadian jobs at risk, including roughly 52 000 direct exporter jobs and approximately 35 000 jobs linked to suppliers and service industries.^{footnote 3} Similarly, research by economist Joseph Steinberg finds that tariff impacts can propagate through supply chains and lead to employment impacts and worker reallocation beyond the industries directly targeted by tariffs.^{footnote 4} These findings are broadly consistent with EI data showing elevated claims growth in tariff-exposed sectors and regions.

Unemployed workers in Canada also continue to face difficulties finding employment. Out of the 1.5 million unemployed workers in August 2026, 24.0% were long-term unemployed workers (27 weeks or more unemployed), compared to a rate of 23.0% for August 2025 and 20.5% for August 2024.

The tariff situation remains unpredictable, with an ongoing risk of considerable job losses. To reflect the impact of trade developments, up to and including the recent imposition of 50% tariffs, the costing of these measures assumes that roughly 66 000 incremental EI regular benefit claims will be established over the one-year period beginning on October 11, 2026.

The measures under EI Pilot Project No. 25 are sector-agnostic, recognizing that tariffs have had downstream and widespread impacts up and down supply chains and across communities, well beyond the sectors that they target.

Objective

The Regulations Amending the Employment Insurance Regulations (Pilot Project No. 25) [the Regulations] establish EI Pilot Project No. 25, to test measures aimed at reducing the impact of major changes in economic conditions on workers and supporting job mobility.

Description

The Regulations amend the Employment Insurance Regulations to establish EI Pilot Project No. 25 under section 109 of the Employment Insurance Act and includes the following 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. While this measure provides additional income support at the start of an EI claim, it 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 benefits claimants are eligible for this measure. This measure applies to claims with a benefit period that begins on or after October 11, 2026, but no later than October 9, 2027.
• Simplifying the treatment of monies on separation so that earnings paid or payable by reason of a lay-off or separation from employment do not constitute earnings for EI benefit purposes. As a result, claimants receiving benefits will not experience a delay in when their EI benefits become payable, or a reduction of their benefits, if they receive monies on separation. This measure applies to claims with a benefit period that begins on or after October 11, 2026, but no later than October 9, 2027, or to claims where the first week that monies on separation would normally be applied falls during this period.
• Providing 20 extra weeks of benefit entitlement, up to a maximum entitlement of 65 weeks, to EI regular benefit claimants who meet the definition of a long-tenured worker. This measure applies to claims whose benefit period begins on or after October 11, 2026, but no later than June 12, 2027.
• Simplifying the treatment of rules on reasons for separation for claims whose benefit period begins on or after October 11, 2026, but no later than October 9, 2027. Under this measure, only the reason for the worker’s most recent job separation will be examined when making a new claim. Where the claimant’s most recent job loss was through no fault of their own, all hours of insurable employment and earnings accumulated during the qualifying period will be used to determine EI eligibility for benefits, entitlement to weeks of EI regular benefits, and the weekly benefit rate.

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.

EI Pilot Project No. 25 builds on measures previously implemented under Pilot Project No. 24 and introduces an additional temporary measure related to reasons for separation. 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. A regulatory amendment is the only mechanism available to establish EI Pilot Project No. 25 and test temporary measures intended to respond to the employment impacts of major changes in economic conditions.

Regulatory analysis

Benefits and costs

The Regulations establish Pilot Project No. 25, testing the measures waiving the EI waiting period, the treatment of monies paid or payable on separation and additional weeks of regular benefit entitlement for long-tenured workers, in addition to a new measure that simplifies rules on reasons for separation. The primary benefit of the Regulations is the provision of additional EI benefits to claimants through enhanced income support and improved access to EI during periods of significant economic disruption. At the same time, the pilot project will provide additional evidence on the effectiveness of this set of temporary measures as a response to the employment impacts of major changes in economic conditions. This evidence will indirectly benefit the EI program and EI contributors by informing future policy design and program changes. Additionally, the piloted measures will provide economic stimulus with broad indirect benefits for a variety of stakeholders through additional income support to unemployed individuals. These indirect benefits are 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 the Regulations will result in program costs to the EI Operating Account. These increased costs are described and monetized in the "Costs" section below.

Program costs (additional EI benefits paid to claimants) were estimated based on EI administrative data from relevant historical periods. 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 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. Some measures (i.e. waiving the waiting period, the measure suspending the treatment of monies on separation and simplifying the rules on reasons for separation) are expected to result in new claims to the EI program that would not have occurred without the regulatory changes. In addition, each measure could result in more weeks of benefits for claims established in the baseline. For example, claims established by long-tenured workers in the baseline may now receive additional weeks of benefits as a result of this pilot. Claims established in the baseline that benefit from these measures are referred to as “existing” claims.

The baseline number of regular claims that the EI program receives in any given year is approximately 1.37 million. In the current tariff-impacted economic scenario, a further 66 000 regular benefit claims are expected for the one-year period starting on October 11, 2026. In the regulatory scenario, with the introduction of these four temporary measures, an additional 181 000 benefit claims are expected above the baseline, resulting in roughly 1.6 million claims.^{footnote 5} Nevertheless, 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 tariff-related job losses and the associated claims that materialize. The evolving nature of these labour market impacts, and the uncertainty surrounding their magnitude and duration, further support the continued testing of this suite of temporary measures and the collection of additional evidence regarding their effectiveness in responding to major changes in economic conditions.

On the basis of total program costs, Employment and Social Development Canada (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 four fiscal years. Claims that will benefit from the Regulations include claims that will have benefits periods commencing up to October 2027. 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 reflects the scenario that would exist in the absence of the Regulations. The measures that waive the waiting period, suspend the treatment of monies paid on separation and the measure providing extra weeks of regular benefits to long-tenured workers would end October 10, 2026, under Pilot Project No. 24. There would be no regulatory changes to affect the treatment of rules on reasons for separation. The baseline scenario captures claims established on or after October 11, 2026, but no later than October 9, 2027.

Under this scenario, claims established on or after October 11, 2026, would be subject to the EI program’s standard rules:

• claimants would have to serve a one-week waiting period during which benefits are not paid;
• claimants would 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 the period during which EI benefits become payable, or reducing the amount of benefits payable;
• claimants who are long-tenured workers would be entitled to the standard number of weeks of regular benefits, that is, between 14 and 45 weeks of benefits; and
• all job separations in the claimant’s qualifying period would be assessed. If a claimant has left a job voluntarily without just cause, they would only be eligible for EI if they subsequently accumulated the required number of hours of insurable employment. Any hours accumulated in a job that they left voluntarily without just cause would not count toward eligibility.

Total claim volumes for EI regular benefits over the baseline scenario are expected to be about 1.43 million for the one-year period starting on October 11, 2026, while tariffs are in place, higher than the historical average of about 1.37 million claims per year.

Regulatory scenario

Under the regulatory scenario, EI Pilot Project No. 25 is established and includes four temporary measures. The measures waiving the waiting period, suspending the treatment of monies paid on separation and simplifying the rules on reasons for separation apply to claims with benefit periods that begin on or after October 11, 2026, but no later than October 9, 2027. The measure providing an additional 20 weeks of income support to long-tenured workers applies to claims with benefit periods that begin on or after October 11, 2026, but no later than June 12, 2027. The regulatory scenario for the set of measures captures the period beginning on October 11, 2026, when Pilot Project No. 25 comes into effect, and ending on the expiry dates applicable to the temporary measures.

Under this scenario,

• claims whose benefit period begins on or after October 11, 2026, but no later than October 9, 2027, are exempted from serving the one-week waiting period;
• claims whose benefit period begins (or with allocations that would begin) on or after October 11, 2026, but no later than October 9, 2027, do not have their monies on separation allocated for the purposes of EI benefits;
• claims whose benefit period begins on or after October 11, 2026, but no later than June 12, 2027, by eligible long-tenured workers have between 34 and 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; and
• claimants whose benefit period begins on or after October 11, 2026, but no later than October 9, 2027, can use all hours and earnings from insurable employment during their qualifying period toward a claim for EI benefits, as long as their most recent job separation is through no fault of their own (e.g. lay-off, work shortage, voluntary leave with just cause).

In the regulatory scenario, it is expected there will be an increase of 181 600 newly established claims resulting from the continuation, under EI Pilot Project No. 25, of the temporary measures removing the one-week waiting period (35 400 claims) and suspending the treatment of monies paid on separation (77 000 claims), and an increase of 69 200 claims due to simplifying the treatment of rules on reasons for separation. These are claims that would not have been established under the normal EI rules that would apply in the baseline scenario. Note that these numbers are not mutually exclusive, as it is possible for claimants to benefit from more than one of the measures included in the pilot project. Compared to the baseline estimate of approximately 1.43 million regular EI claims, the measures included in EI Pilot Project No. 25 are expected to increase total regular claims to roughly 1.6 million in the one-year period starting on October 11, 2026.^{footnote 6}

Benefits

The primary benefit, estimated at $2,408.4 million (discounted), is the provision of additional EI benefits to claimants. This is equivalent to the total amount of additional EI benefits that are expected to be paid out by the EI Operating Account that would not have been paid out in the baseline scenario. The stakeholders who benefit from this measure are EI claimants. These benefits will occur over four fiscal years (2026–2027 to 2029–2030).^{footnote 7}

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

Under EI Pilot Project No. 25, the Regulations test the temporary measure that waives the one-week waiting period and will result in claimants who do not exhaust their weeks of EI benefit entitlement receiving one additional week of EI benefits over the duration of their claim, relative to the baseline scenario. For example, a claimant is entitled to 30 weeks of regular benefits. However, they only end up being unemployed for 21 weeks before returning to work. Under the normal rules of the program, they would serve the one-week period and then receive 20 weeks of benefits. Under the regulatory scenario, since the waiting period is waived, the claimant can be paid benefits from the first week of unemployment and would, therefore, receive 21 weeks of benefits before returning to work. If that same claimant were to be unemployed for 35 weeks, they would be paid their full 30 weeks of entitlement, regardless of whether they had served the waiting period or not. Accordingly, claimants who exhaust their weeks of EI benefit entitlement are not expected to receive additional benefit payments as a result of this measure.

It is estimated that 1 457 100 claimants receiving EI benefits will receive one extra week of EI benefits and that, on average, $618 will be paid in that week.

Of these, 35 400 are expected to be new benefit claims that would not have received benefits if Pilot Project No. 25 was not implemented. These claims are expected to be from claimants with short durations of unemployment who would likely otherwise not have applied for EI benefits. They are expected to receive an average of $576. The total undiscounted benefit from this element of the measure is estimated to be $20.4 million.

The remaining 1 421 700 claims that will benefit from waiving the waiting period through Pilot Project No. 25 are existing claims that would have claimed EI benefits regardless of the regulatory change but would receive an additional week of EI benefits with an average payment of $619. The total undiscounted benefit from this element of the measure is estimated to be $880.0 million.

The total discounted benefit from extending the measure that waives the one-week waiting period is estimated to be $814.6 million.

The number of claims expected to benefit from 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

Under EI Pilot Project No. 25, the measure suspending the treatment of monies paid on separation will benefit claimants who receive monies on separation (such as severance pay). Under the regulatory scenario, these claimants will be paid additional weeks of EI benefits over the duration of their claim because they will be able to be paid benefits earlier in their benefit period. 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 measure and will be able to receive EI benefits.

It is estimated that 309 400 claims will benefit from suspending the treatment of monies paid on separation, as they will now be paid additional weeks of EI benefits at the start of their claim at an average weekly payment of $641 for 3.0 additional weeks.

Of these, 77 000 are expected to be new benefit claims that would not have received benefits if Pilot Project No. 25 was not implemented. Of these, 71 000 are claims with separation payments that, when allocated based on their normal weekly earnings, would have resulted in no benefit payments because their separation payments were allocated for more weeks than the claimants were unemployed. The remaining 6 000 claims would never have been established and are therefore assumed to be newly established reflecting a behavioural response to this measure. These claims are expected to receive an average of 4.9 weeks of benefits with weekly payments of $646 on average. The total undiscounted benefit from this element of the measure is estimated to be $246.2 million.

The remaining 232,300 claims that benefit from this measure are claimants who would have claimed EI benefits regardless of the regulatory change but would receive 2.3 additional weeks of EI benefits with an average payment of $637, as a result of this measure. The total undiscounted benefit from this element of the measure is estimated to be $346.8 million.

The total discounted benefit from extending the measure to suspend the treatment of monies paid on separation is estimated to be $521.0 million.

3. Benefit of providing 20 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 63 200 existing claims from long-tenured workers will benefit from the extra weeks measure. These claims are expected to use an average of 14.5 of these weeks and receive an average of $627 per week. The total discounted benefit from this element of the measure is estimated to be $496.7 million.

The number of claimants expected to benefit from this measure is based on expected claim volumes, and the take-up rate is based on the exhaustion rate of the long-tenured worker claim population in 2023–2024. The average number of extra weeks used is estimated based on the historic usage of the extra measures in place during the 2009–2010 temporary measures. The average benefit rate is projected based on recent claimant data for long-tenured workers.

4. Benefit of simplifying the rules on reasons for separation

Stakeholders: Claimants whose access to EI or EI benefit entitlement would have otherwise been impacted because of job separations that occurred before their last separation

It is estimated that 105 900 claims will benefit from simplifying the rules on reasons for separation, as more claims become eligible for benefits or receive increased entitlement. On average, claims that benefit from this measure are expected to receive weekly payments of $561 for 11 additional weeks.

Of these, 69 200 are expected to be new benefit claims that would not have qualified for EI benefits if the rules on reasons for separation were not simplified. These claims are expected to receive an average of 15.5 weeks of benefits with weekly payments of $562 on average. The total undiscounted benefit from this element of the measure is estimated to be $600.5 million.

The remaining 36 700 claims that benefit from this measure are claims that would have been established regardless of the Pilot Project but are expected to have a higher entitlement and to receive an average of 2.5 additional weeks of EI benefits, with an average payment of $553 due to the measure. The total undiscounted benefit from this element of the measure is estimated to be $50.8 million.

The total discounted benefit from simplifying the rules on reasons for separation is estimated to be $576.2 million.^{footnote 8}

This measure is intended to support job mobility during periods of economic disruption. In a tariff-impacted economy, workers may leave employment to pursue more secure job opportunities or transition to sectors less affected by trade-related disruptions. Under existing EI rules, a prior separation within the qualifying period can reduce eligibility for benefits or entitlement following a subsequent lay-off. This measure tests whether simplifying the treatment of prior separations better supports worker adjustment and labour market mobility during periods of significant economic change.

The number of claimants expected to benefit from this measure is based on a historical average of job separators whose most recent Record of Employment reflects a separation through no fault of their own (e.g. a lay-off), but who also have one or more prior separations within their qualifying period that would otherwise result in a disqualification (e.g. voluntarily leaving without just cause or dismissal due to misconduct). New claims are estimated from the population that would become eligible under the measure. Existing benefit claims^{footnote 14} are estimated based on the population who were already eligible and established a claim but would have a higher entitlement due to the measure. The average weeks of additional EI benefits paid and the average weekly benefits paid are projected based on historic claim data on claimants with similar hours of work.

Table 1: Summary table of benefits

	Claims that will benefit (A)	Average additional weeks of benefits paid (B)	Average weekly benefits paid (C)	Total benefit (= A x B x C) [$ million]	Present value ($ million)
Measure that waives the waiting period — total	1,457,100	1.0	$618	900.3	814.6
New claims	35,400	1.0	$576	20.4
Existing claims	1,421,700	1.0	619	880.0
Measure that suspends the treatment of monies paid on separation — total	309,400	3.0	$641	593.0	521.0
New claims	77,000	4.9	$646	246.2
Existing claims	232,300	2.3	$637	346.8
Providing 20 additional weeks of regular benefit entitlement to long-tenured workers (existing claims only)	63,200	14.5	$627	574.9	496.7
Simplifying rules on reasons for separation	105,900	11.0	$561	651.3	576.2
New claims	69,200	15.5	$562	600.5
Existing claims	36,700	2.5	$553	50.8
Table 1 note(s) Table 1 note * Note that figures in the above table may not add up to totals due to rounding. Return to table 1 note * referrer

Additional benefits from the pilot project

Beyond the direct benefits to EI claimants, the pilot project is expected to provide further indirect benefits in the form of improved future policy design and 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 other social programs and community supports. This additional spending will provide economic stimulus during a time of potential economic downturn. However, it is difficult to isolate the broader economic impacts of these measures because the federal and provincial governments are taking other actions at the same time that could also provide economic stimulus (e.g. infrastructure spending). Therefore, it is difficult to attribute the effects of the economic stimulus provided by this proposal, so these effects have not been quantified in this analysis.

The information collected and lessons learned as a result of these measures and expansion (e.g. usage of extra weeks of benefits) will be used to inform future policy development. Thus, the information collected serves as an important benefit of the pilot project.

Costs

1. EI program costs from additional EI benefits paid

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

The measures included under EI Pilot Project No. 25 are a cost to the EI Operating Account. This cost is estimated to be $2,408.5 million (discounted), equivalent to the total amount of additional EI benefits to be paid to claimants. These costs will occur over four fiscal years (2026–2027 to 2029–2030).^{footnote 9}

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 pilot project. Activities covered under these costs include processing claims, providing client support through Service Canada call centres and in-person offices, IT system changes, development of communication, procedures, training materials, monitoring the status and usage of the measure, and integrity measures to ensure compliance with EI program rules.

The identified administrative costs are estimated to be $67.5 million (discounted) and will occur over two fiscal years (2026–2027 to 2027–2028).^{footnote 10}

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

Stakeholders: Newly eligible EI claimants

ESDC estimates that there will be approximately 181 600 new claims established^{footnote 15} 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 an estimated wage rate of $31.74 per hour.^{footnote 11}This cost is assumed to occur in the first fiscal year (2026–2027) and does not include costs for the second fiscal year when a marginal number of new claims may be established. The total discounted cost for applying to EI benefits is estimated to be $5.1 million.

Cost-benefit statement

• Number of years: 4 (2026–2027 to 2029–2030)
• Price year: 2026
• Present value base year: 2026
• Discount rate: 7%

Table 2: Monetized benefits (estimates)

Impacted stakeholder	Description of benefit	Year 1 (2026–2027)	Year 2 (2027–2028)	Year 3 (2028–2029)	Year 4 (2029–2030)	Total (present value)	Annualized value
EI claimants	Additional EI benefits paid to claimants	$816.2M	$1,613.3M	$286.6M	$3.4M	$2,408.4M	$711.1M
All stakeholders	Total benefits	$816.2M	$1,613.3M	$286.6M	$3.4M	$2,408.4M	$711.1M

Table 3: Monetized costs (estimates)

Impacted stakeholder	Description of cost	Year 1 (2026–2027)	Year 2 (2027–2028)	Year 3 (2028–2029)	Year 4 (2029–2030)	Total (present value)	Annualized value
EI Operating Account	Program costs	$816.2M	$1,613.3M	$286.6M	$3.4M	$2,408.4M	$711.1M
	Operating costs	$38.3M	$36.3M	$0	$0	$67.5M	$19.9M
Newly eligible EI claimants	Opportunity cost to apply for EI benefits for newly eligible claimants	$5.5M	$0	$0	$0	$5.1M	$1.5M
All stakeholders	Total costs	$860.0M	$1,649.6M	$286.6M	$3.4M	$2,481.0M	$732.5M

Table 4: Summary of monetized benefits and costs (estimates)

Impact	Year 1 (2026–2027)	Year 2 (2027–2028)	Year 3 (2028–2029)	Year 4 (2029–2030)	Total (present value)	Annualized value
Total benefits	$816.2M	$1,613.3M	$286.6M	$3.4M	$2,408.4M	$711.1M
Total costs	$860.0M	$1,649.6M	$286.6M	$3.4M	$2,481.0M	$732.5M
Net cost	$43.8M	$36.3M	$0	$0	$72.6M	$21.4M
Table 4 note(s) Table 4 note * Note that figures in the above tables may not add up to totals due to rounding. Return to table 4 note * referrer

Qualitative and quantitative impacts

The cost of the pilot project will result in upward pressure on the EI employee premium rate equivalent to 1.4 cents per $100 of insurable earnings; the employer rate would increase by 2.0 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 pilot project is 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 pilot project does 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 pilot project does not add any new burden on employers, as no additional action is required on behalf of the employer.

Regulatory cooperation and alignment

The pilot project does not have implications for international agreements, obligations, or voluntary standards. It is not aimed at minimizing or reducing regulatory differences, nor at increasing regulatory compatibility with another jurisdiction. It does 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 pilot project is 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 populations of this pilot project are workers who become unemployed following the imposition of tariffs.

The population that directly benefits is expected to slightly favour men, as they tend to be over-represented in tariff-impacted industries and may, therefore, be likely to be laid off in the current economic environment. However, because the measures apply to all claims, whether they result from tariffs or not and to all types of benefits (regular, special and fishing), the overall profile of those benefiting will reflect the characteristics of EI claimants. As the pilot project is targeted at workers, those of working age (i.e. between 18 and 60) are expected to directly benefit. The measure providing additional weeks of EI regular benefits to long-tenured workers is expected to particularly benefit men (58.7%), as they use more weeks of EI regular benefits, on average. Additionally, workers between the ages of 24 and 54 make up the majority of long-tenured workers, making this age group the most likely to benefit. Similarly, the measure simplifying the treatment of monies on separation particularly supports mid-career, long-tenured and unionized workers who are more likely to receive severance pay following lay-off. Additionally, men receive higher amounts of severance pay on average, so are expected to benefit more. The reasons for separation measure is expected to particularly benefit part-time workers and multiple job holders, where women, youth and newcomers are over-represented. In 2025, part-time workers in Canada represented 18.2% of workers, and in the same year, about 5.6% of employed workers in Canada simultaneously held more than one job.

While the impacts of this pilot project will be felt across the country, they are expected to be especially felt in regions disproportionately impacted by tariffs. For example, workers in British Columbia are expected to be disproportionately affected, since goods, most notably wood and paper products, being targeted by the new tariffs represent over 13% of British Columbia’s exports to the United States. Quebec workers are also expected to be significantly affected, with 10% of its exports now exposed to the new tariffs. This is on top of the 50% tariffs on the province’s major steel and aluminum industry.

Some sectors may be more impacted than others by tariffs, resulting in workers in these sectors being more likely to benefit. Current employment tied to exports to the United States includes approximately 119 312 jobs in the auto industry, 36 000 in steel and aluminum manufacturing, 11 000 in copper production, and 122 000 in forestry and wood product manufacturing.^{footnote 12}Since March 2025, these tariff-impacted sectors have seen consistent increases in EI regular claims established. For example, from March 2025 to May 2026, the steel industry saw claims increase in 13 of 14 months when compared to the same month the year before. Industries expected to be most affected by the new tariffs include dairy and crop production, as well as the paper, plastics and rubber products, electrical equipment and chemical manufacturing industries. The auto sector remains by far the most affected sector by tariffs, with a projected 20 100 job losses over 18 months. ​Men are significantly more likely to work in U.S. trade-dependent industries (12.5%, i.e. 1.3 million workers) compared to women (4.7%, i.e. 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 average of other industries).^{footnote 13}

The pilot project is not expected to have significant impacts on income distribution, though workers with higher incomes may benefit more from suspending the treatment of monies on separation. It is not expected that the pilot project will have disproportionate generational impacts on youth or seniors, as beneficiaries will primarily be 25 to 54 years old.

Implementation, compliance and enforcement, and service standards

Implementation

The Regulations come into force on October 11, 2026. This coming-into-force date is intended to avoid any gaps in the testing of certain measures that are included in both Pilot Project No. 24 and Pilot Project No. 25 and to ensure a seamless transition between successive pilot projects.

The pilot project will be implemented by Service Canada. Implementation of the pilot project requires updating business requirements, technical design, preparation of IT specifications, IT system development and testing (system, integration and acceptance), and project management. Implementation also requires adjustments to procedures and guidance/reference documents, training material, public-facing content and internal communication.

Service delivery considerations associated with this implementation include managing the claimant base and maintaining the resources in place that support the claims associated with the pilot project. The longer the life cycle of a claim, the more ongoing administration and case management may be required.

Compliance and enforcement

As the pilot project is undertaken within the EI program, the same compliance and enforcement authorities as currently found in the Employment Insurance Act apply.

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 in-person offices, online through My Service Canada Account and by contacting the EI Specialized Call Centre. Regarding service standards, ESDC’s objective is to issue a payment or notice of non-eligibility within 28 days of the date on which the EI application is received, 80% of the time.

Contact

Benoit Cadieux
Executive Director
Employment Insurance Policy Directorate
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