Regulations Amending the Employment Insurance Regulations: SOR/2025-150

Canada Gazette, Part II, Volume 159, Number 15

Registration
SOR/2025-150 July 4, 2025

EMPLOYMENT INSURANCE ACT

P.C. 2025-566 July 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}.

June 30, 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

Amendment

1 The portion of section 77.998 of the Employment Insurance Regulations ^{footnote 1} before paragraph (a) is replaced by the following:

77.998 If the later of the weeks referred to in subsection 10(1) of the Act begins during the period beginning on April 6, 2025 and ending on October 11, 2025 and the regional rate of unemployment that applies to the claimant as determined under section 17 of these Regulations is less than 13.1%, the regional rate of unemployment that applies to the claimant is deemed to be

Coming into Force

2 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). This pilot project tests the outcomes of applying three temporary EI measures to respond to major changes in economic conditions. One measure, which adjusts EI unemployment rates upward, thereby increasing access to and adequacy of benefits, would have ended on July 12, 2025.

The foreign tariffs currently in place on Canadian goods are targeted to specific products (e.g. auto, steel, aluminum, canola), rather than 25% universal tariffs from the United States originally anticipated. However, ongoing threats of increases to existing tariffs or the introduction of new ones continue (e.g. the threat in early May 2025 of 100% tariffs on movies produced outside of the United States, the potential increase of duties on softwood lumber from 14.4% to 34.5% this fall). Considerable job losses continue to be expected in a tariff-impacted economy in 2025–2026,^{footnote 2} and a three-month extension of the unemployment rate measure ensures that workers continue to be supported with timely access to EI benefits during major changes in economic conditions.

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. The pilot project introduced three temporary measures:

• Adjusting the EI regional unemployment rates upward 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 July 12, 2025, and helps improve support in EI regions where EI unemployment rates, which are based on a three-month moving average (or 12-month moving average in the territories), do not necessarily reflect the most recent job losses. The adjusted rates
  • allow more workers to qualify for regular benefits (no more than 630 hours of insurable employment needed, compared to up to 700 hours normally), as well as for fishing benefits (no more than $3,800 of insurable earnings needed, compared to up to $4,200 normally);
  • provide up to four additional weeks of regular benefits, with minimum entitlement starting at 17 weeks (instead of 14 or 15); and
  • increase some claimants’ weekly benefit rate (calculated using no more than the 20 best weeks of earnings instead of up to the 22 weeks normally).
• Waiving the one-week EI waiting period. This measure, which allows claimants to receive benefits for the first week of unemployment, softening the shock of an income drop, 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 to their benefits. The measure applies to claims established, or allocations commencing, between March 30 and October 11, 2025.

The tariff situation remains unpredictable, with an ongoing risk of considerable job losses. Based on more recent estimates of tariff-related job losses, an increase of 118 000 claims for EI regular benefits is forecasted for 2025–2026 (a reduction from the previous forecast of 415 000 additional claims resulting from tariff job losses). Whereas Pilot Project No. 24 (with the unemployment rate measure ending July 12, 2025) was initially estimated to increase the number of claims for regular benefits in 2025–2026 by about 80 800, this estimate has been revised to about 72 000 given the reduction to forecasted job losses in 2025–2026. Due to the high degree of uncertainty on tariffs being imposed, it is challenging to forecast labour market impacts. Therefore, these forecasts are based on tariffs that were in place as of the end of May 2025.

Since March 2025, there have been declines in the labour market: the national unemployment rate in May 2025 increased from 6.6% (February 2025)^{footnote 3} to 7.0%.^{footnote 4} The employment rate has similarly declined slightly, from 61.1% to 60.8% over the same period.^{footnote 5}

The unemployment rate measure for Pilot Project No. 24 particularly helps workers in regions where, despite early direct and indirect job losses from tariffs, the EI unemployment rate remains low. For example, in EI regions with job losses in trade-exposed sectors, such as South Central Ontario (automotive sector), Lower Saint Lawrence and the North Shore (aluminum), Central Quebec (steel and aluminum) and Southern Saskatchewan (potash, canola), the EI unadjusted unemployment rate was still less than 6.1% as of June 2025. While the impacts of job losses may be acutely felt at the community level, EI unemployment rates are calculated at the EI region level using a three-month moving average, meaning that concentrated job losses will not immediately impact EI unemployment rates. The ongoing unpredictability of the foreign tariff situation creates a risk of a sudden surge of unemployment that would not immediately be reflected in the EI unemployment rates. Without the temporary unemployment rate measure, workers in these regions would be required to have 700 hours of insurable employment to qualify for EI regular benefits, with fewer weeks of regular benefits payable and lower weekly benefit rates.

Objective

The objective of the Regulations Amending the Employment Insurance Regulations (the Regulations) is to allow for continued testing of the outcomes of applying an upward adjustment of the EI unemployment rate 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 Employment Insurance Regulations are amended to replace the date of July 12, 2025, in section 77.998 with the date of October 11, 2025. This expands the time period in which the EI regional unemployment rates are adjusted upwards under the pilot project. All other parameters of Pilot Project No. 24 remain unchanged.

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, during which the key priority of labour groups was improving access to EI for workers who do not have enough hours of insurable employment to qualify. Another 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 in force prior to the measure ending on July 12, 2025, 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.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an initial assessment of modern treaty implications was conducted when Pilot Project No. 24 was introduced. That assessment found no implications for modern treaty obligations or Indigenous engagement in the Pilot Project. As the regulatory amendments extend Pilot Project No. 24’s unemployment rate measure, no additional assessment was required.

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 from three to six months the time during which EI unemployment rates are adjusted upwards. This extension provides workers who become unemployed with increased access to EI benefits and allows for additional weeks of regular benefits and higher weekly benefit rates. The expected additional EI benefits paid constitutes the primary benefit of the Regulations. The economic stimulus provided by the additional income support is an indirect benefit and 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 due to 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 (EI benefits to be paid to claimants) were estimated using the EI microsimulation model. Using historical claimant data, this model allows the EI program to assess the impact of varying different program parameters. For this analysis, the parameters used by the model were assumed to be constant over the duration of the extension. For example, impacted claimants are assumed to be evenly distributed throughout the duration of the extension and the average weekly benefit rate of the impacted claimants was assumed to be constant over the duration of the extension.

Given the evolving and unpredictable nature of the tariff situation, the claim numbers used to estimate costs were derived from the estimated job losses based on tariffs that were in place as of the end of May 2025.

The operating costs were estimated by Employment and Social Development Canada, 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).

The benefits and costs of the Regulations are assumed to occur over two fiscal years because, while a claimant’s benefit period is typically 52 weeks, it can be extended to up to 104 weeks in some situations. It was assumed that the number of claims that would stretch into a third fiscal year, and any impacts of such claims would be minimal and, therefore, these were not costed.

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 unemployment rate measure would end July 12, 2025, and the program would revert to regular rules with unadjusted unemployment rates. As a result, claims established between July 13 and October 11, 2025, would not benefit from adjusted unemployment rates, but could continue to benefit from the other two measures introduced by Pilot Project No. 24 (i.e. waiving the waiting period and suspending the treatment of monies paid on separation). There would be some claims that would not qualify for EI in the baseline scenario that would qualify under the regulatory scenario because of the effect of the extension of the unemployment rate measure, described below.

Under this scenario, claims established on or after July 13, 2025, would be subject to standard EI unemployment rates, which result in

• eligibility for EI regular benefits that requires between 420 and 700 hours of insurable employment;
• eligibility for EI fishing benefits that requires between $2,500 and $4,200 in earnings from fishing;
• entitlement to EI regular benefits ranging from 14 to 45 weeks; and
• weekly benefit rates that are based on best weeks of earnings (or divisor) of between 14 and 22.

Claim volumes for EI regular benefits are expected to be about 1.59 million in 2025–2026, higher than the historical average of about 1.40 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 (+118 000 claims), as well as the increased access to EI from the three measures of Pilot Project No. 24 (+72 000 claims), including the first three months of the unemployment rate measure.

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, workers accessing the EI program will continue to benefit from the measures introduced in Pilot Project No. 24, but with an upward adjustment to EI unemployment rates for an additional three months, until October 11, 2025. As in the baseline scenario, eligible claimants will continue to benefit from the other two measures (waiving the waiting period and suspending the treatment of monies on separation) which are in place until October 11, 2025.

Under this scenario, claims established between July 13 and October 11, 2025, will be subject to EI unemployment rates that are adjusted upward, resulting in

• eligibility for EI regular benefits that requires between 420 and 630 hours of insurable employment;
• eligibility for EI fishing benefits that requires between $2,500 and $3,800 in earnings from fishing;
• entitlement to EI regular benefits ranging from 17 to 45 weeks; and
• weekly benefit rates that are based on best weeks of earnings (or divisor) of between 14 and 20.

The Regulations will result in some regular benefits claimants receiving additional weeks of entitlement, and also higher weekly benefit rates for some claimants. As well, some regular and fishing benefits claimants who would not have qualified for benefits under the baseline scenario will qualify for benefits because of the reduced eligibility requirements resulting from higher unemployment rates.

It is expected there will be an increase of about 8 400 regular benefits claims in 2025–2026 over the baseline scenario.

Benefits

The primary benefit is the provision of additional EI benefits to claimants and is estimated to be $229.4 million^{footnote 6} (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 two fiscal years (2025–2026 to 2026–2027).

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 adjusts EI unemployment rates upwards

Stakeholders: Claimants residing in EI regions where the actual EI unemployment rate is lower than 13.1%. Claimants in these regions may benefit from the reduced eligibility requirements for regular and fishing benefits, increased entitlement to weeks of EI regular benefits, and higher weekly benefit rates.

The Regulations will, compared to the baseline scenario, decrease the number of hours of insurable employment needed to qualify for EI regular benefits by at least 35 hours in all regions where the EI unemployment rate is less than 13.1%. This will allow some workers to qualify for regular benefits when they would not otherwise have had enough hours. It is estimated that 8 400 additional claims will be able to qualify for regular benefits. They will use an average of 17.4 weeks of regular benefits, at an average weekly benefit rate of $395. The total undiscounted benefit is estimated to be $57.7 million.

The Regulations will also increase the duration of regular benefit entitlement by up to four weeks for claimants living in regions where the EI unemployment rate is less than 13.1%. It is estimated that 108 600 claims that would receive EI regular benefits under the baseline scenario will benefit. On average, these claims are expected to receive an additional 2.4 weeks of regular benefits, at an average weekly benefit rate of $484. The total undiscounted benefit is estimated to be $128.3 million.

Some regular and special benefits claimants may receive higher weekly benefit rates as a result of the Regulations. The number of best weeks of insurable earnings (14 to 22) used to calculate a claimant’s weekly benefit rate depends on the unemployment rate in their EI region. Under the Regulations, with the upward adjustment of the EI unemployment rate, a maximum of 20 best weeks will be used, increasing the weekly benefit rate for an estimated 242 700 regular and special benefits claimants from an average of $465 to an average of $476. These claims are expected to receive an average of 16.7 weeks of benefits. Those benefitting from higher benefit rates include approximately 68 900 claims that also benefit from additional weeks of regular benefits; the costs of those additional weeks of regular benefits are accounted for above under the extra weeks calculations. The total undiscounted benefit is estimated to be $43.4 million.

The total undiscounted benefit from the Regulations is estimated to be $229.4 million.

The number of regular benefits claims expected to benefit is based on expected claim volumes. The number of new regular benefits claims is based on claims data from fall 2021 to fall 2022, when a flat common eligibility requirement of 420 hours of insurable employment was in place in all EI regions. The average weekly benefit rate is projected from recent claimant data. The data used for this analysis comes from EI program administrative data.

Summary table of benefits

Extension of Pilot Project No. 24’s unemployment rate measure	Claims that will benefit (A)	Average additional regular benefit weeks paid (B)	Average weekly benefit rate (C)	Average increase to weekly benefit rate (D)	Average weeks of benefits paid (E)	Total Benefit (= A x B x C x D x E)
Total	290 800	-	-	-	-	$229.4M
New regular benefits claims	8 400	17.4	$395	-	-	$57.7M
Existing regular benefits claims using additional weeks of regular benefits	108 600	2.4	$484	-	-	$128.3M
Existing regular and special benefits claims receiving higher benefit rates	242 700	-	-	$10.70	16.7	$43.4M
Table 1 note(s) Table 1 note * Note that numbers in the above table may not add up due to rounding and the approximately 68 900 claims benefiting from both additional weeks of regular benefits and higher benefit rates. 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 prior to a downturn.

Some fishing benefits claimants may also receive slightly higher weekly benefit rates. Additionally, it is possible that some self-employed fishers who would not have otherwise qualified for EI fishing benefits may now qualify given lower thresholds (no more than $3,800 in fishing earnings will be required to qualify for fishing benefits, down from a maximum of $4,200 under the baseline scenario). These benefits have not been quantified due to the expected low volume of claims that will be impacted.

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 $229.4 million (undiscounted), equivalent to the total amount of additional EI benefits that will be received by claimants. These costs will occur over two fiscal years (2025–2026 to 2026–2027).^{footnote 7}

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

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

Employment and Social Development Canada will incur operating 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 $4.3 million (undiscounted) and are anticipated to occur over one fiscal year (2025–2026).

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

Stakeholders: Newly eligible EI claimants

Employment and Social Development Canada estimates that there will be an additional 8 400 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 $19.89 per hour,^{footnote 8} in an estimated opportunity cost of $0.17 million (undiscounted). This cost will occur in the first year (2025–2026).

Cost-benefit statement

• Number of years: 2 (2025–2026 to 2026–2027)
• Price year: 2025
• Present-value base year: 2025
• Discount rate: 7%

Monetized benefits (estimates)

Impacted stakeholder	Description of benefit	Base year (2025–2026)	Final year (2026–2027)	Total (present value)	Annualized value
EI Claimants	Additional EI benefits paid to claimants	$204.1M	$25.2M	$212.8M	$117.7M
All stakeholders	Total benefits	$204.1M	$25.2M	$212.8M	$117.7M

Monetized costs (estimates)

Impacted stakeholder	Description of cost	Base year (2025–2026)	Final year (2026–2027)	Total (present value)	Annualized value
EI Premium Payers	Program costs	$204.1M	$25.2M	$212.8M	$117.7M
	Operating costs	$4.3M	$0M	$4.0M	$2.2M
Newly Eligible EI Claimants	Opportunity cost to apply for EI benefits for newly eligible claimants	$0.17M	$0M	$0.16M	$0.09M
All stakeholders	Total costs	$208.6M	$25.2M	$216.9M	$120.0M

Summary of monetized benefits and costs (estimates)

Impact	Base year (2025–2026)	Final year (2026–2027)	Total (present value)	Annualized value
Total benefits	$204.1M	$25.2M	$212.8M	$117.7M
Total costs	$208.6M	$25.2M	$216.9M	$120.0M
Net cost	$4.5M	$0.0M	$4.2M	$2.3M
Table 4 note(s) Table 4 note * Note that numbers in the above tables 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 0.14 cent per $100 of insurable earnings; the employer rate would increase by 0.20 cent 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 stabilisation and economic stimulus. Claimants who will receive the additional EI benefits will 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 the employer.

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 are workers who become unemployed following the imposition of tariffs.

The population who directly benefits is expected to be gender balanced. As the Regulations are targeted to workers, those of working age (i.e. between 18 and 60), are expected to directly benefit.

Workers residing in EI regions with lower unemployment rates will benefit. These regions are found in all provinces and territories. The minimum 7.1% regional unemployment rate will most significantly benefit workers who lose their jobs in EI regions that routinely have low unemployment rates and higher eligibility requirements. Most of Canada’s labour force is concentrated in these EI regions. However, it is important to note that no one will be negatively impacted, as individuals residing in EI regions with unemployment rates above 13.0% will maintain that unemployment rate and the affiliated eligibility requirements.

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 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 Regulations. The longer the life cycle of a claim, the more claim maintenance is required.​

Compliance and enforcement

As the extension is 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