EI Unemployment Rate Adjustment Extended

Summary#

The final rule, Regulations Amending the Employment Insurance Regulations: SOR/2025-150, extends a temporary part of Pilot Project No. 24 that raises regional EI unemployment rates. The change keeps that upward adjustment in place until October 11, 2025 (it had been scheduled to end on July 12, 2025) and is estimated to have a net present‑value cost of $4.2M over two years.

What it does#

• Replaces the end date for the temporary upward adjustment to EI regional unemployment rates in the Employment Insurance Regulations, extending the adjustment from July 12, 2025 to October 11, 2025.
• Keeps the adjustment that raises regional unemployment rates by one percentage point, up to a maximum of 13.1%, and ensures no region is treated as below 7.1%.
• As a practical effect, for claims covered while the adjustment applies:
  • The hours of insurable work needed to qualify for regular EI can fall from up to 700 hours to as low as 630 hours.
  • The insurable‑earnings requirement for EI fishing benefits can fall from $4,200 to $3,800.
  • Some claimants can get up to four extra weeks of regular benefits and a minimum entitlement starting at 17 weeks (instead of 14 or 15).
  • The formula for weekly benefit rates may use up to 20 best weeks of earnings instead of up to 22.
• The other two temporary measures in Pilot Project No. 24 — waiving the one‑week EI waiting period and suspending the treatment of separation payments — remain in force through October 11, 2025.

Who's affected#

• Workers who become unemployed in EI regions where the adjusted unemployment rate applies — especially regions with currently low official unemployment rates. The government singled out trade‑exposed areas such as parts of Ontario, Quebec and Saskatchewan that have seen tariff‑related job risk.
• People who were close to qualifying for EI under normal rules — the extension is expected to allow about 8,400 additional regular EI claims to qualify in 2025–2026.
• EI claimants generally in affected regions may receive more weeks of benefits or slightly higher weekly payments.
• The cost of extra benefits will be paid from the EI Operating Account, so EI premium payers (employees and employers) face a small indirect impact through premium adjustments.
• Employment and Social Development Canada and Service Canada will administer the change and handle the increased claim processing.

Why it matters#

• More workers who lose jobs in the near term because of tariffs or related economic shocks will be able to access EI sooner and, in many cases, receive more weeks or higher weekly payments while they look for work.
• The government estimates additional EI payments (undiscounted) of about $229.4M, present‑value benefits of $212.8M, and present‑value costs of $216.9M, giving a net present‑value cost of $4.2M over two years.
• The change puts a small upward pressure on EI premium rates: about 0.14 cent per $100 of insurable earnings for employees and 0.20 cent per $100 for employers.
• This is a temporary, targeted tweak inside a pilot project meant to test how EI can respond to sudden economic shocks (in this case, foreign tariffs). Forecasts are uncertain, so the measure responds to evolving labour‑market risks rather than making a permanent rule.