EI Rules Allow Grant Top-ups for Work-Sharing

Summary#

These final rules, the Regulations Amending the Employment Insurance Regulations, update wording and technical rules so Employment Insurance (EI) Part II measures match changes made to the Employment Insurance Act in 2022. They also prevent top-up payments from the new Worker Retention Grant from being deducted dollar-for-dollar from EI Work‑Sharing benefits. The regulations came into force on February 5, 2026.

What it does#

• Updates the EI rules to remove references to old program names and to reflect the broader, outcomes-based approach introduced in the 2022 law changes.
• Clarifies that certain Part II-funded activities (helping people start businesses, become self-employed, or short-term work to gain experience) do not count as insurable employment.
• Changes the deduction rules so that allowances paid under a Part II measure like the Worker Retention Grant will not be taken off a claimant’s EI Work‑Sharing benefits on a dollar-for-dollar basis.
• Keeps in place rules that earnings from Part II activities can still be deducted from regular EI when appropriate, to avoid duplicate payments.
• Confirms that someone taking part in eligible Part II activities can still be treated as available for work (so they can keep EI Part I benefits) and can, in some cases, remain entitled to benefits while temporarily outside Canada.
• Labels payments from the Grant as insurable earnings and notes they are subject to usual payroll deductions (EI premiums, Canada Pension Plan, income tax).

Who's affected#

• Workers on EI Work‑Sharing agreements who take training while receiving EI. The government estimates about 26,250 claimants could benefit between registration and March 2027.
• Employers who use Work‑Sharing and apply for the Worker Retention Grant. The analysis estimates about 937 impacted Work‑Sharing agreements (about 277 new and 660 existing).
• The federal EI account (the Employment Insurance Operating Account or EIOA), which is expected to pay $102.7M over the grant period if uptake matches forecasts.
• Employment and Social Development Canada and Service Canada, which will handle program administration and reporting.
• Small businesses: the analysis estimates about 450 small employers will be affected and face some administrative costs for applying and reporting.

Why it matters#

• Workers can receive employer top-ups funded by the Worker Retention Grant on top of their EI Work‑Sharing benefits. That makes participating in Work‑Sharing and training more financially viable for higher‑paid and mid‑career workers who might otherwise lose too much income.
• Employers get a stronger incentive to use Work‑Sharing to avoid layoffs and to support on‑the‑job training. That can help preserve skilled staff and reduce future hiring and training costs.
• The change shifts a cost to the EI account: the government estimates $102.7M in Grant payments (plus program administration costs). Officials say this is unlikely to materially change the 2027 EI premium rate.
• Practically, the change removes a technical barrier that would have neutralized the Grant (top-ups being clawed back), so the Grant can work as intended to support workforce retention and training.
• If you are unsure whether a specific employer, training or payment qualifies under these rules, the source suggests contacting program officials; the Gazette notice provides departmental contacts.