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The Canada-U.S. trade dispute took another significant turn this morning—and, from an employment perspective, one of the most interesting parts of the federal government’s response may be the changes coming to Employment Insurance (EI).
Following the U.S. decision to impose 50% tariffs on $27.6 billion of Canadian goods, Canada announced that it will respond “dollar for dollar, rate for rate.” Beginning September 8, 2026, new Canadian counter-tariffs of 15%, 25% and 50% will apply to $27.6 billion of U.S. imports, including products in the steel, dairy, appliance, agricultural equipment, pulp and paper, and electronics sectors.
After the back-and-forth of the past several days, it is increasingly clear that this trade dispute will not be confined to the border. It will have consequences in Canadian workplaces.
Recognizing that reality, the federal government also announced a new $7.5-billion support package for Canadian workers and businesses affected by the tariffs. Of particular interest to employers and employment lawyers are the temporary changes to the EI system.
Among other things, the government will:
- extend for another year the waiver of the one-week EI waiting period;
- extend for another year the measure allowing employees to receive EI without first exhausting separation payments such as severance or vacation pay;
- extend the enhanced benefits for long-tenured workers, who may receive up to an additional 20 weeks of regular EI benefits; and
- introduce a new temporary measure addressing employees who voluntarily left a previous job. For the next year, workers who voluntarily left employment in recent months will not be penalized when seeking EI where their most recent job loss was through no fault of their own.
That last change is particularly interesting. Traditionally, voluntarily leaving employment without “just cause” can have significant consequences for EI eligibility. The government is now introducing additional flexibility at a time when workers may be changing jobs, moving between sectors or otherwise trying to navigate a much less predictable labour market.
There is an employer-side component as well. The government plans to create a new Workforce Retention and Retraining Program, combining the existing EI Work-Sharing program and Worker Retention Grant, with additional funding available for training and administrative costs.
For employers, these measures are worth watching closely. Tariffs can quickly become an employment issue when businesses face declining orders, increased input costs or uncertainty about future demand. That can mean reduced hours, temporary layoffs, restructuring, terminations or difficult decisions about whether (and how) to retain employees until conditions improve.
The expanded EI measures and retention programs will not eliminate those challenges. But they may change the options available to both employers and employees as Canadian businesses work through the consequences of an escalating trade dispute.
We will be watching closely for further details on how these measures will be implemented, particularly the new EI rules governing voluntary departures and the Workforce Retention and Retraining Program.
Read the original article on GowlingWLG.com
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