Canada announces new temporary insurance to secure jobs - Businessday NG (2025)

The Canadian government has introduced new temporary employment insurance (EI) measures to provide additional financial support and job security for workers.

This comes during a period of economic uncertainty on the aftermath of the trade dispute between the United States (U.S) and Canada.

Steven MacKinnon, the minister for jobs and families in Ontario, Canada made this announcement.

These changes reflects the country’s broader efforts to cushion the economic impact of the trade dispute while ensuring affected workers receive timely financial assistance.

This is an aftermath of the temporary EI work-sharing programme introduced earlier in March, designed to help businesses avoid layoffs by providing income support to employees facing reduced working hours.

“Canadian workers have always demonstrated resilience in the face of significant challenges, but the consequences of tariffs and economic instability are beyond their control,” MacKinnon stated.

“That’s why the government is taking swift action to adjust key programmes that safeguard jobs and the economy.”

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Key temporary EI measures

The first measure involves raising regional unemployment rates by one percentage point, ensuring no region falls below 7.1 percent.

This adjustment will lower the hours required to qualify for EI to a maximum of 630 hours and extend benefit payments by up to four additional weeks.

Additionally, rules regarding severance, holiday pay, and other compensation will be temporarily suspended, enabling workers to claim EI immediately rather than exhausting these payments first.

The government will also waive the usual waiting period, allowing claimants to receive EI benefits from their first week of unemployment, easing the transition to a reduced income. These measures will remain in place for six months.

How the trade dispute could affect jobs in Canada

The trade dispute between the U.S and Canada intensified in February 2024 when Donald Trump imposed a 25 percent tariff on Canadian imports, with limited exceptions.

This escalation came despite the longstanding economic and strategic alliance between the two nations, built on shared interests and geographical proximity.

Trade experts warn that the abrupt shift in U.S policy risks undermines Canada’s economic stability and could make the U.S a less dependable trading partner in the long term.

The tariffs are expected to have significant consequences for key Canadian industries, potentially leading to economic strain and job losses.

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Employment fallout

The immediate effect of the tariffs is a sharp rise in costs for Canadian goods entering the U.S which could dampen demand and hurt domestic businesses reliant on American markets.

The key sectors such as auto manufacturing, agriculture, and energy are particularly vulnerable, given their heavy dependence on cross-border trade.

Industries that export large volumes of goods to the U.S may struggle with declining sales, forcing them to reassess their operational costs.

To offset financial pressures, businesses could resort to hiring freezes, reduced working hours, or workforce reductions.

Also, some employees may have to accept short-term redundancies in the hope of being reinstated once economic conditions stabilize.