Employment Insurance Basics in Canada

Employment Insurance Basics in Canada

By Mark Swartz


Being unemployed can lead to money difficulties. Canada’s federal government recognizes this. They offer Employment Insurance (EI) benefits – temporary financial assistance – to those who qualify.

More than half a million people receive these funds monthly. In case you need to be among them, know what’s involved. There are obligations on your part before, and after, getting approved.



EI can provide partial income replacement when you lose a job. Note that payments are treated as taxable income. Applicable federal and provincial taxes are deducted.

You can get EI for anywhere from 14 weeks up to a maximum of 45. It depends on the unemployment rate in your region and the amount of insurable hours you’ve accumulated in the last year.


Are You Eligible?

You may be entitled to (EI) regular benefits if you:

  • were employed in insurable employment and have worked the required number of hours
  • lost your job through no fault of your own (e.g. terminated without cause, or if you quit for certain acceptable reasons such as provable harassment, toxic work environment)
  • are looking for work each day and continue to document these efforts


Other conditions can affect if you qualify. EI is not one of your guaranteed rights following a Canadian job loss.



Your claim is likely to be rejected if you:

  • voluntarily left your job without just cause (e.g. you quit because you were bored)
  • were terminated for misconduct
  • are unemployed because of directly participating in a labour dispute
  • are confined to a jail or similar institution


How Much You Might Receive

For most people there’s a basic rate for calculating EI benefits. In theory it amounts to 55% of your average insurable weekly earnings. However there’s a hard cap on the maximum. At most you would receive about $540 per week.


When You Apply

To find out if you’re eligible, you must submit an application to Service Canada online. It will take about an hour to complete.

Have your Social Insurance Number (SIN) at hand. Know the names, addresses, dates of employment, and reason for separation for all your employers over the last 52 weeks. You’ll also be asked for your detailed version of the facts of why you are unemployed.


Getting Paid Faster

Always apply for EI benefits as soon as you stop working. You can register even before you receive your Record of Employment (ROE) from the employer. Delaying your claim more than four weeks after your last day of work could reduce benefits.

Also when you apply, sign up for direct deposit to get payments as quickly as possible. That way they are automatically deposited into your bank account two business days after being processed.


After Being Accepted

As a claimant of EI benefits, you have ongoing responsibilities. For instance, you must actively search for and accept offers of suitable employment. Along the way you may be asked to produce a detailed record as proof of your job search. Those notes must be held onto for six years, just in case.

You might be able to work while receiving EI regular benefits. If so you have to report your earnings and hours in the week they occurred. Other limitations may apply too.


Related Programs

In addition to regular EI payments, there are associated income programs. Benefits are available to those who qualify while sick or when having (or adopting) children. Also to people providing compassionate care for someone who is ailing, including their critically ill children.

Even the self-employed can register for EI, though they have to pay into it at the same rate as a regular employee.


A Temporary Safety Net

EI used to be called unemployment insurance. It was never meant to replace a full-time salary. Think of it instead as a bandage that helps while you’re healing the wound of joblessness.

Used when needed the money provides a buffer against misfortune. Don’t let pride prevent you from applying if you find yourself between jobs.