Laid Off by Tariffs? Your Rights in Canada
Tariff layoffs are hitting Canadian steel, auto and forestry jobs. Here is the severance, notice and EI support you are owed if you are laid off in 2026.
By Supun Bandara · September 2, 2026 · 9 min read
Why this is happening now
Washington imposed a 50% tariff on roughly $27.6 billion of Canadian goods on August 22, 2026, and Canada is matching it. Ottawa's counter-tariffs of 15%, 25% and 50% on more than 700 American products take effect on September 8, covering steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper and electronics.
The jobs exposure sits on the Canadian export side. One estimate put nearly 90,000 Canadian jobs at risk from the new American tariffs, concentrated in steel, aluminum, autos, forestry and downstream manufacturing. Ottawa responded on August 25 with a $7.5 billion support package on top of nearly $25 billion committed over the previous 18 months.
If your plant announces cuts, the most expensive mistake you can make is assuming a layoff is simply something that happens to you. In Canada it is a legal event with specific entitlements attached, and several of them are temporarily better than usual right now.
Step one: find out who regulates your job
This determines which law sets your minimum entitlements, and people get it wrong constantly.
Most Canadian workers, including nearly everyone in manufacturing, steel, forestry, retail and construction, are covered by provincial employment standards legislation. Ontario's Employment Standards Act, British Columbia's Employment Standards Act, Quebec's Act respecting labour standards, and so on.
A minority are federally regulated under the Canada Labour Code: banks, telecommunications, airlines, railways, interprovincial trucking, ports and shipping. The rules differ meaningfully, so check before you read anything else about your entitlements.
Is it a temporary layoff or a termination?
In Ontario, a layoff stays "temporary" only within statutory limits. The basic rule is no more than 13 weeks of layoff in any 20 consecutive weeks. It can run longer, up to 35 weeks in 52, only if additional conditions are met, such as the employer continuing substantial payments or maintaining your group benefits. Since November 27, 2025, certain non-union layoffs can extend beyond that to 52 weeks in a 78-week period, but only with a written agreement and approval from the Director of Employment Standards.
Two consequences follow, and both favour the employee.
If the layoff exceeds the limit, it becomes a termination, and the termination is deemed to have happened on the first day of the layoff, not the day the clock ran out. That backdating matters for calculating what you are owed.
If your employment contract does not give the employer the right to lay you off temporarily, putting you on layoff may amount to constructive dismissal from the start, which lets you treat it as a termination and claim accordingly. Timing matters here. Waiting months to object can weaken the argument, so this is the point at which a phone call to an employment lawyer earns its keep.
The two tracks of severance
Canadian severance runs on two parallel systems that stack, and most employers only volunteer the smaller one.
Track one: statutory minimums
In Ontario, two separate entitlements exist. Termination pay is one week of regular wages per completed year of service, capped at eight weeks, owed after three months of employment. Severance pay is a distinct entitlement, available only if you have five or more years of service and either your employer's annual payroll is at least $2.5 million or 50 or more employees are being terminated in a permanent shutdown within six months. It runs one week per year of service, up to 26 weeks. You can qualify for both.
Federally regulated employees get notice starting at two weeks and rising to eight weeks at eight or more years of service, plus separate statutory severance of the greater of two days' wages per completed year and five days' wages, once you have completed 12 months. There is no cap on the federal severance formula.
British Columbia and Alberta have no separate statutory severance on top of notice. Quebec requires notice scaling from one to eight weeks with tenure. Check your own province rather than assuming Ontario's rules travel.
Track two: common law reasonable notice
This is the track that actually determines what most non-unionized employees are worth, and it is usually far larger.
Courts assess reasonable notice using the Bardal factors: your age, length of service, the character of your employment, and the availability of comparable employment. There is no statutory cap, and awards in the range of 24 months are the practical ceiling for long-service senior employees. A 15-year employee capped at eight weeks under the statute might have a common law entitlement measured in months rather than weeks.
The trade war cuts directly into one of those factors. When an entire sector is shedding workers at once, comparable employment becomes genuinely harder to find, and that argues for a longer notice period rather than a shorter one.
The catch is your employment contract. A properly drafted termination clause can lawfully limit you to statutory minimums. Many clauses are not properly drafted and have been struck down by Ontario courts, which returns you to full common law entitlement. This is not something to assess by reading it yourself.
Mass terminations trigger extra obligations
If 50 or more employees at one location lose their jobs within a four-week window, additional rules apply.
Federally, the employer must give at least 16 weeks of written notice to the Labour Program's Head of Compliance and Enforcement before the first termination takes effect, with copies to the Minister, the Canada Employment Insurance Commission and any unions, and must establish a joint planning committee. That is on top of each employee's individual notice and severance.
Provincially, Ontario requires enhanced notice that scales with the number of employees affected, and the employer must file a form with the Director of Employment Standards. The notice period does not start running until that filing happens, which occasionally means employees are owed more than the employer calculated.
EI in 2026, including the tariff measures
Regular Employment Insurance pays 55% of your average weekly insurable earnings. For 2026 the maximum insurable earnings ceiling is $68,900, which puts the maximum weekly benefit at $729. Qualifying takes between 420 and 700 insurable hours in the last 52 weeks depending on your regional unemployment rate, and benefits run from 14 to 45 weeks on the same basis.
Three temporary measures introduced in March 2025 for tariff-affected workers are still in force and were extended again in the August 25, 2026 package:
The one-week waiting period is waived, so benefits start from the first week of the claim.
Separation payments no longer delay your EI. Normally severance is treated as earnings and pushes your benefits back until it is exhausted. Under this measure you can receive severance and EI at the same time. This one is worth real money and it changes how you should think about negotiating a package.
Long-tenured workers get an extra 20 weeks of regular benefits.
The August package also added a new temporary measure so that workers who voluntarily left a job in recent months are not penalised when they apply, provided their most recent job loss was not their fault. On the employer side, the EI Work-Sharing program and the Worker Retention Grant are being merged into a single Workforce Retention and Retraining Program, with up to $1,000 per participant toward training and administrative costs. If your employer is considering Work-Sharing rather than layoffs, that is usually the better outcome: you keep the job and draw partial EI.
Apply for EI as soon as you stop working. Do not wait for your Record of Employment to arrive, because delaying the application can cost you weeks of benefits.
What to do in the first week
Do not sign the release on the spot. Severance offers routinely come with a signing deadline designed to create pressure. The offer does not evaporate, and signing extinguishes your right to claim more.
Get everything in writing, including the termination letter, the offer, and your original employment contract with its termination clause.
Apply for EI immediately, and separately chase your employer for the Record of Employment.
Watch the deadlines. An Employment Standards claim in Ontario generally must be filed within two years. A federal unjust dismissal complaint must reach the Labour Program within 90 days of the dismissal. Wrongful dismissal actions have their own limitation periods.
Start looking for work and keep records of it. Common law damages are reduced by what you earn or reasonably could have earned during the notice period, so documenting a genuine job search protects your claim.
If you are unionized, call your union first. Your collective agreement governs notice, recall rights, seniority and bumping, and the grievance process replaces most of the individual claims described above.
FAQ
Will my severance reduce my EI benefits?
Not under the temporary measure currently in place for tariff-affected claims. Separation payments such as severance and vacation pay are not being treated as earnings that must be used up first, so you can collect both. The measure is temporary and has been extended more than once, so confirm the current end date on the Government of Canada site before you rely on it.
Do I have to accept the severance package I was offered?
No. A statutory minimum is a floor, not a settlement. If your contract does not validly limit you, your common law entitlement may be considerably higher, and the offer is an opening position.
Is being laid off the same as being fired?
Legally, no. A layoff within statutory limits is not a termination. Exceeding those limits, or laying you off when your contract does not permit it, converts it into a termination with full notice and severance obligations.
How much is a 15-year employee owed?
Under Ontario statute alone, up to eight weeks of termination pay plus up to 15 weeks of severance pay if the eligibility thresholds are met. Under common law the figure is assessed case by case on the Bardal factors and is frequently much larger. There is no reliable rule of thumb, which is exactly why a consultation is worth the hour.
Can I get EI if I quit before the layoff was announced?
Ordinarily quitting disqualifies you. The August 2026 package introduced a temporary one-year measure so that workers who voluntarily left jobs in recent months are not penalised, as long as their most recent job loss was through no fault of their own.
This article is general information about Canadian employment law and Employment Insurance, not legal advice. Entitlements depend on your province, your contract, and the facts of your situation, and the temporary EI measures described here have set end dates. Consult a licensed employment lawyer or your union about your own case, and confirm current EI rules with Service Canada.