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What to Do When You're Laid Off in Canada: A Step-by-Step Checklist

Updated

A layoff sets several deadlines running at once. This checklist puts them in order. For EI details, see how EI works.

1. Apply for EI right away

  • Apply online the day after your last day of work, or as soon as you can. Applying more than 4 weeks after your last day can cost you benefits.
  • Don’t wait for your Record of Employment. Your employer sends it to Service Canada, usually electronically.
  • Report every 2 weeks once your claim starts.
  • Expect the first payment about 28 days after you apply, if you’re eligible.

Whether you qualify and how much you’d get are covered in how EI works and the EI calculator. Temporary measures waive the waiting week for claims that start up to October 9, 2027 and can add weeks for long-tenured workers whose claims start up to June 12, 2027; claims that start later don’t get them.

2. Check your termination pay and severance

  • Notice or pay in lieu of notice. Employment standards laws set minimums that depend on how long you worked there; your contract or the common law may give you more.
  • Severance pay is a separate statutory payment only in some jurisdictions (for example, Ontario for eligible employees and the federal Canada Labour Code), on top of notice.
  • Releases. Signing a release usually gives up your right to claim more. Get advice before you sign if the offer seems low.

See severance pay in Canada.

How it affects EI: separation money is normally allocated to the weeks after your job ends, delaying benefits. That was suspended for claims or allocations that start between March 30, 2025 and October 9, 2027.

3. Sort out your benefits

  • Ask HR when your group coverage ends; some employers continue it through the notice period.
  • Use coverage before it ends: prescriptions, dental and vision appointments.
  • Ask about conversion: whether you can convert group life or health coverage to an individual policy, and the deadline for doing it.
  • Get on a spouse’s plan if you can.

See continuing benefits after leaving a job.

4. Adjust your budget

Plan around your expected EI amount, not your old pay, even while severance is coming in. A layoff budget keeps housing, utilities, food, insurance, transportation and minimum debt payments, and pauses or trims the rest: subscriptions, memberships, eating out and phone or internet plans.

Example layoff budget (made-up figures for one household):

Monthly spendingBefore the layoffLayoff budget
Housing$1,500$1,500
Groceries$600$450
Transportation$400$200
Subscriptions and memberships$120$20
Eating out and entertainment$300$60
Everything else$300$120
Total$3,220$2,350

This household’s layoff budget is $870 a month lower than before. Comparing its total with the EI estimate from the EI calculator shows how much savings, severance or other income has to cover each month.

5. Bills and debts you can’t cover

  • Before a payment is missed: what to do when you can’t pay your bills sets out which bills to pay first, the eviction and winter disconnection rules, and the hardship options to ask your landlord, lender or utility about.
  • Credit cards and loans: information about late or unpaid credit cards and loans can stay on your credit report for up to 6 years, according to the Financial Consumer Agency of Canada (how long information stays on your credit report).
  • Government student loans: depending on your income, the Repayment Assistance Plan can reduce your payments or bring them to zero once your loans are in repayment, as long as your payments are up to date, and you reapply every 6 months (canada.ca).
  • Payday loans: in provinces that regulate them, a payday loan can cost up to $14 for each $100 borrowed, which the FCAC says is about 365% a year on a two-week loan (FCAC, payday loans). Payday loan alternatives compares cheaper ways to cover a short gap.

6. Help other than EI

  • 211: dialling 2-1-1, or using 211’s chat, text or website, connects you to community and social services near you, such as help with food and housing (211 Canada).
  • Provincial social assistance: in Ontario, “If you need financial assistance for food and housing, and are in financial need, you can apply for financial assistance through Ontario Works” (Ontario); the Ontario Works guide covers the amounts and who qualifies.
  • Other provinces and federal benefits: financial help for low-income Canadians covers the assistance programs in other provinces and the federal benefits a lower income can qualify you for.

7. Tax planning in a low-income year

  • EI is taxable, and tax is withheld from each payment.
  • An RRSP withdrawal in a low-income year is taxed at a lower rate than it would be in a normal year, but it reduces your retirement savings and can raise your net income for the EI repayment. Your RRSP issuer withholds tax on a withdrawal at a rate set by its size, applied to the whole amount: 10% up to $5,000, 20% over $5,000 to $15,000 and 30% over $15,000 (in Quebec 5%, 10% or 15% federal plus 14% Quebec); non-residents have 25% withheld unless a treaty lowers it. The withdrawal is income for the year, so the final tax can differ.
  • TFSA withdrawals aren’t taxed, and the room comes back the next January.
  • RRSP deductions can be carried forward to a year with higher income.
  • If your net income for the year ends up above $86,125 (2026), you may repay part of your regular EI; see EI repayment at tax time.

8. While you’re on EI

Report any work or earnings, stay available for work, and tell Service Canada before you travel outside Canada or start a course. See how much can I earn while on EI and EI while in school.

Sources

The figures and rules on this page come from these sources, last checked against them between September 25, 2026 and October 7, 2026. How we check facts.