Lost Your Job? Here's What to Do Right Now.

You just got the news. Your stomach dropped. That's normal. But before you spiral, here's what you need to know: you have rights, you have options, and you don't need to make any big decisions today. The first 48 hours are about gathering information — not signing anything.

1. 1Do NOT sign anything immediately. In most cases, your employer will give you time to review the termination package — often 5 to 10 business days, sometimes more. You are under no obligation to sign on the spot.
2. 2Read your termination letter carefully. It should outline your termination date, severance offer (if any), continuation of benefits, and any conditions (like a release of claims).
3. 3Get your Record of Employment (ROE). Your employer is legally required to issue your ROE within 5 calendar days of your last day. You need this to apply for Employment Insurance. If they submit it electronically, Service Canada will receive it automatically.
4. 4File for Employment Insurance as soon as possible. You can apply online through Service Canada the day after your last day of work. Don't wait — delays in applying can cost you weeks of benefits.
5. 5Gather your documents: copies of your employment contract, any bonus or commission agreements, recent pay stubs, and your benefits booklet.
6. 6Take a breath. This is not the end. It feels enormous right now, but millions of Canadians go through job loss and come out the other side. Give yourself 24 hours to process before making financial decisions.

Most people use "severance" as a catch-all, but termination pay and severance pay are actually two different things under Canadian law. Understanding the distinction can mean thousands of dollars in your pocket.

Employment Insurance is a federal program that provides temporary income support while you look for work. If you were laid off (not fired for cause), you almost certainly qualify. Here's how it works.

Do You Qualify?

• You must have accumulated 600 to 700 insurable hours in the last 52 weeks (the exact threshold depends on the unemployment rate in your region)
• You were laid off through no fault of your own (quit or fired for cause requires different criteria)
• You are ready, willing, and able to work — meaning you're actively job searching
• You have been without work and without pay for at least 7 consecutive days

How to Apply

1. 1Go to the Service Canada website and apply online. Have your SIN, ROE, and banking details ready.
2. 2There is a mandatory 1-week unpaid waiting period before benefits begin. Think of it like a deductible.
3. 3You'll receive benefits for 14 to 45 weeks depending on the unemployment rate in your region and how many hours you worked.
4. 4You MUST complete bi-weekly reports to continue receiving benefits. These reports confirm you're actively looking for work, report any earnings, and declare your availability.

Working Part-Time While on EI

You can earn some money while collecting EI without losing your full benefit. You can earn up to 25% of your weekly benefit or $50, whichever is higher, before any deductions. After that threshold, EI is reduced dollar-for-dollar. Working part-time keeps your skills sharp and your network active — plus the extra income helps.

One of the nastiest surprises of losing your job is discovering that your health and dental benefits vanish almost immediately. Most employer group plans end on your last day of employment or at the end of that month. Unlike the U.S., Canada does not have a COBRA-style law requiring employers to extend your coverage.

What to Do Immediately

The day you lose your job, your financial priorities shift immediately. This isn't the time to maintain your pre-layoff lifestyle. Switch into emergency mode: protect the essentials, cut the rest, and stretch every dollar until income stabilizes.

Step 1: Know Your Survival Number

Add up your fixed monthly expenses — the things you absolutely must pay to keep a roof over your head and food on the table. This is your survival number. Everything above this is negotiable.

Step 2: Cut and Pause

Step 3: Contact Your Creditors

This is the step most people skip, and it's the most important. Your landlord, bank, phone company, and credit card issuer all have hardship programs. Call them before you miss a payment — not after.

• Mortgage lender: most big banks offer payment deferral for 1–3 months for financial hardship. Interest still accrues, but it buys you time.
• Credit cards: ask for a reduced interest rate or temporary minimum payment reduction. Some issuers have formal hardship programs.
• Student loans (NSLSC): you can apply for the Repayment Assistance Plan (RAP), which can reduce your payment to $0 based on income.
• Landlord: explain your situation. Many landlords prefer to work with you rather than go through the eviction process, which is costly and slow.
• Utility companies: most provinces have disconnection protections and payment plans available for hardship situations.

Severance pay feels like a windfall, but the CRA treats it as regular income — and your employer will deduct tax at source. The problem? If the severance pushes your total income into a higher bracket, you may owe additional tax when you file your return.

• Severance pay (lump sum or salary continuation) is fully taxable as employment income in the year you receive it.
• Your employer deducts income tax at source, but the rate used for lump sums is often lower than your actual marginal rate — meaning you could owe more at tax time.
• EI benefits are also taxable income. Between EI and severance, you could have a surprisingly high-income year.
• If your total income exceeds approximately $79,000 in 2026, EI benefits may be clawed back at 30% of net income above the threshold.
• You can transfer eligible retiring allowance amounts directly to your RRSP (up to $2,000 per year of service before 1996) without using your regular contribution room.

When money gets tight, your savings start looking very tempting. But not all savings are equal when it comes to withdrawals. The order in which you tap your accounts matters enormously — especially when you're collecting EI.

The Withdrawal Priority Order

1. 1Emergency fund (cash savings): This is exactly what it's for. Use it first, guilt-free.
2. 2TFSA: Withdrawals are completely tax-free and will NOT reduce your EI benefits. The contribution room comes back on January 1 of the following year, so you can rebuild once you're working again.
3. 3Non-registered investments: Taxable, but you can control the amount and time capital gains strategically.
4. 4RRSP (last resort only): Withdrawals are taxed as income at your marginal rate AND EI claws back 50 cents for every dollar of income above approximately $50/week. You also permanently lose that RRSP contribution room.

Collecting EI comes with obligations. You must actively search for work and be able to prove it. Service Canada can and does audit claimants — and if you can't demonstrate that you've been job searching, you could be cut off or required to repay benefits.

What You Need to Document

Keep a written log of every job search activity. If Service Canada requests proof, you need to show it.

Can You Refuse a Job Offer?

Yes, within reason. During the first 18 weeks of your EI claim, you can limit your search to jobs similar to your previous role at similar pay. After 18 weeks, Service Canada expects you to broaden your search. You don't have to accept a job that pays dramatically less than your previous role or requires a long commute, but you should be reasonable and document your rationale.

Upgrading Your Skills

• Second Career (Ontario): provides up to $28,000 for retraining in high-demand fields for laid-off workers. Other provinces have similar programs.
• EI-approved training: in some cases, Service Canada can authorize you to attend full-time training while continuing to collect EI benefits.
• Free online learning: many universities and platforms offer free courses — consider certifications in your field.
• Freelancing or contracting: you can do this while on EI, but you MUST report all earnings in your bi-weekly reports.
• Self-Employment Benefit program: available through some Service Canada offices, this lets you start a business while receiving EI-equivalent support for up to 42 weeks.

Canadian employment law provides significant protections for workers. Whether you're covered by federal or provincial legislation, your employer cannot simply cut you loose without meeting their legal obligations. Know your rights — too many people accept less than they're owed.

What Your Employer Must Provide

• Written notice of termination or pay in lieu of notice (the statutory minimum depends on your province and length of service)
• Your Record of Employment (ROE) within 5 calendar days
• All outstanding wages for hours worked, including your last pay period
• Accrued and unused vacation pay — this is your money, not a gift
• Any earned commissions or bonuses that are contractually owed
• Benefits continuation through the statutory notice period (even if you receive pay in lieu)

What Your Employer Cannot Do

• Fire you for discriminatory reasons (race, gender, age, disability, pregnancy, sexual orientation, etc.)
• Withhold your ROE or delay it beyond the 5-day deadline
• Deny you vacation pay that has accrued
• Prevent you from collecting EI if you were laid off (not terminated for just cause)
• Retaliate against you for filing an employment standards complaint
• Force you to sign a release on the spot without giving you time to review it

When to File a Complaint

If your employer violates your rights — refuses to pay termination pay, withholds your ROE, or denies vacation pay — file a complaint with your provincial Employment Standards branch. The process is free and you don't need a lawyer.

You made it through the worst part. You've got a new job (or steady freelance income) and the immediate crisis is over. Now comes the unglamorous but critical work: rebuilding your financial foundation so that the next unexpected event doesn't knock you down as hard.

Your First 90 Days Back at Work

1. 1Update your budget to reflect your new income. Don't immediately return to your pre-layoff spending level — use the difference to rebuild.
2. 2Rebuild your emergency fund to 3 to 6 months of expenses before increasing lifestyle spending. This is non-negotiable.
3. 3Enroll in your new employer's benefits plan immediately. Don't leave money on the table — especially employer RRSP matching.
4. 4Update all beneficiary designations: life insurance, RRSP, TFSA, workplace pension. These don't update automatically when you change jobs.
5. 5If you withdrew from your TFSA, plan to re-contribute starting January 1 of the next year when your room resets.
6. 6Review your new employment contract carefully: probation period, non-compete clauses, bonus structure, and termination provisions.

Lessons to Carry Forward