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Redundancy Runway
Overview Checked against official sources, September 2026

Redundancy in Canada Ontario rules shown

Canada's rules depend on who regulates your employer. Most people fall under their province's employment standards; we show Ontario, the largest, alongside federal Employment Insurance and the rules for federally regulated workers such as banks, airlines and telecoms.

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At a glance

Up to 8 wks

Notice or termination pay under Ontario’s Employment Standards Act

1 wk / year

Ontario severance pay with 5+ years’ service at larger employers (max 26 weeks)

$729/wk

Maximum EI regular benefit in 2026 (55% of insurable earnings)

4 weeks

Apply for EI within 4 weeks of your last day

Deadlines that matter

  1. Within 4 weeks Apply for Employment Insurance Temporary rules apply to claims starting by 10 October 2026.
  2. Before you sign Get legal advice on any release Common-law notice may be worth much more than the ESA minimum.
  3. Within 90 days Unjust dismissal complaint (federally regulated, non-union)
  4. Within 2 years File an Ontario ESA claim for unpaid termination or severance pay

Notice or termination pay (Ontario)

After 3 months’ employment, Ontario’s Employment Standards Act (ESA) requires written notice or pay instead: 1 week under 1 year, 2 weeks for 1 to 3 years, then 1 week per year up to 8 weeks at 8+ years. Your benefits must continue through the notice period.

In a mass termination (50+ people at one establishment within 4 weeks) the minimum rises to 8, 12 or 16 weeks depending on how many are affected.

Severance pay (Ontario)

On top of notice, you get ESA severance pay if you have 5+ years’ employment and your employer’s global payroll is $2.5 million or more (or 50+ people lose their jobs within 6 months because part of the business closed). It is your weekly wage × (completed years + completed months ÷ 12), up to 26 weeks.

Common-law notice can be worth far more

ESA amounts are minimums. Unless your contract validly limits you to them, courts often award "reasonable notice" of many months. Before signing a release, get an employment lawyer’s opinion; many offer free initial consultations. You must choose between an ESA claim (2-year limit) and a wrongful-dismissal lawsuit.

Employment Insurance

EI regular benefits pay 55% of your average insurable weekly earnings, up to $729 a week (earnings above $68,900 a year don’t count), for 14 to 45 weeks depending on your insured hours and your regional unemployment rate.

  • Apply within 4 weeks of your last day, even if you haven’t got your Record of Employment yet. Applying late can cost you benefits.
  • Normally there is a one-week unpaid waiting period, and severance, pay in lieu of notice and vacation pay are allocated to the weeks after you leave, delaying EI.
  • Temporary rules until 10 October 2026: for claims starting by then, the waiting week is waived, separation payments aren’t deducted, and long-tenured workers can get up to 20 extra weeks. Check whether they have been extended.
  • EI is taxable.

Federally regulated workers

If you work in a federally regulated industry (such as banking, air transport, telecoms or interprovincial trucking), the Canada Labour Code applies: 2 weeks’ notice after 3 months, 3 weeks after 3 years, then 1 more week per year up to 8 weeks. Severance after 12 months is the greater of 2 days’ wages per year of service or 5 days’ wages.

With 12+ months’ service and no union, you can file an unjust dismissal complaint within 90 days.

Tax on severance

Severance (a "retiring allowance") has tax withheld at flat rates outside Québec: 10% up to $5,000, 20% from $5,000 to $15,000 and 30% above, applied to the whole payment. Your actual tax is settled when you file, so you may owe more or get a refund.

Nothing is withheld on amounts transferred directly to an RRSP, but the special tax-free rollover only covers service before 1996.

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This guide is general information, checked against official sources in September 2026. It isn't legal, tax or financial advice, and it can't cover every situation. If a lot of money or a deadline is at stake, talk to a qualified adviser.