GM Oshawa Layoffs 2026: Severance, EI, and Debt Relief Guide for Autoworkers

If you are one of the 1,200 GM Oshawa workers who lost your job on January 30, 2026, you can protect your severance and manage debt by combining Employment Insurance, careful budgeting, and debt relief tools like consumer proposals. General Motors Oshawa Assembly Plant conducted its last production shifts for 1,200 workers on Friday, January 30, 2026. This is the largest single-day mass layoff in Ontario’s automotive sector since the 2009 financial crisis.

The layoffs, originally announced in May 2025 as 2,000 positions, were reduced to 1,200 after intensive negotiations between Unifor Local 222 and GM Canada. The plant is not closing but is shifting from three shifts to one, eliminating the second and third shifts entirely. Root cause is tariff-driven demand collapse, with GM North American vehicle sales dropping 18 percent in the fourth quarter of 2025 due to tariff uncertainty, affordability concerns, and buyer hesitation.

What exactly happened at GM Oshawa in January 2026?

GM Canada announced in May 2025 that it would eliminate 2,000 positions at Oshawa Assembly Plant, citing structural changes in North American automotive demand. U.S. tariffs on Canadian auto parts ranging from 2.5 to 25 percent depending on component, retaliatory Canadian tariffs on U.S. steel and aluminum, and a 22 percent year-over-year decline in new vehicle sales in Canada drove the decision. Consumer demand for premium trucks and SUVs collapsed as prices increased due to tariff pass-through costs.

Between June and December 2025, Unifor Local 222 negotiated a Memorandum of Settlement that reduced layoffs from 2,000 to 1,200, secured enhanced severance for affected workers, guaranteed recall rights for three years if production increases, and protected pension and benefits for laid-off workers through June 30, 2026. The union’s intervention saved 800 jobs and improved financial outcomes for those laid off.

On January 30, 2026, the final production shifts occurred. Workers received final paycheques including vacation pay within seven days, will receive severance lump sums within 30 to 45 days, maintain medical and dental benefits through June 30, 2026, and are eligible for Employment Insurance immediately. GM Oshawa will continue operating one shift with approximately 1,800 remaining workers producing Chevrolet Silverado HD heavy-duty pickups, GMC Sierra HD heavy-duty pickups, and Cadillac Escalade luxury SUVs.

Long-term uncertainty remains. If tariffs escalate or demand remains weak, further cuts are possible. Unifor has warned that a second round of layoffs could occur in the fourth quarter of 2026. For broader context on how these layoffs fit into Canada’s 2026 economic crisis, including federal workforce cuts and mortgage renewal stress, see the triple-threat analysis.

How much severance will GM Oshawa workers receive and when?

GM Oshawa workers are covered by the Unifor Local 222 Master Agreement and the negotiated Memorandum of Settlement. Severance is calculated based on years of service, job classification including production, skilled trades, and supervision, and enhanced layoff provisions negotiated in 2025.

These are estimates. Your exact severance is detailed in your termination letter. Check with your Unifor Local 222 representative if your amount differs significantly from these ranges.

Severance is being paid 30 to 45 days after the last day of work, meaning late February to mid-March 2026 for most workers. Payment is made via direct deposit to your bank account, the same account used for regular paycheques. Severance is taxable income, and GM will withhold taxes before payment, typically 25 to 30 percent depending on the amount. You will receive a T4A slip in early 2027 for tax filing purposes.

If you carry unsecured debt and creditors have already obtained court judgments against you, your severance is vulnerable to garnishment. In Ontario, creditors can seize up to 20 percent of wages and severance. Filing a consumer proposal before your severance is paid protects the full amount because the legal stay of proceedings stops all collection actions immediately upon filing.

All 1,200 laid-off workers retain three-year recall priority. If GM Oshawa increases production due to improved market conditions or resolution of tariff disputes, you will be called back before the company hires new workers. Recall rights are a valuable protection, but counting on recall in the current economic climate is risky.

How will EI and other income work after the layoff?

Layoffs due to lack of work qualify as loss of employment without just cause, making you eligible for Employment Insurance. You will receive approximately 55 percent of your average insurable earnings, up to a maximum of 668 dollars per week. The duration of EI benefits ranges from 36 to 45 weeks depending on your hours worked in the past year and regional unemployment rates in the Durham region.

You must apply for EI within four weeks of your last day of work to avoid losing benefits. Apply online through Service Canada even if you have not yet received your Record of Employment from GM. Your ROE will be submitted electronically by your employer, and Service Canada will process your application once it is received. Delayed applications result in lost benefits for the weeks you miss.

EI benefits begin after a one-week waiting period. Your first payment will arrive approximately four weeks after your application is submitted, assuming all documentation is complete. If you have severance pay, EI may be delayed or reduced depending on how Service Canada allocates your severance across weeks. This allocation does not reduce your total EI entitlement but may delay when payments start.

If you file a consumer proposal or bankruptcy, EI is treated as income for the purposes of calculating your monthly payment or surplus income. EI benefits are protected from garnishment by private creditors under federal law, but the Canada Revenue Agency can garnish EI for tax debts, child support arrears, or spousal support arrears. Most laid-off GM workers will have little or no surplus income in bankruptcy because EI benefits are typically much lower than regular employment income.

If you filed a consumer proposal while employed and are now receiving EI, your monthly payment may become unaffordable. You can request an amendment to reduce your payment amount based on your reduced income, or you can utilize the three missed payments provision before your proposal is annulled. Most Licensed Insolvency Trustees work with clients who experience job loss to restructure payments temporarily until new employment is secured.

How can I protect my severance and wages from garnishment?

Wage garnishment requires a court judgment, which creditors obtain by suing you for unpaid debt. The process typically takes three to six months from the lawsuit filing to a garnishment order. If you missed credit card or loan payments starting in late 2025, garnishment orders could be issued in early to mid-2026, potentially before you secure new employment. Watch for warning signs you may need a consumer proposal before debt spirals further.

Garnishment applies to termination and severance pay, which are treated as wages under Ontario’s Wages Act. If a garnishment order exists when you receive your severance in late February or early March, creditors can seize up to 20 percent of that lump sum immediately. For a worker receiving 25,000 dollars in severance, this means 5,000 dollars could be seized, leaving you with only 20,000 dollars.

Employment Insurance is protected from garnishment by private creditors, but CRA can garnish EI for tax debts or support arrears. If you owe only credit cards, lines of credit, or personal loans, your EI cannot be garnished. However, if you owe CRA for unpaid taxes or have child support or spousal support arrears, CRA can intercept your EI benefits.

Consumer proposals and bankruptcy under the Bankruptcy and Insolvency Act trigger an immediate stay of proceedings that stops all collection activity, including wage garnishment and bank account freezes. Filing typically takes 7 to 14 days from your initial consultation with a Licensed Insolvency Trustee to electronic submission with the Office of the Superintendent of Bankruptcy. The stay activates the same day your proposal or bankruptcy is filed.

If you file before your severance is paid, the stay protects the full amount from garnishment. If you wait until after severance is received, creditors with existing judgments may have already seized a portion of your severance, and that money cannot be recovered. Strategic timing is critical. For detailed guidance on stopping garnishment, see how to stop wage garnishment in Canada.

Ontario workers have stronger wage protection than workers in other provinces. Alberta, for example, allows garnishment of up to 50 percent of wages, meaning an Alberta autoworker with similar debt would lose twice as much of their severance compared to an Ontario worker. Use the wage garnishment calculator to check your provincial exposure.

Is a consumer proposal or bankruptcy better after an auto-sector layoff?

Consumer proposals are usually the better option if you want to keep your car, home, or other assets and can afford fixed monthly payments. Proposals reduce unsecured debt by 60 to 80 percent and allow up to 60 months to repay the reduced amount. You keep all assets, including vehicles, home equity, RRSPs, and tax refunds. Monthly payments are fixed and do not increase if your income rises during the proposal period.

Bankruptcy is better if your income is very low and you have few assets. In bankruptcy, you may be required to surrender non-exempt assets such as RRSP contributions from the past 12 months, tax refunds, and vehicles with equity above the provincial exemption amount. However, if you are unemployed or earning only EI, your surplus income may be zero or very low, making bankruptcy cheaper in total cost compared to a proposal.

Filing before severance is paid gives you the best protection regardless of which option you choose. If you file a consumer proposal while still employed at GM, your payment will be calculated based on your regular salary. This typically results in higher monthly payments but a shorter repayment period, often 36 to 48 months instead of 60 months. Higher payments while employed also make your proposal more attractive to creditors, increasing the likelihood of acceptance.

Filing after you are laid off and receiving EI results in lower monthly payments based on your reduced income. However, if you wait until after severance is paid, that money may be exposed to garnishment if creditors already have judgments. The trade-off is lower payments over a longer period versus higher payments with full severance protection.

Both consumer proposals and bankruptcy are compatible with Employment Insurance. EI is treated as income for payment calculations, but most laid-off workers find that their EI-based payments are manageable. If you filed a proposal before your layoff and payments become unaffordable during unemployment, you can request an amendment or use the three missed payments buffer to avoid annulment.

For most GM Oshawa workers with moderate to high unsecured debt, a consumer proposal filed before severance is paid offers the best combination of debt reduction, asset protection, and affordability. Learn more about consumer proposal costs in Canada and use the consumer proposal calculator to model payments at your current income versus EI income.

What should GM Oshawa workers do in the first 72 hours and next 90 days?

In the first 72 hours after your layoff, apply for Employment Insurance online through Service Canada. Do not wait for your Record of Employment. Your application will be processed once GM submits your ROE electronically. Applying within the first week ensures you receive benefits as early as possible.

Gather all financial documents including your three most recent pay stubs, 2024 tax return and Notice of Assessment, and account statements for all credit cards, lines of credit, and personal loans. Calculate your total unsecured debt and list every creditor with account numbers, balances, and minimum payments. This documentation will be required if you decide to file a consumer proposal or bankruptcy.

Book a free consultation with a Licensed Insolvency Trustee in Oshawa within the first two weeks. Most trustees offer video consultations and can assess your situation in 30 to 60 minutes. Ask specifically about filing before your severance is paid and how much debt could be eliminated through a proposal. Bring your financial documentation to this meeting.

If you decide to file a consumer proposal, complete the process before your severance arrives in late February or early March. Filing takes 7 to 14 days from consultation to submission. The stay of proceedings activates immediately, protecting your severance from garnishment and stopping all collection calls and lawsuits.

In the first 30 days after your layoff, allocate your severance strategically if you choose not to file a consumer proposal. Set aside 50 percent for an emergency fund covering three to six months of essential expenses, 25 percent for debt reduction if you are not filing a proposal, and 25 percent for retraining or job search expenses. Keep severance in a separate bank account to avoid spending it on day-to-day expenses.

Between 60 and 90 days post-layoff, focus on finding new employment and managing your consumer proposal payments if you filed. Network with former colleagues, apply to automotive suppliers in the region, and consider retraining programs offered through federal displaced worker programs. Many automotive workers transition to skilled trades, construction, or logistics roles after layoffs.

If you have a mortgage, contact your lender within the first 30 days to discuss payment deferral options. Many lenders offer three to six months of deferred payments for borrowers experiencing job loss, though interest continues to accrue. This can provide breathing room while you navigate unemployment.

For local support, including Licensed Insolvency Trustees, legal aid, employment counseling, and retraining programs, consult Oshawa debt relief resources tailored to autoworkers and manufacturing employees.

Bottom Line

On January 30, 2026, GM Oshawa laid off 1,200 workers in the largest auto-sector job loss since 2009. If you are affected, your severance ranging from 7,500 to 45,000 dollars and Employment Insurance benefits can be protected with the right timing and debt relief tools. Filing a consumer proposal before your severance is paid protects that money from garnishment and can reduce unsecured debt by 60 to 80 percent.

Ontario’s wage protection limits garnishment to 20 percent of severance, but that still means losing thousands of dollars if creditors already have court judgments. Filing a consumer proposal or bankruptcy triggers a legal stay that stops all garnishment immediately. Both options are compatible with Employment Insurance income, and most laid-off workers qualify for significantly reduced payments based on their lower income.

All 1,200 workers retain three-year recall rights, but counting on recall in the current tariff environment is risky. Protecting your severance and eliminating debt now gives you the financial flexibility to survive unemployment and transition to new work. Find a Licensed Insolvency Trustee in Oshawa and use the consumer proposal calculator to see what your payments could look like.

This article provides general information and should not be considered legal or financial advice. Severance amounts and debt relief options vary by individual circumstances. Consult Unifor Local 222 for collective agreement interpretation and find a Licensed Insolvency Trustee for personalized debt advice.

Last updated: February 2, 2026