If an employee is terminated with cause #2 substandard performance will that employee be eligible for EI? Also, rules for using this code on ROE.

A dismissal for cause will, in theory, dis-entitle a claimant from receiving EI benefits, the claimant (your dismissed employee) may take the opportunity to try to convince the first-line decision-maker that he was dismissed without proper cause and therefore should be entitled to EI benefits. The EI decision-maker may contact your organization for more information before reaching a decision or may advise you of a decision to grant EI benefits and to offer you an opportunity to 'appeal' the decision. It is generally a good idea to consider this decision and process as being between your former employee and EI/Service Canada, i.e., to provide the facts/truth but otherwise stay clear of any appeals process even if you disagree with any decision made. Don't be surprised if you are asked questions by EI/Service Canada or even sent a questionnaire to complete to provide background information surrounding the termination. In all of these regards, you may wish to seek advice as this general reply is not intended as legal advice. As to the last part of your inquiry, you may wish to contact Service Canada for more information about completing the ROE but based on what you have written, Code "M" (dismissal) appears to be the appropriate choice for completing the ROE.