‘I didn’t have the energy to be upset’: Entrepreneurs struggle with parental leave

TORONTO – As long as she works, Marie Chevrier Schwartz has paid for Canada’s Employment Insurance program. But when she finally had to collect the benefit, she received no support.

In 2021, the CEO of Toronto-based brand promotion company Sampler had just given birth to her first child and, for the first time since founding her company eight years earlier, was planning to take a break. For months she coordinated with the board and senior management about the responsibilities other employees would take on during her three months of maternity leave.

But after Chevrier Schwartz filed for parental benefits, she found that officials didn’t seem to trust that she’d retired. In two interviews and an audit of her application, she said they wondered why her email signature and voicemail still said she was CEO and if she had really stepped down. Chevrier Schwartz said she was too preoccupied with her newborn to change her messages.

Eventually, an email arrived denying her benefits because she was at “non-arm’s length” from the company. She decided at that point to shorten her maternity leave and take only one month.

“To be honest, I didn’t have the energy to get upset at the time,” said Chevrier Schwartz. “Now my son is two years old and I’ve had a chance to step back and think, and I’m like… ‘This is unacceptable.'”

Chevrier Schwartz’s experience is not uncommon among business owners, some of whom say they have been denied access to parental benefits on similar grounds and feel Canadian policy penalizes them for staying involved in their businesses even while on leave.

They say it’s time for the Canadian government to rethink the benefits for all business founders, but especially for women, who earn less on average than men and are less likely to become entrepreneurs or make it to the C-Suite.

“It feels like another hurdle, one more thing to overcome,” says Krystyn Harrison, founder of Toronto-based coaching company Prosper, who discovered the difficulty of getting parental benefits when she researched the process for her pregnant co-worker. founder in 2019.

“I thought, ‘Gosh, how am I going to continue building this business and starting a family if there really are no parental benefits for me?’ I would have to fund it completely myself, which as a startup and not an established company I was frankly very discouraged by.

Harrison, who now has a son, sold the assets in 2020. She is now chief operating officer of a consulting firm.

“I don’t think you have to choose between starting a business and scaling it, or starting a family,” she said.

The Canadian Employment Insurance (EI) program gives people up to 55 percent of their income, up to a maximum of $650 per week, for people who are unable to work because they are pregnant, have recently given birth or are caring for a newborn or baby. newly adopted child.

Applicants must prove that their regular weekly income has decreased by more than 40 percent for at least one week and that they have accumulated 600 insured working hours.

Those who are self-employed, run their own businesses, or own more than 40 percent of a company’s voting stock have a separate program through which they can apply for maternity and parental leave, illness, family caregiver, and compassionate care.

However, that program has additional criteria. Applicants must enroll in the program at least 12 months before benefiting from it, reduce the amount of time they spend on their business by more than 40 percent, and have reached an income threshold to qualify.

Stefanie Ricchio, a Bolton, Ont. accountant, said many Canadians find the EI provisions “not self-evident”.

“It’s very complicated… I wouldn’t dare say it would ever be as simple as for someone who is an employee of a company they don’t own.”

Asked about the difficulties entrepreneurs face in accessing benefits, Mila Roy, a spokesperson for Employment and Social Development Canada, said the government’s latest budget proposes more financial support for workers in seasonal industries and improves the appeals process. .

“The government remains committed to modernizing the EI system,” she said in an email. “However, the current economic context and the near-term economic context call for caution against measures that could put pressure on EI premiums. The government should be careful about any decision that could make it harder for workers and employers to make ends meet.”

Ali de Bold is convinced that change is needed. She found out she wasn’t eligible for parental benefits a few months before the birth of her first child in 2011 when she called the government to learn what steps she needed to complete to apply.

The founder of consumer research platforms Butterly and ChickAdvisor of Kitchener, Ontario, said she was told she couldn’t collect benefits because she owned just over 40 percent of her company.

“It was a huge shock because my business was still very much in startup mode,” she said.

“I couldn’t possibly afford to pay myself my salary while I was off because I needed other people to do the work I couldn’t do, and I had to be able to afford them.”

Roy said there is no upper limit on how much of a company a person can own to collect government parental benefits.

De Bold successfully sought a ruling from the government refunding her the EI premiums she had previously paid, though it paled in comparison to what parental benefits would have been.

She cut her maternity leave down to a few months, and two years later, when she had a daughter, she took even less time.

“I regret to this day that I didn’t get precious time with my kids because I couldn’t afford it,” she said.

Erin Bury saw the intricacies of government policy when she took four months of maternity leave in 2021 after her daughter was born.

She had always paid EI and was eligible for benefits as CEO of Toronto-based online wills platform Willful. But her husband, the founder of the company, never paid EI because he thought he wouldn’t qualify. When he took eight months off with their baby, it was without government assistance.

Bury hired someone to fill in for her and trained the person well in advance, leaving advice on the circumstances that would require the replacement to contact her.

She sought advice on navigating the furlough policies of others who were pregnant at the same time as her, and while she thinks the government could do more to support parents, she said businesses need to do more, too.

“The consensus of my fellow group of entrepreneurs and friends is that most companies have woefully inadequate parental leave policies buried in the corner of an employee handbook,” said Bury.

Willful supplements parental leave at 80 percent of an employee’s pay for 12 weeks, allows stock options to vest during a furlough, and allows sick days to be used, among other things, for raising children.

“Just as virtual and remote workplaces are becoming a competitive advantage,” said Bury, “having a really strong parental leave policy and talking about it in job interviews and… supporting people who are expanding their families is going to be a huge competitive advantage going forward .”

This report from The Canadian Press was first published on June 18, 2023.

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