Canada’s parental leave policies are hurting self-employed women

Vancouver entrepreneur Sophie Warwick shares the surprising difficulties in getting answers about claiming EI.

When Sophie Warwick was preparing to start a family and called the CRA about maternity benefits, she didn’t expect to come out of the call with more questions than answers.

Warwick was hoping for clarity on how she and her business co-founder, Jillian Climie, could implement a top-up — where their company provides additional money to employees receiving employment insurance (EI) during parental leave. Instead, a rep admitted that they had no idea, before transferring the call to a colleague who said that they had never heard of 50/50 business owners having such a program, and that the possibility of accessing EI was unlikely. 

“We're a country of almost 40 million people,” said Warwick. “I'm confident that we're not the only people who are dual partners and asked about [maternity benefits], so surely there's a lot of people out there who aren't getting the coverage that they need to support something that's really important.”

The entrepreneur felt disheartened. Before making the call, she had already poured over different government websites and lengthy documents for information. Having to consolidate all the findings felt like a job. It still wasn't clear what she should be asking about, despite understanding how to navigate policies from larger organizations. Warwick has a lot of experience in the space, as, perhaps ironically, she and Climie are the founders of The Thoughtful Co. — a consultancy that advises companies on gender equity and employees with salary negotiations.

Forced to choose a different path

Having no luck despite their best efforts, the dual partners sought advice from their accountants and those in their network. They settled on a structure where they would be unpaid while on maternity leave, so that they can receive EI. 

“We never felt confident that we could follow a traditional top-up structure based on the responses we got,” shared Warwick. 

Around this time, the entrepreneur came across a LinkedIn post that highlighted how other women in leadership roles face similar challenges. A company CEO shared that she had to return to work eight weeks after giving birth, since Service Canada rejected her maternity benefits application. The government didn’t consider her an employee since she owned 40 per cent of the business. It also assumed she was still working since her voicemail listed her title and her out-of-office email response had yet to be activated.

“If you're likely going into labour, your first thought isn't, ‘I'm going to do a quick update on my voicemail to make sure people know that I'm on leave,’” said Warwick. “No one would think about that.”

Repercussions for women

Warwick said the complexities of Canada’s parental leave policies create substantial barriers for women who are business owners and expectant mothers. 

“For many women, it's already difficult to step away from your business for a lot of different reasons — especially if you're in a client-facing industry,” she said. “I fear that some women would maybe choose not to have families or to wait a long time because they need to build a team to make sure that they have the capacity to walk away. But those choices also might impact their ability to have families in the future as well, or at least in the way they might have pictured.”

Warwick hopes that Service Canada will prioritize addressing the gaps in its policies — from how information is shared to how applications are reviewed. She suggests that the government provides clarity for all business structures and ensures staff are trained not to be biased when assessing submissions. Allowing self-employed women — especially sole proprietors — to work part-time and keep more earnings is also ideal. Currently, those who do can keep 50 cents for every dollar they make, up to 90 per cent of the weekly insurable earnings used to calculate their EI benefit amount.

“Some women end up having to choose to [...] negate their access to EI and work full-time, because that's the only way they can make it work financially for their family,” said Warwick.

“The reality is that the EI coverage in Canada is still a relatively small amount — the maximum only goes up to $650 a week,” she added. “Living in a large Canadian city with a housing crisis, you have to be able to predominantly depend on a dual income to be able to cover that. So for single parents, it would be really difficult.”

Advice for the government and other women

Should the government delay in improving its policies, it could lead to more women choosing not to venture into entrepreneurship, Warwick suggests. She says she already knows many who have switched from the private to the public sector — even though it doesn’t align with their career goals — just to have access to better maternity benefits.

“I think we’re limiting women's representation in the private sector and as business owners,” she said. “By improving policies, we allow more women to participate in their careers to their full potential and in roles and industries that they really relate to and are passionate about.”

For those like Warwick looking to start a family in the future, she encourages reaching out to experts and community members for guidance, and not hesitating to ask questions. She also reminds that many government programs require signing up 12 months before eligibility — before an applicant becomes pregnant.

“Start planning early, even if this is something that you’re thinking about five years from now,” the now-expectant mother said, adding that it will help to explore all the available opportunities to structure your leave. “I think we did ours a year or so in advance but it was so nice that we didn't have to go through it while I was preparing to go on leave. I could just focus on my role and prepare to start a family.”