Why entrepreneurs struggle with parental leave

Government must look again at benefits for company founders, say women business leaders

Why entrepreneurs struggle with parental leave

Several entrepreneurs have called for the Canadian government to re-examine benefits for all company founders but especially women, who, on average, make less than men and are less likely to make it to the C-Suite.

The Canadian Press spoke to a number of female executives, including Marie Chevrier Schwartz who had paid into Canada's Employment Insurance program only to be denied the benefit when she needed it.

In 2021, the chief executive of Toronto-based brand promotions company Sampler had just given birth to her first child and, for the first time since founding her company eight years earlier, planned to take a break. But after Chevrier Schwartz applied for parental benefits, she found officials didn't seem to trust that she had stopped working. In two interviews and an audit of her application, she said they questioned why her email signature and voicemail still said she was chief executive and whether she'd truly backed away. Chevrier Schwartz said she had been too caught up with her newborn to change her messages.

Eventually, an email arrived denying her the benefits because she was at ``non-arm's length'' from the company. She decided at that point to cut her maternity leave short, taking off just one month.

``I didn't have the energy to be upset at that point, to be honest,'' said Chevrier Schwartz. ``Now my son is two years old and I've had an opportunity to take a little bit of a step back on this and think, and I'm like ... 'This is unacceptable.'''

Krystyn Harrison, founder of Toronto-based coaching business Prosper, also discovered how hard it is to get parental benefits when she was researching the process for her pregnant co-founder in 2019.

``I was thinking, 'Gosh, how am I going to continue to build this business and start a family if there are really no parental benefits for me?' I would have to fully self-fund, which as a startup and not an established company, I actually, frankly, was extremely discouraged by.''

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

``I don't think you should have to decide between building a company and scaling it, and starting a family,'' she said.

The Canadian Press article detailed how Canada's Employment Insurance (EI) program gives people up to 55 per cent of their earnings, to a maximum of $650 a week, for people who are away from work because they're pregnant, have recently given birth or are caring for their newborn or newly adopted child.

Applicants must prove their regular weekly earnings have decreased by more than 40 per cent for at least one week and they have accumulated 600 insured hours of work.

Those who are self-employed, run their own business or control more than 40 per cent of a corporation's voting shares have a separate program they can apply to for maternity and parental leave, sickness, family caregiver and compassionate care benefits.

However, this program requires applicants to register for the program at least 12 months before drawing benefits from it, have decreased the amount of time they spend on their business by more than 40 per cent and have met an income threshold to be eligible.

Erin Bury had always paid into EI and, as chief executive of Toronto-based online wills platform Willful, was eligible for benefits. But her husband, the company's founder, had never paid into EI because he didn't think he would qualify. When he took eight months off with their baby, it was with no government support.

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

She added: “Just like virtual and remote workplaces are becoming a competitive edge, having really strong parental leave policies and talking about them in job interviews and ... being supportive of people expanding their families will become a huge competitive edge in the future.''