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

Marie Chevrier Schwartz, the founder and chief executive of Toronto-based brand promotions company Sampler, is photographed in Toronto, on Thursday June 15, 2023. THE CANADIAN PRESS/Chris Young

TORONTO -

For as long as she has worked, Marie Chevrier Schwartz has paid into Canada's Employment Insurance program. Yet when she eventually needed to collect the benefit, she was denied support.

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. She spent months co-ordinating with the board of directors and senior leadership about what responsibilities other staff would assume during her three months of maternity leave.

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."'

Chevrier Schwartz's experience is not unusual among entrepreneurs, some of whom say they have been denied access to parenting benefits on similar grounds and feel Canada's policies penalize them for remaining involved in their businesses even during a leave.

They say it's time 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 be entrepreneurs or make it to the C-Suite.

"It feels like another hurdle, yet another thing to overcome," said Krystyn Harrison, founder of Toronto-based coaching business Prosper, who 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.

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, that program has additional criteria. Applicants must register for the program at least 12 months before drawing benefits from it, decrease the amount of time they spend on their business by more than 40 per cent and have met an income threshold to be eligible.

Stefanie Ricchio, a Bolton, Ont. accountant, said a lot of Canadians find the EI stipulations "not self-explanatory."

"It is very convoluted ... I wouldn't dare say that it would ever be as straightforward as it is for someone who is an employee of a company from which they have no ownership."

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 proposed more financial supports for workers in seasonal industries and improving the recourse process for appeals.

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

Ali de Bold is adamant that change is necessary. She discovered she was ineligible for parental benefits a few months before giving birth to her first child in 2011, when she called the government to learn what steps she'd need to complete to apply.

The Kitchener, Ont.-based founder of consumer research platforms Butterly and ChickAdvisor said she was told because she owned slightly more than 40 per cent of her company she couldn't collect benefits.

"It was a huge shock because my company was still very much in startup mode," she said.

"There was no way that I could afford to pay myself my salary while I was off because I needed other people to do the work that I was not going to be able to do, and I needed to be able to pay them."

Roy said there is no upper limit on how much of a company an individual may own in order to collect parental benefits from the government.

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

She shortened her maternity leave 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 to," she said.

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

She 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.

Bury hired someone to fill in for her and trained the person well in advance, leaving behind guidance about what circumstances would necessitate the replacement to reach out to her.

She sought advice on navigating leave policies from others pregnant at the same time as her, and while she thinks the government could do more to support parents, she said companies need to step up, too.

"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.

Willful offers a parental leave top-up of 80 per cent of the worker's salary for 12 weeks, allows stock options to vest during a leave and lets sick days be used for child-rearing responsibilities, among other benefits.

"Just like virtual and remote workplaces are becoming a competitive edge," said Bury, "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."

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