Many readers will have noticed that the 2017 Federal Budget introduced some interesting proposals for new parents and parental leave. This blog post will present details of the proposal, and highlight both its advantages and disadvantages.
What is the Extended Parental Leave Proposal?
The parental leave proposal reads as follows:
“To help working parents navigate the challenges that come with a growing family, Budget 2017 proposes to make EI parental benefits more flexible. Proposed changes will allow parents to choose to receive EI parental benefits over an extended period of up to 18 months at a lower benefit rate of 33 per cent of average weekly earnings. EI parental benefits will continue to be available at the existing benefit rate of 55 per cent over a period of up to 12 months.”
This proposal does not provide any extra benefits; it simply allows parents to extend their leave period from 12 to 18 months, by stretching their EI parental benefits. Currently, parents can receive 55% of their income, up to a maximum of $543 a week, for a total of 12 months. If they want to take 18 months, the mother will receive 15 weeks of EI maternity leave benefits at 55% of her salary, and during the remaining 61 weeks, which can be taken by either parent (or a combination of both), that parent will receive 33% of their income up to a maximum of $362 a week.
Also, important to know is that EI benefits are federally provided benefits. Parents’ rights and their employer’s obligations during parental leave (as reviewed in my previous blog post New Parents, Maternity, and Parental Leave – What You Need To Know) are governed by provincial legislation, also known as the Employment Standards Act, 2000 (the “ESA”). Each province will have the choice whether or not to revise their employment standards legislation to correspond with the new extended parental leave.
Let’s start with what’s great about the proposal. The majority of daycares either do not accept children under 18 months, or they charge an inflated infant rate for them. Parents can now “choose” to take 18 months off to help with this dilemma. This would arguably benefit more women, who are often forced out of the workforce to care for their child until they have reached 18 months, as their position must be guaranteed for the full 18 months.
There are also advantages for business owners. It is arguably easier to find strong contract workers for 18 months than it is for 12 months. As long as only one parent takes the majority of the time on leave, businesses may benefit from stronger staff.
This extended leave period will hopefully encourage men to take a portion of the parental leave. There are countless articles and studies demonstrating the many advantages to fathers taking parental leave, including:
- Happier fathers: it has been shown that fathers begin to develop stronger parental instincts by spending multiple weeks on parental leave. The studies also show that fathers who take parental leave have stronger and healthier relationships with their children as they grow.
- Greater equality in the workplace: not only will women be able to return to the workforce, Swedish studies demonstrate that men who take parental leave are more likely to share the household and child-rearing duties throughout the child’s life. This inevitably reduces the future burden for women.
- Stronger partner relationship: Studies also demonstrate that a better balance in parental leave leads to greater partnership satisfaction, lower rates of divorce, and more shared parenting arrangements.
The obvious problem with the proposal is that it really only benefits a certain category of people: those in the upper-middle class who can afford to live off of $362 a week. Many parents already struggle to get by with the current parental benefit. A reduction in benefits may not be a “choice” for most families.
Budget 2017 was also the first budget to use a gendered lens on the issues. Some may apply this lens and argue that extended parental leave will only harm women’s careers, instead of advancing them. Ivona Hideg explains in her Globe and Mail article that this extended parental leave will be overwhelmingly taken by women, which will disadvantage them in two ways:
“First, the longer a mother is away from paid work, the less likely they are to advance through promotion or pay raises once they return – and more likely to be fired or downsized.
Second, the possibility female employees may choose the full 18 months will exacerbate existing prejudices and stereotypes among some employers.”
Hideg, among others, believes the obvious solution is to reserve a portion of this extended benefit to men. Currently, Sweden allocates 480 days of parental leave; however, 90 of those days must be taken by the father. As demonstrated above, the research overwhelmingly demonstrates positive outcomes when men take parental leave.
Questions that we still have
- What happens to parents who want to take 14 months’ leave? The proposal is not clear on whether parents can receive a slightly higher benefit rate if they opt to take something above 12 but less than 18 months.
- What happens to parents that change their mind? If a parent initially stated they would only take 14 months, but then changes their mind after 10 months on leave, and instead decide they want the full 18 months, what happens to them in terms of work and benefits?
- Budget 2017 states that in order to implement this change, the Employment Insurance Act must be amended. But, as mentioned above, what about the ESA? Under the current ESA, parental leave must begin no later than 52 weeks after the day the child is born or comes into the employee’s care. The ESA does not currently recognize leave taken after 52 weeks. If it is not recognized as parental leave, then the parent may not be entitled to the rights he or she would otherwise have during such a leave, including: continuous participation in his or her employer’s work benefits plan or the right to reinstatement to his or her previous position (or a comparable position). Therefore, the ESA must also be amended in order for this proposal to work.
- How will workplace policies change? Your employer may currently offer you an income top-up when you are on parental leave. If you choose to receive 33% of parental benefits, will your employer continue to provide full top-up? Employers across the country will have to revise their policies and decide how they choose to move forward with the change.
If you want to learn more about Budget 2017, take a look here.
We will continue to keep you apprised of any developments with the 2017 Budget, including any changes that could affect you, whether you are an employee or an employer.
For more information about these proposals, contact our Employment Law Group.