All about the Liberals’ EI Parental Sharing Benefit

The Trudeau Liberals took baby steps in their bid to reshape the social safety net Tuesday with a new, “use-it-or-lose-it” leave option for new parents and a modest increase in the value of a rebranded tax benefit for low-income workers.

The government’s third budget—coming on the heels of two that created an income-tested child benefit and a long-term funding commitment to child care—promised new parents the ability to share either five or eight additional weeks of leave following the birth of a child, provided they also share the job of caring for the baby.

Measures proposed Tuesday would give eligible two-parent families, including adoptive and same-sex couples, five additional weeks if they’ve opted for the traditional 12-month parental leave, or eight weeks under the new 18-month option introduced late last year.

There won’t be any boost in benefits for the extra weeks off, unlike the higher benefits provided under a similar program in Quebec. Nor will eligibility rules be changed to follow Quebec’s lead, as experts had urged the Liberals to do.

The government hopes the measures will push more non-birthing parents to take more time to care for a newborn, allowing mothers to get back into workforce sooner. The budget document notes that women accounted for 92% of parental benefits paid through EI during the 2015-2016 fiscal year, the most recent numbers available, suggesting a wide gender divide when it comes to caring for an infant.

How many non-birthing parents take the leave may be small given how the Liberals have set up the program, said Angella McEwen, an economist with the Canadian Labour Congress.

The option isn’t expected to come into effect until June 2019, just ahead of a federal election where parties will be currying political favour with middle-class families trying to foot the bill for raising children.

The budget also promises to allow new mothers and those on sick leave to keep more of their employment insurance benefits if they work just a few hours every month.

The government doesn’t expect the working-while-on-claim provisions—long a pilot project that the budget makes permanent—to change the number of Canadians working while on maternity leave. The budget document says the measure is targeted at low-income households facing a financial squeeze that requires them to work.

In an article posted by BenefitsCanada.com, Nora Spinks, chief executive officer of the Vanier Institute of the Family, says the benefit will mean that work and family is about parents and caregivers—and not just about women.

“It’s going to mean policies and programs may need to be adjusted to include the new diversity, in terms of dads on parental and paternity leave […],” she says in the article, noting that some of the messaging around benefits may need to shift. “The good news is they’ve recognized the diversity of families today, and so any employer that has a diversity and inclusion initiative, it makes it much easier for them to say, ‘We’re providing gender equity for leaves and benefits.’”

The next question for employers will be what level of top-up benefit they’re going to provide, Spinks adds. “We don’t have a good baseline of data on who’s topping up. We do know that Quebec tends to top up more because it’s much easier for an employer to top up when the replacement rate is 75 per cent and the top up is only 20 or 25, as opposed to trying to top up when it’s 40 or 45.” Read the full Benefits Canada article.

Canada Workers Benefit

The Liberals are also targeting low-income workers with a rebranded benefit—dubbed the Canada Workers Benefit—that will enrich and expand eligibility at a cost of $1 billion. For workers earning at or below the poverty line, the changes will mean an extra $170 a year to a maximum of $1,355 for unattached workers, and $2,335 for couples or single parents.

The Liberals estimate that 300,000 more workers will take advantage of the benefit, but not until the 2019 tax year, meaning the refunds won’t actually arrive until 2020.

But the measure lacks real teeth to make a serious dent in poverty rates, said economist Armine Yalnizyan, who noted that the changes may affect how much families receive in provincial and housing benefits. The tax refund will also be delivered annually—a potential problem for low-income families that often budget month-to-month.

“It definitely doesn’t lift that many people above the poverty rate,” Yalnizyan said. “You definitely can’t call it an anti-poverty measure.”

Workers are targeted in other areas of the budget: extra benefits to employees who lose out on pay, vacation and severance when an employer files for bankruptcy; a promise to review the rules around protecting pensions; $90 million over three years to speed up processing of EI claims; and an extra $127.7 million over three years to make sure Canadians with EI questions can get through to someone at a call centre.

Paying for all the new measures will mean a bump in EI premiums paid by both employers and employees. The increase will come into effect in the fiscal year beginning in April, and continue an upward trend after taking into account new measures in Tuesday’s budget.

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