The Boss of You

So as I sit here on my three month count down to my own mat leave (which will be wholly sub­si­dized by my com­pany), our fed­eral gov­ern­ment is about to finally pass some leg­is­la­tion that would bring mat leave ben­e­fits to the self employed. Bad tim­ing or me? (I’m too far down this road to be eli­gi­ble). I’m not so sure. As when I read the fine print  I’m not sure I would take it if I had the chance. The pack­age the feds have put together presents a bit of a Faus­t­ian bar­gain for the busi­ness owner. Not to get too caught up in dry/dull Cana­dian tax law here, but the ways things cur­rently work busi­ness own­ers like myself don’t pay into Employ­ment Insur­ance, and we aren’t eli­gi­ble. While it would be great to have the option to pay in (which the new Mat/Parental leave changes would offer) we’re cur­rently just liv­ing entirely out­side of the system.(To be clear, as employ­ers we do pay into EI for our staff).The new mat/parental leave leg­is­la­tion would have the self-employed, who wish to be eli­gi­ble, pay in for a year prior (which is frankly a bit of a tricky one, as I know very few peo­ple who’ve been able to time their con­cep­tion dates that well and given that it takes roughly 40, not 52 weeks, to grow a human you’re going to have to have some real foresight/magical crys­tal ball pow­ers or risk pay­ing in for more than a year or get­ting caught unaware and inel­i­gi­ble). Then comes the real devil in the details: once you’ve accepted the mat/parental leave you need to con­tinue to pay into EI for the rest of the time you are self-employed (not sure what hap­pens if you switch your busi­ness alto­gether and become self-employed under a dif­fer­ent com­pany). That means, that for the max­i­mum ben­e­fit of $447/week (tax­able income) for a total of 50 weeks (so $22,350 total before income tax), you’ll have to start pay­ing EI for a  year ahead of time and then con­tinue pay­ing it for the rest of the time that you have a busi­ness (details on this here at the gov’t site). Note that as the employer and the now eli­gi­ble “employee” I assume (but can’t at this time ver­ify) that you’ll be pay­ing both the employer and employee con­tri­bu­tions to EI (so dou­ble the cost to your busi­ness over what the typ­i­cal employed indi­vid­ual pays for this ben­e­fit). Edited to say that I have since learned that you would only need to pay the employee and not the employer por­tion of the EI.

Now, fair is fair. EI is insur­ance after all, it’s not just a pot of money that we each deposit cash into and then get to with­draw exactly what we put in, but given the many other prob­lems that the cur­rent EI set up presents for moth­ers who run busi­nesses, I’m not sure this is really an improve­ment. And here’s why:

• Flex­i­bil­ity: I’ve been doing a lot of research/talking with other moms who run their own busi­ness and many of them say that the flex­i­bil­ity that run­ning your own busi­ness affords is actu­ally great for rais­ing a child(ren). That said, it’s hard finan­cially and per­son­ally. It requires tak­ing some seri­ous down­time, and then pok­ing your head back in to make sure that your busi­ness is also still run­ning. Tak­ing a full year off is sim­ply not real­is­tic for most self-employed women or busi­ness own­ers. That means that unless they then do their reg­u­lar work unpaid, they would not be eli­gi­ble for the max­i­mum ben­e­fit any­way, as they’re like to be back at work (and there­fore earn­ing money and inel­i­gi­ble for the ben­e­fit) before the year is out, though they cer­tainly won’t be work­ing full time dur­ing that period.
• Ben­e­fit level: I don’t think I’m alone in find­ing the max­i­mum ben­e­fit that women are eli­gi­ble for for mat leave kind of insulting/out of touch/unrealistic. If you’re run­ning a small busi­ness, as I am, you are mak­ing a heck of a lot more than $22,350 a year. Or you really should be if you’re get­ting paid appro­pri­ately. The cur­rent max­i­mum I feel is totally out of touch with women’s real­i­ties in the cur­rent work­force. (NB: This crit­i­cism also applies to female employ­ees who have long been eli­gi­ble for this ben­e­fit too. If I were at a direc­tor level in a com­pany, or heck even just earn­ing a liv­ing wage here in an expen­sive city like Van­cou­ver, $22,350 before tax salary would not be a liv­able wage for a year, espe­cially when you look at adding in the expenses that a new house­hold mem­ber brings).
• Long term cost: The ongo­ing cost of the ben­e­fit to the indi­vid­ual and the busi­ness can not be over­stated. Adding in addi­tional EI pre­mi­ums as over­head for the busi­ness and for the indi­vid­ual has to be weighed very care­fully against the short term gain of what I’ve already argued isn’t a really awe­some ben­e­fit pack­age. I think the thing that busi­ness owners/self employed women really need to look at is not just the first year, but the first 5 or 6 years of their child’s life (assum­ing here that they’ll only have one child dur­ing the life of their busi­ness). Their capac­ity to work full time is almost cer­tainly going to go down over those ini­tial years as their expenses go up. Adding onto the bot­tom line cost of their busi­ness and tak­ing money out of their take home pay dur­ing what are already vul­ner­a­ble years for their busi­ness, (from what I’ve heard from many women who walked in these shoes) as they try to bal­ance moth­er­hood and busi­ness own­er­ship may not be the best longterm strategy.

So what can the fed­eral gov­ern­ment do to sup­port the grow­ing and sig­nif­i­cant body of women who are self-employed/running small busi­nesses, mak­ing up a sig­nif­i­cant per­cent­age of the Cana­dian econ­omy and at the same time try­ing to have and raise families?

For starters, they should talk to some women who’ve been there. From all the dis­cus­sions I’ve had this pack­age they’re offer­ing (though to be fair they’re just look­ing at rework­ing EI it’s not a bill aimed at help­ing women busi­ness own­ers specif­i­cally), this EI change is pretty much out of step with what this sec­tor of the econ­omy is actu­ally look­ing for.

From what I hear and from all the research I’ve done, the resound­ing answer if you asked women what one thing they really want would be: child­care. Now we had this debate — though I would argue in a rushed and sen­sa­tion­al­ist fash­ion — a few  years ago when the Con­ser­v­a­tives took power from the Lib­er­als fed­er­ally. And arguably the Lib­er­als failed us by tak­ing so damn long to roll out a decent child­care pack­age for the many years they were run­ning the show, but this topic needs to come back on the table in a very seri­ous way. From an eco­nomic per­spec­tive we need to help the many women who are mak­ing valu­able con­tri­bu­tions to Canada’s econ­omy in the busi­ness world by pro­vid­ing them with bet­ter, cheaper and more read­ily avail­able child­care for chil­dren from infants on up. And do not get me started on the whole monthly child­care ben­e­fit the Con­ser­v­a­tives intro­duced. That is not in any­way a replace­ment for/supplement for bet­ter, cheaper and more acces­si­ble child­care. (Of course this would ben­e­fit all fam­i­lies not just entre­pre­neur­ial ones, which should only strengthen the argument).

We also need to relook at the EI pro­gram as it stands for maternity/parental leave. I strongly feel that it would be a much more attrac­tive option if it offered more flex­i­bil­ity for women in terms of the period of time they could take it, or how they could struc­ture addi­tional income over that period of time, say some­thing that allowed them to make more money as a sup­ple­ment that was aver­aged over a period of 3–4 years, or per­haps just the abil­ity to take the leave in pieces over a 3–4 year period rather than all in the first year. And frankly it needs to be higher. Women (and father’s tak­ing parental leave) should be able to expect that they’ll get more of a decent income dur­ing that period of time. While I’m cer­tainly happy to live in a coun­try that offers a year long (50 week) ben­e­fit to par­ents, and know that many employ­ers do top that ben­e­fit up, I know that there is room to improve on what we are giv­ing par­ents. I hate to get all cheesy on y’all but par­ent­ing is an impor­tant part of our soci­ety, and these are peo­ple who are going to go back to work and who are on a lim­ited term for tak­ing the ben­e­fit they’re not just peo­ple look­ing for a free ride from EI (though that said, I find argu­ments against decent EI pack­ages that focus on abuse of the sys­tem totally aggravating).

So now that I’ve had my very long rant tell me, what would your gov­ern­ment be able to do for you as a par­ent and a busi­ness owner to make the whole bal­anc­ing act a lit­tle bit eas­ier? (And hold­ing the baby so you can take a shower, doesn’t count).