Maternity and parental leave benefits: Ottawa’s proposed reforms will not work for low-income families

March 15th, 2017
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Montreal – As the federal government considers extending maternity and parental leave benefits from the current 50 weeks to 18 months, a new study from the Institute for Research on Public Policy says that without additional reforms to ensure more equitable access to longer leave, the proposed changes will not benefit low-income families.

Although the current EI maternity and parental benefits system appears to meet the needs of many families, there are in fact significant gaps, especially for low-income families and parents in part-time work, contract work or self-employment, says author Jennifer Robson (assistant professor at Carleton University). In this study, she uses public microdata from the Employment Insurance Coverage Survey to compare the effectiveness of the federal parental leave and benefit system with that of Quebec’s system.

Robson points to the need to review EI eligibility rules: “Quebec’s system does a far better job of covering parents, while the federal system excludes more than 1 in 5 new moms who worked before adopting or giving birth. Nonstandard employment is here to stay, and unless rules are updated, we may see fewer parents covered for parental benefits.”

She supports the government’s proposed reforms, and says there are good reasons to let parents spread their current EI benefits over 18 months instead of 1 year. It could give families more flexibility and reduce the cost of child care, which drops significantly after a child’s 18th month. She notes, however, that the offer of either 50 weeks of nonconsecutive benefits or continuous benefits at a lower rate keeps longer leave out of reach for many families.

To support families that most need help, the author argues that the reform package must also include the following measures:

  • A more responsive and inclusive eligibility test, so that more parents who work and pay EI premiums can collect benefits
  • Targeted income support for low- and modest-income families, through the Family Supplement
  • Better coordination of EI parental leave benefits and income-tested child benefits
  • Improved incentives for employers who top up leave benefits for their employees to increase coverage for lower-wage workers

Over the longer term, she concludes, it is worth asking whether parental benefits should remain within the current EI system: “Some of the planned changes may make the current system work better in the short-term, but this shouldn’t be a substitute for a broader and more ambitious review of the current policy mix with a goal of better responding to the needs of working families.”

Parental Benefits in Canada: Which Way Forward?, by Jennifer Robson, can be downloaded from the Institute’s website (irpp.org).

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The Institute for Research on Public Policy is an independent, national, bilingual, not-for-profit organization based in Montreal. To receive updates from the IRPP, please subscribe to our e-mail list.

Media contact:    Shirley Cardenas    tel. 514-594-6877    scardenas@nullirpp.org