Does Canada Provide New Parents With Enough Parental Leave Support?

Having a child is one of the most exciting times of someone’s life. Unfortunately, it also comes with a big price tag. Children are expensive to raise, which is why employers and the government have to help new parents during this time. Parental leave is an important part of an employer’s benefit plans and a new maternity leave policy was part of the Liberal’s campaign promise as well.

With all this focus from Canadian companies and the government on parental leave, are either doing enough to meet the financial needs of new parents?

On the campaign trail, the Liberals made a pitch of a more flexible parental leave, which included extending the 12-month leave to 18 months. While time allowed away from work increased, compensation from the government didn’t. The original plan was structured so that for the first 15 weeks, new mothers received maternity benefits, where federal EI pays 55% of your average weekly salary. This 55% remained the same for the next 25 weeks of parental leave. On the 18-month plan, federal EI drops to 33% of your average weekly salary (to a maximum of $326 per week). This is not an ideal picture for new parents already under the financial crunch of supporting a new child.

Canadian employers also provide for new parents during this transition period. An important part of a company’s benefits package is their maternity or paternity leave allowances, where companies can bridge the gap between what parents need and what the government provides. Companies with the most supportive plans often top-up their employees’ payouts up to 100% of their salary. An annual competition run by Canada’s Top 100 Employers ranks Canadian companies based on how “family-friendly” they are. Two companies that made the list are The Hospital for Sick Children (SickKids) and BASF Canada. Among other benefits, SickKids offers a top-up plan that covers 84 to 93% of their salary, while BASF Canada tops up salaries to 100% for up to 17 weeks. By choosing a company that prioritizes families, new parents can alleviate some of the financial pressures that come with a new family.

While being at a family-friendly company helps, not everyone has that luxury. Many families have to rely solely on their own savings and government support. With that in mind, how does Canada compare to other countries? The best place to be a new parent is in the Nordic countries. Norway, for example, offers new parents extensive financial benefits, including the option of receiving 100% of their salary for 49 weeks during maternity leave or 80% of their salary for 59 weeks. Norway also encourages paternity leave, with each parent required to take at least 10 weeks of paid time off.

While this may seem enviable, there are countries who haven’t quite figured it out yet. Take a look at our neighbours to the south – the United States federal government has no paid parental leave for new parents, leaving it solely up to the states and employers to provide financial support.

Becoming a new parent is a life-changing event, but brings new responsibilities and financial pressures. While the Canadian government and Canadian companies are taking steps in the right direction to support new parents, there is still a lot to be desired in terms of parental leave. By following the examples of other countries, hopefully Canada can catch up to do enough for new parents and make the transition into parenthood a smoother one.