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How the 2017 Federal Budget Could Impact Employee Benefits

July 12, 2018

The Liberal government recently tabled the 2017 federal budget, which Finance Minister Bill Morneau says will put Canadians to work and make the country more innovative and globally competitive. The full budget details how the government will spend #330 billion ($1 billion of new spending) on programs, services and paying down Canada's debt.

Included in the 280-page budget are a number of changes that could have a profound impact on employers and their HR departments. In particular, the federal government plans on moving forward with the following changes:

  • ‍Extending employment insurance (EI) parental benefits
  • Creating a new 15-week benefit for caregivers
  • Implementing changes on how soon before a mother's due date EI maternity benefits can be used

18-month Parental Leave

According to the new budget, the federal government is planning on extending EI parental benefits. The proposed changes would allow parents to choose to receive EI parental benefits over an extended period of 18 months at a lower benefits rate of 33 per cent of average weekly earnings.

Under the proposal, parents will still be able to choose to receive benefits at the existing benefit rate of 55 per cent of average weekly earnings over a period o 12 months.

While the total benefits available to families will not change, employers that top up parental benefits may be impacted by this option. Going forward, some employers will need to decide how to treat top up parental leave benefits for employees who choose to extend their leave to 18 months.

The government expects the changes to be in place by the end of 2017. The new 18-month option will be available to new claimants who apply for EI parental benefits once the measure is in place. Existing claimants already receiving the benefits will not be able to switch to the extended option.

New Caregiver Benefits

The budget also details new ways the government intends on providing flexible benefits for family caregivers. As it stands, EI benefits are provided to eligible caregivers who look after a loved on who is gravely ill or at a significant risk of death. These benefits also apply to caregivers who look after critically ill or injured children.

To better support these caregivers, the federal budget allocates $691.3 million over five years (beginning in the 2017-18 fiscal year) and $161.1 million per year after to create a new EI caregiver benefit of up to 15 weeks.

The new EI caregiver benefits will cover a broad range of situations where individuals are providing care to an adult family member who requires significant support to recover from a critical illness or injury.

It should be noted that this new benefit would be in addition to the current compassionate care benefit and the program from families with critically ill children.

For employers, this new form of leave could create additional situations where employees are providing little notice before taking a leave of absence.

Changes to Maternity Benefits

The budget also proposes allowing expecting mothers to claim EI maternity benefits up to 12 weeks before their due date. Currently, these benefits can be started eight weeks before a mother's due date. This potential change does not amend the total amount of EI maternity benefits available to women (52 total weeks).

In order to implement these changes, the budget proposes to amend the Employment Insurance Act and the Canada Labour Code.

To read the budget in its entirety, click here.