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Changes to Employment Insurance for the Self-Employed

November 24, 2009 • Entrepreneurship, Taxation

As a self-employed individual, your contribution to Canada's economy is important. Everybody wins when you choose to enjoy the benefits of creative freedom, the challenge and the self-satisfaction that often comes with self-employment.

It has no doubt crossed your mind that the lack of financial security can make self-employment less appealing. To encourage self-employment, the Government of Canada hopes to tackle at least some deterrents by introducing the Fairness for the Self-Employed Act.

Through the proposed legislation (the Act), you, as a self-employed Canadian, could choose to participate in the employment insurance (EI) program and become eligible for the same special benefits currently available to salaried employees. This includes:

  • Maternity benefits (15 weeks maximum), which are available to birth mothers and cover the period surrounding birth (a claim can start up to 8 weeks before the expected birth date);
  • Parental/adoptive benefits (35 weeks maximum), which are available to biological or adoptive parents while they are caring for a newborn or newly adopted child, and may be taken by either parent or shared between them (if parents choose to share these benefits, only one waiting period must be served);
  • Sickness benefits (15 weeks maximum), which may be paid to a person who is unable to work because of sickness, injury or quarantine; and
  • Compassionate care benefits (6 weeks maximum), which may be paid to persons who need to be away from work temporarily to provide care or support to a family member who is gravely ill with a significant risk of death.

Quebec Residents

If you are self-employed and you live in Quebec, you would continue to be eligible for maternity and parental benefits through the Quebec Parental Insurance Program for the Self-Employed Worker. In addition, you would become eligible to take advantage of the sickness and compassionate care benefits through the Government of Canada's employment insurance. If you chose to take advantage of the program, you would pay EI premiums at the same rates as employees in Quebec, where rates have already been lowered to take into account the provincial maternity and parental benefit plan.

Find out more

Comments

I am currently on EI and in the process of setting up my own consulting business. I need a small amount of financial support for a laptop and business cards only. Where would be the best place to apply for this type of funding?

thank you

Lori

By Lori on December 1, 2009

I am currently in the process of starting my own garage for transports and for now all I’m looking for is a little money for business cards, flyers and fuel moneys to get travel for appointments, such as UI because I will be looking to hire 4 apprentices.

By arthur on December 6, 2009

I’m currently working as a part time worker at a clerical department I’ve been working their for 11 years and my pay is very low and I don’t think I have a good future in that company. I would like to go to school for ECE program so that i can open up my own day care business and also help some low income family who cannot afford to put their kids to day care but I don’t have the money to pay for the course i want to take please help me get some loans so i could start my own business.

By Raquel on December 8, 2009

I have my business for research data collection. I need some counselor to find the good partner.

By Ibrahima on December 8, 2009

I am trying to get funding to bring in the equipment for residential projects to save people on a fixed income low income and industrial areas to help cut down heating cooling costs. Less heating cooling means less energy used.

By scott on December 10, 2009

I’m married to a Farmer who pays me a annual wage. I also work @ a High School, which lays me off every summer. My co-workers all collect EI. I’ve never applied because of my envolvement with the farm. I do pay EI premiums on all earnings, do the recent changes effect me? Will I be able to collect on my school earnings for the summer months?

By Lita on December 13, 2009

@Lori
@arthur
@Raquel
@scott

If you are looking for financing to start a business or for your existing business, we recommend you use the “Government grants, loans and financing” search tool that is found on our site:
http://www.canadabusiness.ca/eng/82/

If you need more assistance, contact our centres at 1-888-576-4444.

@Ibrahima

One good source of information to find a business partner is the Canadian Company Capabilities:
http://www.ic.gc.ca/eic/site/ccc-rec.nsf/eng/home

If you need more assistance, contact our centres at 1-888-576-4444.

@Lita

Service Canada handles the “employee-side” of the Employment Insurance program.

You will find more information about EI here:
http://www.servicecanada.gc.ca/eng/ei/menu/eihome.shtml

By Canada Business on December 14, 2009

I am currently on EI and in the process of setting up my own e-business.  I will need an extention on my EI benefits to pursue all directions in completing this business model. Who would I speak to for EI extension?

thank you

Larry

By Larry on August 2, 2010

I was a grocery store owner. I sold the store.May I have EI benefit based on the new rules on EI program?

By Ricky on August 12, 2010

Hi Larry,

Service Canada will be able to respond to any questions you may have on extension of your EI benefits. They can be contacted toll-free at: 1-800-206-7218 or TTY: 1-800-529-3742. You can also visit their website at http://www.servicecanada.gc.ca/eng/sc/ei/index.shtml

Good luck in setting up your e-business.

By Canada Business on August 19, 2010

Hi Ricky,

Service Canada is able to respond to any questions you may have on the new rules for the EI program. They can be contacted toll-free at: 1‑800‑206‑7218 or TTY: 1‑800‑529‑3742 or you can also visit their website (http://www.servicecanada.gc.ca/eng/sc/ei/index.shtml)

By Canada Business on August 24, 2010

Hi,

My wife is on Maternity leave and collects EI. She’s got some opportunity to work part-time and she knows the rules for EI deduction when she earns part-time work money. The question is should she consider herself as Self-Employed to Service Canada though she didn’t register a business? if not, what would be the option to tell Service Canada on this case?

Thanks,
Reza

By Reza on October 7, 2010

Hi Reza,

For the purposes of the EI Measure for Self-Employed People, a self-employed person is someone who:

• operates his or her own business; or
• is employed by a corporation but is not eligible to participate in the EI program as an employee because he or she controls more than 40 percent of the voting shares of that corporation.

You can find out more about eligibility and other information regarding Employment Insurance Benefits for Self-Employed People on the Service Canada website.

Also, you may want to speak with a Service Canada agent by calling 1-800-206-7218 to discuss what is best given your particular situation. We hope this information helps.

By Canada Business on October 7, 2010

Part 1:
I am currently on EI and I have the opportunity to do a 6 month contract, something I never did before.  Is it possible for me to pay into the EI program so when the contract is finished and I don’t have anything else then can I collect.

Part 2:
My current claim runs until Sep 2011 and if this contract only runs 6 months then can I still reactivate it since it is not finished?

By David on November 3, 2010

Hi David,

Service Canada is able to respond to any questions you have about EI benefits and your specific situation. They can be contacted toll-free at 1-800-206-7218 or TTY: 1-800-529-3742.

By Canada Business on November 5, 2010

im self employed and work has really slowed down right now and need help to get through a couple of months till work picks up again
how would i be able to get some help from EI
thx mike

By mike on November 13, 2010

Hi Mike,

Service Canada can help you with any questions you have about EI benefits. They can be contacted toll-free at 1-800-206-7218 or TTY: 1-800-529-3742.

By Canada Business on November 15, 2010

I am wanting to start a Hair home based business (if I meet the zoning requirements), and my current employment is a term position, which ends May 2011.  Once I am finshed my term employment, how do I go about applying for EI while trying to start a business.  I beleive there is a program that will assist up to a year, but the requirements, I have not been on EI for some time, more than 5 years.  Looking forward to your reply, and thank you for your time.

By Vanessa on December 22, 2010

I have owned my own bussing co.  I transport children to school.  I have also worked partime besides.  I have always paid into EI, but of coarse being self employeed not able to recieve EI.  I was told that I could get my EI deductions back for the last 7 yrs.  If so, how do I go about it. Thank you.

By Elda on January 11, 2011

Hello Elda,

Service Canada is able to respond to your specific question regarding EI benefits. You can use their toll-free telephone information service at 1-800-206-7218 (TTY 1-800-529-3742) or visit their Contact Information for Employment Insurance page for mail or in person service information.

By Canada Business on January 11, 2011

Hello,

I have been an employee since 2005, but always maintained a part time hobby business on the side, which I have not made any money at, any profits have been turned back into the business. I manufacture a product and primarily export it to the United States.

My current employer laid me off due to lack of work, I’ve applied for EI.

I’m just wondering if there is any programs to help me turn my little business into full time employment, or am I obligated to go back to my job when things pick up?  This is a temporary layoff.

Thanks so much,
Robert

By Robert on February 18, 2011

I have been a self-employed Massage Therapist for twenty years, I am interested in going back to school to learn a skilled trade.  Will I be able to receive EI while in training?

Cee

By Cee on February 21, 2011

Hello Robert,

Congratulations on your current success! Many successful businesses start out as a hobby or side project. There are a number of ways to grow a business; growth could be one way to turn it into a full-time business. To find out more, have a look at our section Ways to grow your business.

You may also be interested in our Grants and Finances section where you can view or search for financing programs offered by governments. You can fine-tune your search by selecting parameters such as your industry, your location, your demographic group and/or the reason you are looking for financing. The section also links to sources of community-based and private sector financing.

Regarding your obligations as a recipient of employment insurance, Service Canada, is best able to respond to your specific questions regarding employment status and whether you have to return to your job or not. You can use their toll-free telephone information service at 1-800-206-7218 (TTY 1-800-529-3742) or visit their Contact Information for Employment Insurance page for mail or in person service information.

For more information on running a business in Canada, you may want to contact the business service centre in your province or territory or call toll free 1-888-576-4444 (TTY 1-800-457-8466).

Good luck.

By Canada Business on February 21, 2011

Hello Cee,

Service Canada is able to respond to your specific question regarding EI benefits. You can use their toll-free telephone information service at 1-800-206-7218 (TTY 1-800-529-3742) or visit their Contact Information for Employment Insurance page for mail or in person service information.

By Canada Business on February 21, 2011

If I open a home based Hair Salon (if I meet all requirements, zoning etc)  am I still eligible to participate in the EI benefits for maternity and parental leave if I will not be working/earning an income in the time period after I have my baby?

By Katie on September 9, 2011

Hello Katie,

Service Canada is able to respond to your specific question regarding EI benefits. You can use their toll-free telephone information service at 1-800-206-7218 (TTY 1-800-529-3742) or visit their Contact Information for Employment Insurance page for mail or in person service information.

By Canada Business on September 12, 2011

Hi,

While I was on EI, I purchased a small business.  For the first two months I was volunteering at my own business, I was being trained by the previous owner. I was also collecting EI.  I did not receive any income from my business.  After the two months I decided the business wasn’t going to work for me, so I sold it again. Therefore, I never actually received any INCOME from this business.  Is this within EI regulations?  Or will I have to pay back the benefits received from EI during these two months of volunteering at my own business??  Please let me know as soon as possible.
thank you for your help:)

Jason

By jason on September 27, 2011

Hi Jason,
Service Canada is able to respond to your specific question regarding EI benefits while owning a business, yet not collecting income. You can use the toll-free telephone information service at 1-800-206-7218 (TTY 1-800-529-3742) or visit the Contact Information for Employment Insurance page for mail or in person service information.
We wish you all the best.

By Canada Business on September 27, 2011

My wife self employed owning daycare. I work part-time in her day care to pick and drop children. Can I get wages from my wife and can I contribute towards ei in bc. It is an incorporation organisation

By Sukh on November 1, 2011

Hello Sukh,

For information on wages and payroll, visit the Canada Revenue Agency’s page Employer responsibilities - The payroll steps. If you have further questions about wages, you can contact the Canada Revenue Agency directly.

Service Canada is able to respond to your specific question regarding EI benefits. You can use their toll-free telephone information service at 1-800-206-7218 (TTY 1-800-529-3742) or visit their Contact Information for Employment Insurance page for mail or in person service information.

By Canada Business on November 3, 2011

Hello

I have a full time job but I have skills in doing African hair. I have done it for friends in the past and now I meet people who are willing to compensate me financially (although less than what hair stylist make). I intend to declare these as income when filing my personal taxes at the end of the year. However I want to know do I need to create a business for this even though I only do it occassionally whenever I have a client and it is not my primary source of income.

How do I proceed?

Thanks

By Valerie on November 8, 2011

I am just laid off from my job and have started EI benefits I am very interested in starting up my own business are there programs to help with funding, also i need help writing a business plan can you advise on who can help me with the business plan.

Thank you

By Kevin on November 9, 2011

Hi Valerie,

Our Registering your business page can help you learn more about the requirements to register your business with different levels of government.

The Canada Revenue Agency’s What is a business? page can help you understand how businesses are defined.

Our Guide to charging and collecting sales tax will give you information on how and when to charge sales taxes to your customers.

To get more information about your obligations, you can contact the Canada Business service centre in your province or territory or call toll free 1-888-576-4444 (TTY 1-800-457-8466).

By Canada Business on November 10, 2011

Hi Kevin,

Our Starting a Business section has information that will help you plan for a successful start to your journey as an entrepreneur.

When starting a business, keep in mind that one of the best courses of action you can take is to develop a great business plan. This helps set the foundation for all of your business decisions moving forward. The Business Planning section is a good place for you to start mapping out your plan.

There are a number of resources you can look into for financing. Our Grants and Finances section is an excellent place to start your search. Within this section, you can view or search for financing programs offered by governments by selecting parameters such as your industry, your location, your demographic group and/or the reason you are looking for financing.

You may also want to contact the Canada Business service centre in your province or territory or call toll free 1-888-576-4444 (TTY 1-800-457-8466).

Good luck with your business!

By Canada Business on November 10, 2011

Hi,
I am currently in school for my Journeymen in instrumentation (Last Year) and am currently on EI with the special apprentice “code” for the time being.  I have the opportunity to Start my own business with the company I “was” working for and will be going back to work for them once my last period of school is completed successfully.  I was hoping to get the ball rolling, so to speak, with registering my company while in school, so that as soon as I am finished school, I can have everything ready to go and go to work as an incorporated company.  The Only problem I’m facing, is that if I start a “business” while collecting EI from my last job as an employee, will that mean I stop receiving benefits I’m currently entitled to ?  because I do need them to finish my last term of technical training.  Or will they continue as normal as long as the company has made ZERO income and is essentially dormant until I go back to work as per my expected start date on my EI claim ?

By Jordan on November 15, 2011

Hi Jordan,

Canada Business can provide you with information on business start-up, however, Service Canada will determine whether you may continue to receive EI benefits during the start-up stage of your business. Service Canada can be reached toll-free at 1-800-206-7218 (TTY 1-800-529-3742) or by visiting their Contact Information for Employment Insurance page.

Before registering your business, you may wish to access our Business Start-up Checklist to help you navigate through the start-up phase of your business.

Please note that registering and incorporating a business are slightly different activities, you can find out more from our section on Registering your business.

You may also want to contact the Canada Business service centre in your province or territory or call toll free 1-888-576-4444 (TTY 1-800-457-8466).

Best of luck with your future endeavours!

By Canada Business on November 15, 2011

I have been self employed for 3 years now with my own business as a sole proprietor. The past year has been very slow, and I am financially hardshipped.

Do I qualify for EI benefits through Service Canada, and if I do?....what is the criteria?

Regards

James

By James on January 2, 2012

Hello James,

Service Canada provides the eligibility criteria for EI benefits for self-employed. You can visit their website at http://www.servicecanada.gc.ca/eng/sc/ei/sew/eligibility.shtml or dial 1-800-206-7218 (TTY 1-800-529-3742). You can also contact Service Canada by mail or in person.

By Canada Business on January 5, 2012

I am currently on EI (mat leave) I work part time at my job! And I’m looking into selling epicure (very small based business something like avon, just diff products) is that considered self employed, if so how to do I go about reporting this? Thanks

By Kim on January 31, 2012

Hi Kim,
Service Canada’s website has information on the definition of self-employed and income earned while on maternity leave.

Our Taxes section can help you learn about the basics of filing your federal and provincial tax returns. You may also be interested in attending one of the Canadian Revenue Agency’s free tax seminars where you can get information on topics such as filing your business taxes and registering for a GST/HST account. The seminars are offered on a regular basis in communities across the country.

For more information on starting a business in Canada, contact the Canada Business service centre in your province or territory or call toll free 1-888-576-4444 (TTY 1-800-457-8466).

Wishing you success with your small business!

By Canada Business on February 3, 2012


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