What should Quebec do with $900 million in parental leave surpluses?

By Sophie Mathieu, Policy Options

Although parents in Quebec enjoy better access to parental benefits than elsewhere in Canada, some inequalities persist. (Pexels photo)

(Version française disponible ici)

What should a government do with parental leave surpluses? The recent drop in births in Quebec to their lowest level in 20 years has swelled the excess money in the province’s parental insurance fund (Fonds d’assurance parentale). Over the next four years, the pot should exceed $900 million.

Some are suggesting that benefits be extended, targeting families unable to find a childcare space. However, such a measure applied without any further guidance would risk reinforcing women’s traditional role as primary caregivers.

Quebec could instead draw inspiration from Sweden’s parental benefit program while avoiding some of its pitfalls. Sweden offers a program designed to promote equality between parents through the participation of fathers in childcare. For some weeks now, it has also been offering parents the possibility of transferring part of their parental benefits to grandparents and relatives.

Parental leave in Quebec

The Quebec Parental Insurance Plan is available to parents who earned a minimum income of $2,000 in the year preceding the application. A basic and a special plan each offers flexible options in terms of duration and income replacement rate. In both cases, the maximum insurable salary is $94,000.

The basic plan provides 18 weeks of leave for pregnancy and childbirth, with an income replacement rate of 70 per cent. The parent who has not given birth is entitled to five weeks of leave (also at 70 per cent). The parents can also share 32 weeks of leave between themselves, with a replacement rate of 70 per cent for the first seven weeks, and 55 per cent for the following 25 weeks.

The special plan offers a shorter benefit period with a higher salary replacement rate to parents who wish to maximize their income over a shorter period. It provides up to 15 weeks of leave to mothers, three weeks to the second parent and 25 weeks to be shared, in all cases with a salary replacement rate of 75 per cent.

For each plan, Quebec also encourages sharing parental benefits by offering additional weeks of paid leave if both parents each take a minimum number of weeks off. The aim is to encourage greater and longer use of benefits by fathers or the second parent and, ultimately, greater equality.

Although parents in Quebec enjoy better access to parental benefits than elsewhere in Canada, some inequalities persist. On average, 84 per cent of mothers and 74 per cent of fathers who have welcomed a new child receive benefits. Mothers withdraw from the labour market for much longer (45.9 weeks) than fathers (9.7 weeks). What’s more, only 83 per cent of Quebec families make full use of their benefits.

Gatting fathers more involved: taking inspiration from Sweden

In Sweden, parental benefits are calculated in days rather than weeks. Each parent is entitled to 240 days’ leave, for a total of 480 days (around 69 weeks) for a couple. Single-parent families are also entitled to 480 days.

Of the 240 days granted in benefits, 150 can be transferred to the other parent, while 90 days (around 13 weeks) are exclusive, and non-transferable. Sweden also limits leave taken simultaneously by both parents to 60 days. The remaining days must be used by one parent at a time, allowing each parent to spend time alone with their child and develop their parenting skills.

Quebec could thus extend the duration of benefits for the second parent – usually the father – while introducing incentives to limit simultaneous leave-taking. By encouraging greater involvement on the part of fathers, such an approach would be more egalitarian and help reduce the “motherhood penalty.”

Parental leave for grandparents… and friends?

Since July 2024, Sweden has been allowing 300 days of paid parental leave to be transferred, in whole or in part, to a person other than the parents, such as a grandparent, parent-in-law, or even an unrelated person close to the family. The rationale behind this decision is that approximately one Swedish couple out of two does not use all the 480 days of parental leave available to them, an observation that applies to a lesser extent in Quebec.

Transferring a portion of parental benefits offers greater flexibility for single-parent families or those facing challenges that prevent parents from taking full advantage of their leave.

Quebec could consider such a measure, with caution. Transferring parental leave to extended family members could create pressure on grandparents, in a context where many are still working. This possibility could also increase inequalities between families with strong support networks and those who do not benefit from such networks, such as immigrant families.

When fathers withdraw from caregiving

The potential disengagement of fathers from parental duties is another issue. The more parental leave is reserved for the exclusive use of fathers, the more likely they are to use it instead of passing it to mothers. In Sweden, more days of leave are reserved for the second parent (90 days, or 13 weeks) than in Quebec (three to five weeks), which helps to limit the risk that fathers opt out of parental leave altogether. If Quebec were to consider allowing leave to be shared with third parties, it would be essential to add additional weeks of benefits to the parent who did not give birth and encourage fathers’ involvement.

Adding the possibility of transferring leave to third parties could, however, complicate the administration of the Quebec Parental Insurance Plan. The bureaucratic process could become more cumbersome for families, and employers could be faced with more complex leave management. In Sweden, people wishing to claim parental benefits must give their employer two months’ notice.

The Swedish reform offers interesting avenues for Quebec, particularly in terms of flexibility and fathers’ involvement in childcare. By adopting a model inspired by Sweden, but adapted to Quebec realities, Quebec could strengthen parental equality and offer families greater flexibility in the use of benefits. The rest of Canada could take note.

The opinions expressed by the author are personal and do not necessarily reflect those of her employer.

This article first appeared on Policy Options and is republished here under a Creative Commons license.