Self-Employment Benefits
What the Program Offers
Three types of
support are available for unemployed persons
wishing to become self-employed: coaching,
technical assistance and financial support.
In the area of
coaching, the Department of Human Resources
Development Canada (HRDC) entrusts local
organizations with the task of providing a
complete coaching program to enable
self-employed workers to learn about the
various "technical" aspects of
their new jobs such as marketing, accounting,
networking, basic data processing, taxation,
insurance and other subjects of interest.
The
self-employed worker can also count on the
support of a counsellor to provide assistance
throughout the start-up process. The
counsellor provides technical assistance, for
example, help with the accounting or the
creation of marketing tools, and monitors the
progress of the new business.
Finally, HRDC provides generous financial support by
allowing employment insurance claimants to
receive the full amount of benefits for which
they qualify without imposing any penalty on
revenues derived from the new business. This
allows self-employed workers to concentrate
on getting their businesses up and running
without having to worry about paying the
monthly bills.
Eligibility Requirements
The first
condition to be met in order to qualify for
self-employment assistance is to be
unemployed. A participant must have an
established Insurance Benefit claim, or one
that has ended within the last three years.
The program is also open to persons who
received maternity or parental benefits
within the past five years, after which they
remained out of the labour market to care for
the child and are now seeking to re-enter the
labour force.
In addition,
participants must:
- be
legally entitled to work in Canada;
- attend an
orientation session given by the
local coordinator;
- have no
previous participation in a
self-employment assistance activity
within the framework of a program
funded by HRDC during the past five
years;
- agree to
draw up and submit, within a
reasonable period of time, a business
plan acceptable to HRDC and showing
potential for long term employment;
- start a
new business or take over an existing
business in which they had no prior
ownership;
- agree to
work full-time on the business while
receiving financial assistance (at
least 30 hours per week, except in
exceptional circumstances accepted by
the Department)
- agree to
contribute equity, the amount of
which is to be determined in
cooperation with the coordinator.
There are also
criteria concerning the type of business that
qualifies for self-employment assistance:
- the
business must be controlled by the
participant in the program (where
there are associates, the agreement
with them must clearly specify that
the participant holds at least fifty
per cent of the shares; in the case
of a limited company, the participant
must hold a majority of the shares
with voting rights);
- revenue
must not be derived primarily from
commissions;
- the
business must not be a subsidiary of,
or financially supported by, another
company; persons acting as agents for
the business or sub-contractors are
not eligible for support;
- the
business must be suitable for public
funding - i.e., it must not exploit
sex, religion or politics;
- the
business may involve an area of
seasonal work, but the participant
must work full-time on starting up
the business; the participant may be
engaged in more than one type of
seasonal enterprise;
- worker
cooperatives are eligible businesses.
How to Begin
- Attend an
orientation session given at your
local Human Resource Centre of
Canada. You will assess your
aptitudes for self-employment. The
coordinator will analyse your
strengths and needs, and recommend
whether or not self-employment is a
viable option for you to pursue.
- Identify
a business opportunity and prepare a
business concept. You must analyse
the targeted market and try to
determine whether your business ideas
have any chance of success in terms
of attracting and keeping customers.
- Prepare a
business description. This document
must describe the product or services
the business will offer, who will buy
what the business has to offer, how
the business is unique or different
from the competition, and why the
business will be successful.
- Have your
business concept reviewed by the
Self-Employment Coordinator in your
area. The coordinator will go over
your plan, then, in conjunction with
an HRDC official, decide whether or
not your application will be
approved.
- Sign an
agreement with the Government of
Canada in which the parties undertake
to fulfil their obligations under the
program.
- Prepare a
business plan. Help in preparing your
business plan is available from the
Self-Employment Coordinator in your
local community. The business plan
must cover all aspects of the
business: management, marketing plan
(description of the product or
service, indication of where it will
be available, price, promotion),
production plan (if applicable),
financing, organization of the
business, laws and insurance,
cashflow forecasting, accounting and
systems, and assessment of the
business risk.
Concrete examples
Gérald
Gallant, from Prince Edward Island, is an
electrician. He applied for Self-Employment
Assistance and took all the courses under the
program. Today, he is an independent
contractor with a work order book that is
filled to capacity two months in advance! He
created two jobs: his own, and that of the
person he has hired as his assistant.
Loretta
Arsenault, also from Prince Edward Island,
worked as a cook in a school for some ten
years. She has a special talent for preparing
traditional Acadian dishes and began making
some of these dishes to sell at flea markets
on weekends. Since her dishes sold very well
and the local bakery had closed its doors,
she decided to start a small business, La
cuisine acadienne. With the support of
the Self-Employment Benefits, she received
coaching in entrepreneurship in January 1997,
and opened her shop in April 1997. La
cuisine acadienne produces traditional
Acadian dishes as well as bread, vanilla drop
cakes, pâtés and cinnamon buns. The house
specialties are râpure and
pothead. Râpure is a
dish made from shredded potatoes mixed with
pork, chicken and onions, that is baked and
eaten hot with butter. Some people like it
with molasses. Pothead is a loaf
similar to headcheese. Loretta's business is
thriving and now employs two full-time and
three part-time workers, as well as a student.
She says that she learned a great deal
through the coaching program and feels that
the Self-Employment Benefits have greatly
improved her chances of success.
