How the Ontario Self-Employment Benefit Worked with EI

If you were on Employment Insurance (EI) and wanted to start a business, the Ontario Self-Employment Benefit (OSEB) provided income support while you built your business instead of searching for a job. OSEB redirected your EI benefits to help cover your living expenses during the early stages of self-employment. However, the OSEB program was discontinued in Ontario in 2016. This article explains how OSEB worked with EI before its closure and helps you learn about current alternatives for Ontario entrepreneurs.

How EI and the Ontario Self-Employment Benefit Worked Together

The Ontario Self-Employment Benefit was funded through Employment Insurance and delivered by the Province of Ontario. When approved for OSEB, your EI entitlement was redirected into the program.

What Happened to Your EI When You Started OSEB

You needed to be eligible for EI or have an active EI claim to qualify for OSEB.
Once accepted, your regular EI benefits stopped.
You received weekly OSEB income support instead of EI while you worked full-time on your business.
The weekly payment amount was generally similar to your EI benefit rate, not a business grant or lump sum.
Payments could last up to 42 weeks, depending on your remaining EI entitlement and program approval.

OSEB replaced EI benefits for eligible entrepreneurs, offering support during the transition to self-employment.

What the OSEB Payments Were For

OSEB income support was meant to cover personal living expenses such as:

Rent or mortgage
Utilities
Groceries
Transportation
Childcare related to work hours

Business expenses had to be funded separately through savings, loans, or other funding programs.

If you need startup or growth funding today, GrantHub lists many grants for Canadian businesses. See which ones fit your profile.

Eligibility Rules That Affected EI and OSEB

To access OSEB, you had to meet strict eligibility conditions that linked the program to EI.

You Were Eligible If You:

Lived in Ontario
Were unemployed or underemployed
Were eligible for EI or had recently received EI benefits
Had a viable business idea you could work on full-time
Were not returning to school full-time or working another job

You Were Not Eligible If You:

Wanted to run a business part-time
Planned to keep collecting regular EI while building your business
Were only seeking funding to buy equipment or inventory
Could not commit to full-time self-employment activities

Once accepted, your main focus became building your business.

What You Had to Do While Receiving OSEB Instead of EI

OSEB came with stricter requirements than EI. You no longer reported job searches, but instead reported on your business progress.

Typical obligations included:

Completing a business plan approved by a service provider
Attending mandatory training or coaching sessions
Submitting regular progress reports
Actively working full-time on your business

If you stopped meeting these conditions, payments could be paused or ended early.

Common Mistakes to Avoid

Assuming You Could Collect EI and OSEB at the Same Time

You could not receive regular EI payments while enrolled in OSEB. EI was redirected into the program.

Treating OSEB as a Business Grant

OSEB did not pay for equipment, marketing, or inventory. It covered personal living costs only.

Starting Your Business Before Applying

If your business was already operating, you might have been ineligible. OSEB was for starting, not expanding, a business.

Underestimating the Time Commitment

OSEB required full-time effort. Side projects or other employment could disqualify you.

Frequently Asked Questions

Q: Can I receive EI after the Ontario Self-Employment Benefit ends?
Possibly. This depended on how much of your EI entitlement was used during OSEB and whether you still met EI eligibility rules.

Q: Was the Ontario Self-Employment Benefit taxable income?
Yes. OSEB payments were considered taxable income and had to be reported on your tax return.

Q: How long could I receive OSEB payments?
You could receive weekly payments for up to 42 weeks, depending on your approved plan and remaining EI eligibility.

Q: Did I need to repay EI or OSEB later?
No. OSEB payments were not loans. As long as you met program requirements, they did not need to be repaid.

Q: Can I apply for other grants while on OSEB?
Yes. You could apply for business grants or loans, as long as they did not conflict with OSEB rules or your full-time commitment.

Alternatives for Ontario Entrepreneurs Today

Since OSEB ended in 2016, Ontario entrepreneurs must look for other ways to fund their transition from unemployment to self-employment. Current options include:

Self-Employment Training Programs: Some local organizations offer business planning support and coaching.
Business Grants and Loans: Programs such as the Starter Company Plus grant (an Ontario government program for new entrepreneurs), Futurpreneur Canada (a national non-profit supporting young Canadian entrepreneurs), and various municipal grants are available.
Employment Ontario Services: These centres provide job search help, training, and referrals to entrepreneurship resources.

GrantHub’s database can help you find the latest grant and funding programs available in Ontario and across Canada.

Repayable vs Non-Repayable Business Funding in Canada
How to Prepare Financial Statements for Grant Applications in Canada
Alberta Self-Employment Program: What Support Is Included? (for interprovincial comparison)

Next Steps

If you’re on EI and thinking about starting a business in Ontario, remember that the OSEB program is no longer available. Instead, look into current grant, loan, and training options to support your startup journey. Understanding the requirements and support available can help you make informed decisions and avoid common mistakes.

GrantHub helps Ontario founders compare funding options and find programs that fit their needs.

How the Ontario Self-Employment Benefit Worked with EI