A comparative study of governmental financial support and resilience of self-employed people in Sweden and Canada during the COVID-19 pandemic

Self-employed workers are important drivers of economic growth and constitute a significant segment of the labour force in both Canada and Sweden. The COVID-19 pandemic posed acute challenges to this group, including income losses, restrictions on operations, and closures, with potential negative effects on well-being and business survival. Although Sweden and Canada share characteristics as advanced northern countries, their welfare regimes and pandemic strategies differed: Sweden (a social-democratic welfare state) applied relatively mild restrictions and relied on universal protections, whereas Canada (a liberal welfare state) implemented stricter public health measures, including lockdowns, with more means-tested supports. Prior research indicates self-employed workers were especially vulnerable due to limited resources and overrepresentation in severely affected sectors, yet also showed resilience via adaptation and opportunity-seeking. The study’s purpose was to compare governmental financial support measures in Sweden and Canada and examine how these measures affected the resilience of self-employed people during and after COVID-19 restrictions, combining policy analysis with qualitative interviews to capture both formal policy intent and lived experiences.

The paper situates its inquiry within research showing that self-employed people experienced disproportionate economic and psychosocial impacts during COVID-19, including reduced hours and revenues, elevated uncertainty, stress, and worsened well-being compared to employees. Studies report increased risks of loneliness, insomnia, fear, and burnout among entrepreneurs, and highlight sectoral disparities with hospitality, food, transportation, and personal services most affected. Government responses globally included subsidies, tax deferrals, and loans; however, gaps persisted, notably for recent entrants, part-time and platform workers, and those with mixed incomes. Resilience literature emphasizes adaptive capacity and the role of supportive ecosystems; evidence (e.g., from Hungary) links financial support to greater business resilience and optimism. Comparative policy analyses suggest micro-firms were less likely to receive support than larger firms. The review underlines the need to evaluate policy effectiveness in protecting the self-employed and enabling crisis response and recovery.

Design: Mixed-method study integrating comparative policy analysis with qualitative semi-structured interviews to triangulate policy intent with lived experiences. Data sources for policy analysis: Publicly available official documents on COVID-19 support measures in Canada (Government of Canada websites and agencies) and Sweden (Government Offices of Sweden, Swedish Tax Agency, Swedish Agency for Economic and Regional Growth, Verksamt). Policies were categorized into employment protection, social insurance, and unemployment protection. Interviews: Conducted November–December 2022 after restrictions ended. Purposive maximum-variation sampling targeted self-employed (fewer than 10 employees) in hard-hit service sectors in Jämtland, Sweden, and Ontario, Canada. Nine participants: Sweden (n=4: small shop owner, pastry business owner, Amazon consultant, work optimization business owner); Canada (n=5: optician, hairdresser, chef/restaurant owner, academic editor, gym owner). Interviews (30–70 minutes) were audio-recorded and transcribed verbatim. Analysis: Four-step process. (1) Policy document analysis using skimming, reading, interpretation, and constant comparative method to identify initial categories (employment protection, social insurance, unemployment protection). (2) Open coding of interview transcripts to identify subcategories. (3) Content analysis merging policy and interview data; constant comparative method to synthesize across sources; formation of 34 subcategories aggregated into seven categories, then distilled into three main categories: Welfare protection and effects; Self-employed well-being; Agility during COVID-19. (4) Cross-country comparison integrating findings for Sweden and Canada to identify similarities and differences. NVivo (1.7) supported data management. Ethics approval obtained (Sweden’s Ethical Review Board Dnr 2020-05223); informed consent, confidentiality, and secure data handling were ensured.

- Policy architectures and access: • Sweden’s main business support was short-time work (wage support) for employers with employees; sole traders (about 42% of Swedish businesses) were ineligible. Canada’s analogous major measure was the Canada Emergency Wage Subsidy, also excluding firms without employees. Policymakers in both countries prioritized firms with employees, aligning with global patterns where micro-firms were about half as likely to receive support as large firms. • Social insurance expansions occurred in both countries. Sweden enhanced sick pay (waived waiting day, coverage for suspected carriers) and temporarily broadened unemployment insurance access for the self-employed (easier eligibility, ability to pause operations). In Canada, eligibility thresholds for EI special benefits were reduced, and new temporary benefits were introduced for those outside EI: CERB and later CRB, as well as CRSB for sickness/isolation. • Despite expansions, gaps remained. In Sweden, many self-employed did not apply due to ineligibility and delays. In Canada, strict eligibility criteria (e.g., minimum $5,000 prior earnings) excluded many, especially recent or low-income self-employed. - Lived experiences and perceived fairness: • Mixed experiences: some found applications straightforward and supports helpful (e.g., Swedish short-time work; Canadian rent subsidies and CERB), while many in hard-hit sectors perceived supports as unfairly distributed, favoring larger firms, with complex processes and repayment risks. • Repayment issues occurred in both countries (e.g., Swedish short-time work repayments due to unclear guidance or dividends; Canadian CERB repayments tied to filing status/earnings thresholds), undermining resilience. - Resilience and telework: • Self-employed unable to telework (e.g., retail, restaurants, gyms, hairdressing) were less resilient due to lockdowns/restrictions and revenue collapse. Those able to telework coped better, often aided by savings, partners’ income, or low debt. - Well-being impacts: • Financial strain, uncertainty, application delays, and ineligibility decreased well-being, contributing to stress, burnout, concentration problems, and, in some cases, harmful coping (e.g., increased alcohol use). Reduced well-being negatively affected business functioning and resilience. - Agility and adaptation: • Many pivoted quickly: new products/services, delivery solutions, digitalization (online ordering, virtual meetings/training), and proactive initiatives to retain customers. Such agility was essential for survival but constrained by limited resources and debt; grants/tax relief were perceived as more helpful than loans. - Cross-country contrast and commonalities: • Canada introduced temporary income supports (CERB/CRB) effectively extending unemployment protection to self-employed during the crisis; Sweden already had mechanisms to extend unemployment insurance to the self-employed and enhanced them. Common across countries were lower resilience among non-telework businesses, dissatisfaction with targeting and fairness, and negative consequences of support repayments.

Findings address the core question of how governmental financial supports influenced self-employed resilience in Sweden and Canada. Canada’s temporary income supports (CERB/CRB) demonstrated state capacity to include self-employed workers in unemployment-style protections during crises, while Sweden’s pre-existing universalist architecture enabled rapid enhancement of social insurance and temporary unemployment options for the self-employed. Nevertheless, in both contexts, design features (eligibility rules excluding sole traders or low-earnings new entrants), administrative delays, and repayment obligations undermined resilience, particularly for micro-firms and on-site service businesses that could not telework. These results underscore that resilience depends not only on individual agility but also on inclusive, timely, and well-targeted policy ecosystems. The study corroborates literature showing sectoral unevenness of impacts and links between financial strain, diminished well-being, and impaired business performance. It also highlights mis-targeting and leakage: supports reached some relatively stable firms while missing many most in need, consistent with emerging evidence of excess payments and underutilization by vulnerable self-employed. By integrating policy analysis with interviews, the study reveals gaps between policy intent and lived experience, suggesting that tailoring and equitable access are critical to bolster resilience of viable small businesses during future shocks.

Canada’s introduction of temporary unemployment-style benefits (CERB/CRB) extended income protection to self-employed workers during COVID-19, while Sweden relied on and enhanced existing social insurance and unemployment supports for the self-employed. Across both countries, self-employed people unable to telework were less resilient due to lockdowns, restrictions, and financial difficulties. Interviewees in hard-hit sectors perceived supports as unfairly distributed, often favoring larger firms, and reported reduced well-being that impeded their business resilience. Policy implications include: tailoring programs to the diversity of viable small businesses with greatest need (especially non-telework sectors), ensuring small firms access benefits on par with larger firms, prioritizing grants/tax relief over debt for crisis survival, and improving clarity and timeliness to avoid detrimental repayments. In Canada, maintaining inclusive unemployment protection for self-employed beyond the pandemic could reduce social protection gaps and support entrepreneurship. Arctic countries should view targeted support for viable small businesses as an investment in workforce flexibility and resilience.

- Small qualitative sample (n=9) limits generalizability; however, rich data and maximum variation sampling enhanced adequacy and depth. - Geographic focus on one Swedish region (Jämtland) and one Canadian province (Ontario) may limit transferability to other contexts. - Post-hoc interviews (Nov–Dec 2022) rely on recall of pandemic experiences, introducing potential recall bias. - Policy analysis based on publicly available documents; implementation details and informal practices may not be fully captured. - Integration of diverse policy regimes complicates direct comparability; nonetheless, triangulation across documents and interviews, clear process documentation, and audit trails support trustworthiness.