When Alexandra Stathopoulos gave birth in 2015, there were complications. The baby was fine, but Alexandra was not: she would not be able to carry another child. The doctor told Alexandra that if she and her husband, Nick, wanted more children, they should consider surrogacy. They did, and they did.
The couple lived in Melbourne, Australia. What they quickly learned was that, in the country they call home, there weren’t a lot of surrogates. The process could take years, or in fact it might never happen. So they started looking elsewhere.
One place they heard about was Canada. Medically advanced, progressive, politically stable, English-speaking—it was appealing. In early 2019, they started working with a leading Canadian surrogacy agency, Canadian Fertility Consultants (CFC). The Stathopouloses understood that the agency would help them find a surrogate, then help them manage the process, including booking appointments, arranging travel and managing the reimbursement of the surrogate’s expenses.
Surrogacy agencies in Canada occupy a murky legal space. A federal law expressly prohibits the exchange of money “for arranging for the services of a surrogate mother.” But experts say hundreds of people from Canada and around the world are interested in pursuing surrogacy in this country every year. So companies like CFC seem to have found creative ways of selling their assistance. One is to not explicitly charge for “matching” at all—only for “consulting”—and they take their fee only after the match between surrogate and parent has been completed.
In late February the Stathopouloses received a profile for a potential surrogate named R. Alexandra asked for a little more information about the woman. But two days after the introduction email, the company told her R. had been snapped up by another couple. At the end of March, CFC proposed another surrogate, called M., but she lived in a province the couple had been advised by their lawyer to rule out due to parentage laws there. It was April before they were offered the next potential surrogate, S., and they emailed back right away to say they’d love an introduction.
On April 11, the couple wired over 23,034.16 CAD to cover CFC’s agreement costs, including the 18,015 CAD consulting fee and 5,000 CAD to set up the surrogate’s reimbursement fund. That amount was in addition to the 5,043.54 AUD they’d paid to a fertility lawyer, recommended by CFC, back in February and the 1,795 USD they’d spent in March to ship their cryopreserved embryos to a Toronto fertility clinic, also recommended by CFC.
According to emails from that time, the Stathopouloses met S. over a Skype call early Saturday morning on April 13. (It was still Friday in Canada.) But not long after their introduction, their surrogate stopped communicating. By May 10, after numerous attempts at contact and appeals to CFC for help, the Stathopouloses declared themselves ghosted.
Finally, in August, the couple were connected with another woman, called T. They had a call, and added her to a group chat called “Team Surrogacy.” When they attempted to arrange another call, she removed herself from the group chat. They never heard from her again. In September, both N. and V. were available. Neither panned out. In November, there was A., but CFC told the couple that she wanted some time to lose weight and to hold off embryo transfers until almost a year later. The Stathopouloses told CFC they were considering pulling out.
CFC said they couldn’t believe the couple’s terrible luck. “We were told that this is a unique case,” recalls Nick—that it had never happened before.
But hadn’t it?
Over the years, more than a half dozen other couples working with CFC have told me eerily similar stories. Often, would-be parents were presented with a surrogate, which triggered payment, only to have the arrangement fall through. Some surrogate candidates seemed ill-suited—BMI too high, multiple prior C-sections, poor mental health—or not appropriate—from the wrong province, unwilling to work with international clients, in precarious circumstances, or single mothers when single mothers had been specifically ruled out. Others just stopped communicating after an initial meet-and-greet.
There was little or no refund when the matches failed, families said. The Stathopouloses, for instance, say they lost about 20,000 CAD. A couple from Taiwan was only offered 3,750 CAD back of their 12,500 CAD fees. A Nova Scotia woman, when she and her husband asked for their money back, claims that CFC’s then owner, Leia Swanberg, replied, “Dream on.” (Asked whether she'd ever replied to a client this way, Swanberg did not respond.)
Some of the couples I spoke to eventually did get a surrogate through CFC, and do now have a child, but the same evasive tactics continued during the surrogacy, they say. Despite multiple requests, they received little accounting of how the expense money they were paying via the company was being disbursed. If the accounts were eventually turned over, they seemed to be riddled with errors. When challenged, CFC stopped communicating or even threatened the clients with legal action, families reported.
Leia Swanberg, founder and long-time CEO of CFC, said in an email to me that she was very sorry to hear about this. “We know that surrogacy can be a difficult process for clients with its ups and downs.” She said they ask clients to share their concerns and issues. “We do our best to work with them constructively to find resolution, including offering refunds if we are unable to match them with a surrogate in our program.”
This is a story about a darker side of Canada’s booming surrogacy industry. It’s about how people desperate to be parents can find themselves pressured, deceived, trapped and threatened. It’s about how Canadian lawmakers, regulators and law enforcement decline to act. It’s about one of the many reasons we need to revisit our law on assisted human reproduction.
Surrogacy is legal in Canada, but we have a federal law, the Assisted Human Reproduction Act, passed in 2004, that sets some conditions. One is that if you’re an intended parent, you are not allowed to pay a surrogate to carry your child. The implication is that the surrogate has to do it just because she wants to help. If you don’t happen to know such a woman, you are not allowed to pay someone to find you one. If you do happen to know one, but don’t need a surrogate yourself, you can’t take money to match her to a family who’s looking.
The very first “test tube baby” was born in 1978, and the mother had not been fully informed that in vitro fertilization had never been successful before in humans. In 1986, a New Jersey woman who’d agreed to conceive a child for another couple ended up taking the child back from the intended parents and keeping it for 87 days as the legality of the situation was figured out. Known as the “Baby M” case, it gave the world a glimpse of just how complicated things could get. Assisted reproduction felt like an area that needed regulating.
At the time that our law was being formulated, there was concern about surrogacy commercializing children and exploiting women. So lawmakers made it illegal to pay a woman for carrying a child, and illegal to pay or be paid for matching surrogates to would-be parents.
Indeed, the language of the law makes it sound like paid matchmaking—including through surrogacy agencies—is prohibited in Canada. Under a section called “Acting as intermediary” the law says, “No person shall accept consideration for arranging for the services of a surrogate mother, offer to make such an arrangement for consideration or advertise the arranging of such services.” The harshest penalty is up to 10 years in prison and up to 500,000 CAD in fines. The law anticipated regulations around surrogacy and gamete donation, but nothing is said about regulating intermediaries like agencies—presumably because there weren’t supposed to be any.
There were only two surrogacy agencies when the law passed: Canadian Surrogacy Options (CSO), which opened in 1992 and was run by Joanne Wright (and now by her daughter, Robyn), and Surrogacy in Canada Online, opened by Sally Rhoads-Heinrich in 2001. Leia Swanberg was a surrogate twice and worked in the industry as a consultant, before starting her own agency, CFC, in 2007.
In the first few years after the law passed, many fertility clinics and lawyers were nervous about working with Canadian agencies. It was as though everybody was waiting for someone to be charged with a crime.
Then it happened. In February 2012, the Royal Canadian Mounted Police (RCMP), Canada’s federal police force, raided CFC’s offices and seized the company’s business records. Charges were laid both against Swanberg (then named Picard) and against her company. In December 2013, she pled guilty and was convicted.
The case was the first and, so far, only conviction under the Assisted Human Reproduction Act. Swanberg and CFC were convicted of paying egg donors flat fees for donating and paying surrogates flat fees for contract gestation. (Swanberg herself—not CFC—was also charged for and pled guilty to taking referral fees from an American lawyer who’d been running a baby-selling ring.) She could have been sent to prison or fined half a million dollars, but the total penalty shared by CFC and Swanberg was just 60,000 CAD.
In many ways the case was most interesting for what CFC was not charged for: arranging the services of surrogate mothers. It is fundamentally what CFC does and what intended parents are paying for. Sara Cohen, a Toronto fertility lawyer, spoke to me for an article at the time of the conviction and wondered aloud what the prohibition against “arranging” even meant if it didn’t mean that.
Was taking money to match surrogates to families not prohibited, after all? Was Health Canada signalling that it would just not enforce this part of the law? Alicia Czarnowski, whose PhD research at the University of Ottawa’s Faculty of Law is on surrogacy consultants, says it was almost disappointing that CFC pled guilty, rather than allowing the case to go to trial, because we got no clarity on which activities were actually banned. Before the case, you could assume from the wording of the law that intermediaries were prohibited, she says, but after it, you had to wonder if Health Canada had a different interpretation.
Whatever the reason, not charging CFC for arranging the services of surrogates was perceived as a gentle green light. Clinics seemed less concerned about working with agencies after that. Lawyers too. New agencies entered the field. Estimates vary, but experts say there are now somewhere between nine and two dozen of them based in Canada. The word “match” appeared more liberally on websites. CFC continued to operate and remained the dominant player. If CFC wasn’t charged for this, people figured, maybe no agency would be—maybe the government would just continue to turn a blind eye.
And that’s exactly what has happened. Almost 10 years on, there have been no charges, no convictions and no attempts to clarify the legality of matching and other activities carried out by surrogacy agencies in this country.
But people want clarity. Almost everyone I’ve spoken to who is involved in surrogacy—agency owners, former agency employees, surrogates, intended parents, academics—wants regulations.
It’s interesting to compare surrogacy agencies to private adoption agencies, which are provincially regulated and licensed. In Ontario, for instance, adoption agencies have to be not-for-profit, governed by a board of directors and relicensed every year, and the people who coordinate private adoptions have to be trained.
Not so with surrogacy agencies. Despite the fact that they work with sometimes vulnerable people, and are helping to bring children into the world, there are no standards, no requirements, no certifications, no surrogacy-specific licences, and while Health Canada is meant to have the power to audit these organizations, experts say it's not clear that these inspections are actually happening. A surrogacy agency can be anything, and be operated by anyone at all who decides to set one up.
Just days after Swanberg’s conviction in 2013, a person contacted me about CFC. They said they’d recently worked with the agency and that things had not gone well. In a long phone call, they described paying the fee, having surrogates fall through, and CFC’s response when they asked for a refund.
I opened a file.
As a reporter who’d been covering the fertility beat for about eight years by then, I’d crossed paths with Swanberg many times. I’d interviewed her at length in her home in 2011 as part of work I was doing on egg donation. (She had donated six times.) She’d sent me an angry email after a presentation I gave at a meeting of the Canadian Fertility and Andrology Society, a body representing people working in the fertility industry. We had talked on the phone and emailed multiple times in the lead-up to the court case. I was in the courtroom on the day she was convicted.
I’d always found Swanberg warm, unpretentious, open and even recklessly candid.
I interviewed her in person again in 2015, this time for an article in The Globe and Mail about how CFC was doing in the wake of her criminal conviction. Business was booming, she told me: every month, her company was overseeing 15 to 20 surrogate matches and 30 egg donations. About 100 surrogates were pregnant as we spoke, she said.
The article was pretty upbeat—too upbeat, according to CFC clients who started getting in touch after it was published. The first was a woman from Nova Scotia, Lynn Johnson (not her real name), who, together with her husband, had used CFC to have a child through surrogacy in 2013. “Please contact me to hear what really happens to intended parents when they sign up,” she wrote.
The couple had ultimately been successful, and had a child with the help of CFC, but the journey was a difficult one. They paid their fees only to have the first two surrogates disappear. The third had seemed promising—she passed the physical and psychological screenings—but dropped out after that.
The couple ended up doing surrogacy with a fourth candidate, a single mother who lived in Quebec—a province most intended parents tried to avoid. That’s because, at the time, the province defaulted legal parentage to the person who gave birth to the child, so becoming the legal parents could be complicated if the child was born there.
Things continued to be challenging after the pregnancy was established. About a month after the embryo was transferred, Johnson recalls, the surrogate got married. Shortly after the marriage, the woman stopped communicating with the intended parents altogether.
When they appealed to Swanberg, she instructed them to send flowers. “I said, ‘Why would I send her flowers? All I’m trying to do is find out where the woman who’s carrying our child is,’” Johnson told me. “And that’s when [Leia] said, ‘Do you want to get your baby? You better do what I say.’” (Leia Swanberg did not respond to a question about whether she'd ever said something like this to a client.) Johnson, a physician whose work included serving in war zones, told me, “I’ve been in Baghdad in crossfire, in Somalia. But the worst experience of my life was dealing with this woman.”
In the end, Johnson and her husband, with the help of CFC, did get the child they’d longed for.
Stephen Flynn and Chris Imai, a couple in Vancouver, worked with CFC in 2015. In what was now a familiar narrative, they told me that after agreeing to a surrogate they’d been introduced to through CFC, they paid the fees, only to have their fertility doctor raise serious concerns about the surrogate. Her three prior C-sections, the doctor told them, made her too risky a candidate.
The couple asked CFC for more profiles, but, they say, none came. After 10 months, they asked for their money back. 1,506.24 CAD of the 2,000 CAD in expense money they’d advanced was returned to them—after deductions for a meal, gas, lost wages and an undefined “pre-pregnancy expense” for the ruled-out surrogate—but the roughly 5,000 CAD in consulting and trust-management was non-refundable, they were told.
“[CFC] give you one medically non-viable candidate, and then they ghost you,” says Flynn. Multiple calls and emails went unanswered.
Jane Smith (not her real name) and her husband, also from Vancouver, explored surrogacy with CFC in 2017. They were offered a surrogate and had a Skype call. After the call, they were given a two-week “dating period,” recalls Smith. “I wanted to talk to her as much as I could during that two weeks, because I wanted to make sure that this person was going to be the right fit for us before I handed over all that money.”
But something felt off. The surrogate was hard to get a hold of. She kept cancelling calls. When Smith did a bit of sleuthing on social media, she found that the woman’s story didn’t check out: she had said she was living in her parents’ basement with her young child, but seemed instead to be in a dicey domestic situation with a violent partner.
Smith and her husband did not sign on with CFC. Instead, they went with a smaller agency, matched with a “wonderful” local woman, and welcomed their daughter in early 2019.
But Smith kept up with other CFC families, speaking with them and reading their stories in online groups. Unlike her, many had handed over the fee only to have their surrogate fall through, she says, and many have been matched multiple times without success. “Every time they rematch you, they shut you up—for a while anyway,” says Smith. Her impression is that these new matches were never genuine options that CFC thought would work out. “I can’t believe there could be that many broken matches.” She says she knows of families who started trying before she did, who still don’t have babies. If you can’t afford to walk away, it seems like you “just sit there,” says Smith. “You’re stuck with them.”
There aren’t as many women in Canada interested in being surrogates as there are people who need them. And the gap is getting worse. That puts pressure on surrogacy agencies and drives some of them to accept women who might not be appropriate, aren’t quite ready to commit, or don’t fully understand what they’re getting into.
According to people who have worked at CFC, who have asked not to be named, this is routine at the agency. Three different people told me surrogates are pushed through the system too quickly. Some women end up dropping out when they realize that 20,000 CAD is what they can be reimbursed for expenses, not a flat fee. Other women were offered as surrogates before CFC had completed their promised check with the potential surrogate’s partner, who wasn’t actually supportive. Often surrogates just change their minds.
“People do change their mind,” says Scott Swanberg, current CEO of CFC, long-time CEO of the egg donor branch of the organization, as well as Leia Swanberg’s ex-husband. But he denies that women are pushed through too quickly. “Things come up in their lives,” he says, and no one can force them to go through with a surrogacy.
Three people who’ve worked at CFC told me that, sometimes, the agency leaves important details out of the surrogacy profiles that potential parents are viewing. Maybe the woman had a potentially dangerous blood pressure condition, preeclampsia, during a previous pregnancy, but that detail isn’t included. Maybe she had multiple C-sections. Maybe she has a history of mental health issues. (Scott Swanberg says it depends on the severity of a condition. Ultimately, he says, clinics will decide.)
According to people who have worked at CFC, parents sometimes match with such a woman, pay their full consulting fees and put up some money for reimbursements, only to have the disqualifying information come up during a screening. Then their surrogate may have to drop out.
Sometimes, potential surrogates are suggested to intended parents before they’ve even completed all the paperwork or confirmed that they’re fully committed, I was told. The agency sometimes didn’t yet have things like releases and criminal records checks when they recommended surrogates to parents. (Scott Swanberg said he's not aware of such cases, but can only speak to his time as CEO.)
Having a surrogate fall through is bad enough for intended parents, but what happens next is arguably even worse. Such parents get put on the agency’s “rematch list”—known to insiders as “the graveyard.” If you’re on that list for more than 60 days, a person who’s been employed by CFC told me, “You’re probably not going to get a match.”
She says that almost 200 fully paid-up CFC clients were languishing there. Scott Swanberg puts it below 100, but did not provide an exact number. He says many on the rematch list are in fact successfully matched, and often CFC encourages people who aren’t successful to try their luck elsewhere, with a partial refund, but many insist on staying. For a few months in 2022, CFC did not take on any new clients at all, he said.
Because the intended parents on the rematch list have already paid their money—and will not bring in any additional money—they are not a priority, people who have worked there told me. (Scott Swanberg says that’s not his impression, though he can’t speak for what happened before his time.) When new surrogates are recruited, three people who have worked at CFC told me, they are typically first offered to the new clients—known internally as “money matches” or “money clients,” because finding surrogates for those people will lead to the payment of a new consulting fee. Why would CFC give a surrogate to a rematch client, one insider said, when they could make thousands of dollars from a money client?
Sometimes there were explicit instructions in group chat messages to employees to avoid helping people on the rematch list, like one that read, “Please do not make any more rematches…” and another that read, “We cannot afford rematches at the moment.”
Even when surrogates specifically request people on the rematch list, they are sometimes told those people are not available, even when that’s not true, says a person who has worked there. One rematch couple I spoke to was surprised to learn that their surrogate had initially been told they were taking a break, when in fact they were “desperate to reconnect with somebody.” (The couple did eventually have a child through CFC with that surrogate, after she said they were the only couple she wanted to work with.) Scott Swanberg said he found the idea that CFC lied about intended parents’ availability “very hard to believe.”
But the reality is there aren’t enough surrogates to match even to money clients. There are almost 200 potential money clients working with CFC, but these days only a handful of new surrogates a month, according to a person who has worked there. (Scott Swanberg: “We have enough surrogates coming in that would be a fit that I could offer. As far as I see, we’re offering surrogates to everyone that fit their parameters.” Despite multiple requests, he did not provide numbers.)
Three people who have worked there say that parents on the rematch list are often just shown profiles of women who are not actually available—they are in the process of being matched to other clients.
“They’ll get an email saying, ‘Hey, here are two great surrogates,’ and they’ll be like, ‘Oh my gosh, we would love this girl,’ not realizing that girl is never going to see their profile. She’s already been matched with money people,” one of them said. “She was never for them. The only reason that they sent her the profile is to keep them happy, keep them complacent.”
“Again, I can’t speak to the past,” says Scott Swanberg. “But we most certainly wouldn't do that now."
Trouble getting surrogates was not the only problem that would-be parents working with CFC told me about. There were transparency issues as well. Presumably because taking money for finding a surrogate remains legally dubious, agencies often pitch themselves not as matchmakers but as “consultants” who will guide parents through the surrogacy process.
As part of their consulting services, some agencies, CFC among them, manage the surrogate’s expense payments. Intended parents put money into an account and the agency reimburses the surrogate for her expenses from that account. The agency also promises to collect, organize and hold on to receipts that are needed to demonstrate that the law was followed. It’s an appealing service: it means the surrogate doesn’t have to chase down the intended parents for money owed, and the intended parents don’t have to micromanage expenses, keep on top of reimbursements, or master the complexities of Canadian law.
At least in theory.
Getting reimbursement right is important to many intended parents, because the way the Canadian law is written, if parents are seen to be “paying” a surrogate rather than just reimbursing her legitimate expenses, the parents, like anyone else, can be fined up to half a million dollars and imprisoned for up to a decade. This is especially important for Canadian intended parents, to whom the law clearly applies, but also for intended parents from countries that have their own laws about paying for surrogacy, such as the UK. For those looking to prove their legal parentage in such countries, not being able to prove that you did everything lawfully could cause problems when you try to bring your child home.
The problem is that while agencies are telling intended parents that expenses are in accordance with the law—only covering what the surrogate legitimately needed for the pregnancy—they seem to be simultaneously telling surrogates that they can come out ahead financially. Both can’t be true.
The altruistic model is supposed to make sure a surrogate neither profits from the arrangement nor is left out of pocket. But what has emerged in Canada is more of a “faux-altruistic” model, where the surrogate appears not to be profiting, but actually can profit, at least a bit.
From what I’ve seen, Canadian surrogacy works most smoothly when everyone understands the wink-wink nature of the arrangement—that agencies really are matchmakers, that parents sometimes pay what amounts to flat fees, that surrogates really are sometimes getting paid a small sum on top of real expenses. No one talks about it because it might not be legal. But because they don’t talk about it, sometimes not all the parties are in the know.
It was complaints over reimbursement transparency that drove Wayne and his husband to get in touch with me. Both originally from Taiwan, they were living in Hong Kong when they started working with CFC. In October 2016, they had matched with a woman from BC and paid CFC their full 11,250 CAD consulting fee. The men also paid CFC 1,250 CAD to manage their surrogate’s reimbursements. They wanted to do everything by the book both because they planned to raise their children in the UK, and to keep costs under control, since they were hoping to have a second child by surrogacy. They believed they would be billed for legitimate expenses only.
They had a good personal relationship with their surrogate. But they became concerned by some of what they were asked to pay for. When she was stuck in Vancouver because of wildfires, they were charged by CFC not only for her meals but her husband’s as well, even though Wayne was under the impression that her husband was there on his own business. They also felt that the cost of her gas seemed high, so the couple asked CFC for clarity.
When the men asked CFC to provide receipts, the agency said they couldn’t—the agency had too many clients to be doing that. But a staff member reassured the would-be dads that “CFC goes through your Surrogates [sic] receipts with a fine tooth comb to ensure that they are compliant with your agreement and the laws surrounding surrogacy in Canada.” They said the couple couldn’t see receipts until “the end of their surrogacy journey,” as per CFC policy.
Wayne and his husband were also finding that CFC’s communication was so poor that they ended up coordinating some of their surrogate’s travel and appointments on their own.
In early September 2017, they got on the phone with Leia Swanberg and some other staff members to discuss their disagreements. According to the two men, Swanberg hung up on them. She later told them that she’d just been cut off. “Leia, before you got ‘cut off’ you said you did not want to deal with us and goodbye!” they wrote in an email. (Leia Swanberg said she couldn’t comment on specific cases but that, because of the nature of the work, CFC deals with “a lot of passionate and emotional people and situations.”) Shortly after, the men asked to terminate their arrangement, get their money back and see their receipts.
Their surrogate had had one embryo transfer but had never been pregnant for them. CFC agreed to refund 30 percent of their fees. When the men reviewed the receipts, they found discrepancies. Some expenses had no receipts at all. For one week, 800 CAD had been charged for meals, but they say the agency had provided receipts that only added up to 260.68 CAD. Additionally, according to the couple, gas charges of 240 CAD were documented by only 161.41 CAD in receipts. A 140 CAD taxi charge was backed up only by an undated receipt for 100.80 CAD.
They said CFC had told them all expenses would be backed by receipts and if it was less than what they’d prepaid, the difference would be returned to them. “But as shown in the statement,” they wrote in an email, “we have never received any credit back in our account even when the total receipt amount is less than what we paid in advance.”
The next week they had a call with a staff member to discuss again. They followed up with an email, going over the lingering disagreements. “[I]t’s astonishing the excuses you guy [sic] can come up with to justify the mismatch between the receipts and reimbursements,” they wrote in an email after the call. Unused amounts from one expense category were applied to another in which the surrogate had overspent, for example. And suddenly the surrogate’s internet and telephone bill were an included expense, something they say hadn’t been discussed before. Wayne and his husband also felt stung by the suggestion that they should have been keeping closer track of their surrogate’s expenses as intended parents, when they felt that every time they’d tried they’d been stonewalled.
“We sure hope if you do get sued [sic] again you will be at least be [sic] more consistent in what you say in court,” they wrote in an email.
That’s when they felt Swanberg’s actions turned threatening: “I would ask that you provide us with your lawyers [sic] name, if you have one, as I take your threats, and comments you have made to other industry partners as slander and liable [sic],” she wrote in an email. “If you don’t have a lawyer, we will have the court documents sent to your place of employment.”
The men said they’d welcome the transparency.
Swanberg told them to cease contact with her staff.
In their last email to CFC, the men responded, “Feel free to block our email account as the next communication will be from our lawyer or from the relevant government agencies.”
Wayne and his husband could be forgiven for assuming that behind Canada’s tough law was an apparatus to enforce it. But there isn’t really one.
For about six years, between 2006 and 2012, Canada had a body called Assisted Human Reproduction Canada (AHRC), which reported to the federal minister of health. It was supposed to have the power to, among other things, designate inspectors for the enforcement of the law. But it was perhaps better known for dysfunction and a lack of enforcement. In any case, before AHRC really got up and running, it was disbanded with an omnibus budget bill, following a Supreme Court ruling that found that parts of the federal law were stepping on provincial toes. The business of enforcing what remained of the law then fell to Health Canada, the country’s federal ministry of health.
I got a glimpse into just how Health Canada does this—or rather, fails to do it—after I heard from Dave Ross, yet another disgruntled CFC client. He and his husband lived in Texas but had decided to pursue surrogacy in Canada in part because Ross himself was Canadian. Through CFC, the couple was introduced to a Canadian woman who agreed to act as their surrogate. (A first match dropped out.)
The signed agreement between the parents and the surrogate placed a 35,000 CAD cap on the surrogate’s expenses, according to Ross. The arrangement was that the couple would deposit a monthly amount of 3,450 CAD into an account to cover these expenses, and, as they remember being told, the surrogate would be required to submit expense reports to CFC. The men understood it to be a maximum amount allowable, but that what wasn’t used would just stay in the account, and be returned to them eventually, after the surrogacy was finished.
But right away the two would-be dads noticed something strange: every month the full amount of 3,450 CAD was being disbursed from their account. “A perfect, round-dollar amount, every single month,” Ross told me. “How is that possible?”
Ross was aware that he could be charged with a criminal offence if it turned out he was actually paying the surrogate, rather than just reimbursing her legitimate expenses. The men had a close relationship with their surrogate and didn’t want to compromise it with discussions about money. According to Ross, he asked CFC for a complete and transparent accounting of the expenses their surrogate had incurred, and three separate staff members told him it was company policy not to provide this information. One staff member declined to explain why, Ross says, but suggested Ross ask his lawyer.
“That just blew my mind,” says Ross. “‘Ask your lawyer why we will not release the details to you.’ Are you serious?”
He escalated his demand to Scott Swanberg, who was at the time only CEO of the egg donor side of the company, Egg Helpers. Ross and his husband had used Egg Helpers to arrange their egg donor, and, although Ross had had to ask a few times, he says, he got an accounting of the egg donor’s expenses. (As with surrogates, egg donors in Canada can only be reimbursed for expenses, not paid.) According to Ross, Scott promised him that those same sorts of details would be provided regarding the surrogate, and he assigned a specific staff member to do it. But it didn’t happen. “I think I got one copy for one month,” recalls Ross. When Ross continued to press Scott, he simply stopped responding to emails or phone calls. (Scott Swanberg did not respond to requests for comment on these specific allegations.)
Scott Swanberg says it was his impression that receipts were available to intended parents during ongoing surrogacies. He said there was no way the full capped expenses were being paid out automatically: “No, no, that, for sure, wouldn’t be the case.”
After their son was born in 2019, Ross was still feeling uneasy. He knew what had happened wasn’t right, and he didn’t want any other family to go through it. So he decided to contact Health Canada. After three months and six follow-up emails, his request finally landed with Health Canada’s Regulatory Operations and Enforcement Branch. He emailed the branch an official complaint. He outlined his experience and then wrote: “I believe CFC is operating outside the regulatory requirements of the Assisted Human Reproduction Act, and fails to provide clear accountability to it’s [sic] clients, so that they can also ensure that monies they provide to their surrogates meet the requirements of the Act.”
A few days later, in November 2019, someone at the branch interviewed him by phone. Ross was hopeful that this might lead to some action, and in February 2020 he learned his complaint would be passed on to the RCMP. In June 2020, Ross followed up.
The RCMP inspector assigned to his file replied soon after. In an email to Ross, the inspector said that a file had been opened, some investigating had been done in Ontario and BC, but that the RCMP was not in a position to further the investigation. Regulations stipulating more clearly what could and could not be expensed by a surrogate had become law just weeks before this email exchange. The officer explained that before the new regulations had come into force on June 9, 2020, “there was no clear direction on what was and was not acceptable.” Ross’s file was closed, the inspector said, but could be “re-opened if the need arises.”
In other words: No one will be looking into this. At least not for now.
But according to people who have worked at CFC, maybe someone should be looking into it.
A surrogate is allowed by law, for instance, to expense the cost of additional groceries required for a healthy pregnancy—regulations cite the need for greater caloric intake while pregnant. The people who drew up the regulations might have imagined fresh vegetables, organic fruits, dairy alternatives, or just some extra food. But it’s not uncommon, a person who has been employed at CFC told me, for surrogates to claim over a thousand dollars of pregnancy-related groceries every month. “Some people were maxing out their monthlies of $2,000, just on groceries,” she said. (Scott Swanberg said all reimbursable expenses are approved before being reimbursed.)
Another strategy, I was told, is to use handwritten receipts for home services. Not all services come with formal receipts, and regulations deliberately don’t specify a format needed for reimbursements. That means surrogates can generate their own. Maybe a surrogate hires a local teenager to babysit while she attends a medical appointment, the reasoning goes, or someone to shovel snow because a doctor has told her she needs to be on bedrest. But surrogates are coached on how to exploit that option, says a person who has been employed at CFC. (Scott Swanberg says it would be more accurate to say surrogates are “educated.” They deserve to know what they can legally expense for, he says, and CFC helps with webinars and videos and the like.)
Cat litter is a favourite, I was told. Pregnant people are not supposed to change cat litter because of toxoplasmosis, an infection caused by a parasite found in cat feces; the risk of preterm birth or miscarriage is small but serious. “You can pay your child to do that,” the person told me. “All you have to do is write a handwritten receipt and get someone else—not yourself—to sign it.” There’s no firm cap on how much that service can cost, as long as it’s “reasonable.” Some women write receipts for generous payments to their young children for their cat-box help, she said.
Scott Swanberg countered that outsourcing litter box cleaning is driven mainly by intended parents, who don’t want their surrogate anywhere near it. CFC doesn’t want family and friends who help to have to do so on their own dime.
“Meal prep” is another one, said the person who’s worked at the agency, and it’s in addition to groceries. “If your friend, quote unquote, is coming to your house to make you dinner with the groceries that you’ve already purchased, that could be $200 a week,” the person told me. A surrogate just needs to write a receipt. Surrogates also routinely employ their older children to babysit their younger ones, she says—sometimes for as much as $40 an hour, depending on the rate caps that can be set in the agreements drafted by the fertility lawyers.
In these sorts of ways, the agency staff advises surrogates on how to expense more—to reach their capped maximum every month, says a person who’s worked there. “The [former] CEO [would] ask to be told about surrogates who are not meeting their maximum so that she can reach out to them and have a conversation,” a person who has worked there said.
And it can go beyond coaching. People who’ve worked at CFC told me that some receipts may have been “edited” to inflate costs to parents. Two people who have worked there said that employees were instructed to open up travel receipts in Adobe Pro, and alter the amount charged for things like hotels and flights. Employees added small amounts—usually between $10 and $35—to all the items, carefully adjusting the taxes owed, said one person who had worked there and had done this herself. These added fees, known internally as “travel fees,” the people who’ve worked there said, were not disclosed to parents.
Scott Swanberg said he couldn’t see that happening. “That doesn’t make any sense. That would be so much work. I don’t see the point,” he said. “As far as I know, that’s never happened.” Leia Swanberg declined to comment.
There was something else in the RCMP’s response shared by Ross that was intriguing. It was about the formal relationship between Health Canada, which had received and forwarded Ross’s complaint, and the RCMP, which was presumably responsible for acting on it. Often government departments that share responsibilities will draw up a statement of shared intent, called a “memorandum of understanding” or MOU. The erstwhile agency, AHRC, for instance, had had one with the RCMP, according to their 2007-8 annual report.
But now, according to the email, there seemed to be only one MOU between Health Canada and the RCMP, and it was about counterfeit drugs. That didn’t mean the RCMP would never investigate offences under the AHRA, but, the officer pointed out, there was “not a pre-established agreement in place.” He then went on to talk about “financial cutbacks,” “limited manpower” and how wrongdoing in the realm of assisted reproduction “does not touch on one of our current scope of service elements or priorities.”
I filed an access to information request with Health Canada and they confirmed they do not have any record of an MOU with the RCMP to enforce the human reproduction law. Had Health Canada just passed the buck on Ross’s complaint, knowing it would go nowhere? Is our tough assisted reproduction law, with its strict prohibitions and threats of 10-year prison terms and 500,000 CAD fines mostly just…bluster?
I shared the RCMP email with Alana Cattapan, Canada Research Chair in the politics of reproduction and assistant professor at the University of Waterloo. “If there is a crime occurring in Canada that is reported to the RCMP and is in their jurisdiction, they should be investigating,” she replied in an email. “If their response to a citizen who reports potential criminal activity under the AHRA is that they cannot and will not help, they are effectively articulating that it is open season on the Act.”
In June 2020, Ross filed two access to information requests of his own, one with Health Canada and one with the RCMP. He wanted to find out more about the “investigation” carried out on his behalf. Federal agencies are supposed to reply within 30 days, but Health Canada notified him that they needed a 240-day extension. He recalls the RCMP got back to him in October that year with a few follow-up questions, which he answered the same day. And that was it. As of July 2023, Ross has still not heard back from either.
Demand for Canadian surrogacy has intensified in recent years, according to people in the industry. More people around the world are choosing surrogacy as an option, but there’s only a handful of places where it’s legal, and fewer still that allow it for people coming in from other countries. After India, Thailand, Nepal and others closed their doors to international clients, and the war in Ukraine dampened business there, people in the industry say more and more people have been turning to Canada.
But surrogacy in Canada is a tough business—it depends on recruiting women, who by law can’t be paid, to carry children for other people. It seems fewer women are interested in doing it now than previously. According to Rhoads-Heinrich, owner of Surrogacy in Canada Online, this past year has been one of the worst ever for recruitment in her company’s more-than-20-year history.
She thought it might have something to do with the increased cost of living. “But traditionally, you know, when things were tough, we usually saw more surrogates,” she said. Early in the pandemic, she even saw a noticeable uptick in surrogates.
But not now. She estimates there are about 100 intended parents—international and domestic—for every one available surrogate in Canada. “I think a lot of companies don’t want to say anything, because they don’t want to scare away clients,” she told me.
It was against that backdrop that on May 1, 2023, CFC employees got an alarming message. “As many of you know, since December, we have really been struggling to break even, and therefore we have been burning through any and all funds available to us,” wrote Leia Swanberg to her then staff. “Unfortunately, unless we can make three new matches (w three new surrogates) I will have to take a personal loan to make payroll.” The message went on to say that employees might not get paid that week.
Swanberg had made comments like that before—about struggling to keep the lights on and having to hustle to meet monthly targets—but some people felt this time might be different. A few employees departed.
Ten days later, Swanberg sent out another message, apologizing and walking back the idea that the company was in trouble. “CFC is operationally and financially strong,” she wrote this time. In fact, she wrote, everyone would be getting a raise.
That night, yet another message circulated, this time from Scott Swanberg. In it, he said that Leia was “no longer working with the business,” and that he, Scott, would take the reins.
No one knew quite what to make of any of this. Was she gone for good or had she just “taken leave,” as she’d indicated in a post on her LinkedIn account? Was the company in serious trouble? What would happen to all of the intended parents who had already paid for their services?
Employees began to talk. Many shared that they were unhappy with the way they had been treated by Leia Swanberg. They also confided that they were uncomfortable with some of the things they were being asked to do. When Scott Swanberg convened a virtual town hall meeting a few days later, several employees made it clear how distressed they were, and some even said they would quit if Leia Swanberg came back.
“It’s very upsetting to see intended parents treated badly, or to have their emails ignored, or to be waiting for a year or two, and never actually find a surrogate because they’re never introduced,” one person who has worked there said. Another person told me that some employees are doing everything they can to get some “of the longest, most heartbreaking rematches off the list as fast as they can.”
Almost a decade has passed since I got that first email from a frustrated CFC client. Over the years, new people kept getting in touch. Several offered to go public—they didn’t want anyone else to go through what they had—but even people who didn’t want their names used sometimes spoke to me at length. Many people have shared private documents and answered numerous finicky follow-up questions. Some have stayed in contact for years. They feel strongly that something is wrong in our system that needs to be put right.
All the people who contacted me about problems with an agency contacted me about CFC. That’s not to say other agencies don’t have issues, too—they do. Several have long wait-lists and lots of broken matches. Some decline to release receipts until the end. One recently tried to unilaterally change the terms of their contract with intended parents, which led to an uproar. Some have simply gone under. CFC claims to be the largest Canadian agency, so it’s perhaps no surprise that it seems to get the most complaints.
What many people both inside and outside the industry want is to have surrogacy operate in a way that feels above-board. Surrogacy is legal in Canada. Why does it feel so sketchy?
Central to the disquiet is a question the government seems unwilling to answer: Are agencies legal or not legal? Can they take money to match surrogates to clients or not? If they’re not legal, why have there been no convictions of agencies for arranging the services of a surrogate mother? If they are, why not revise the law to make that clear?
For her PhD, Alicia Czarnowski is interviewing Canada-based agencies that in some way facilitate matching for domestic surrogacy arrangements. She wants to understand how agencies view their role and their value, what challenges they face, and how they think the law is affecting their work. She is also part of a group of research teams, alongside Cattapan and other expert academics, investigating the experiences of Canadian surrogates and intended parents, including what it’s like to work with agencies. The hope is that these projects, in combination, will provide some of the evidence needed to make recommendations on how to reform the law.
Says Cattapan: “It was always the intention of the people who designed this legislation to have it reconsidered every few years.” Lawmakers recognized that assisted reproduction was an important and fast-changing area of public policy—and that our understanding of it might change. It has. But the section of the law explicitly requiring it to be fully reviewed was practically ignored for all of the law’s first eight years; then, in 2012, it was simply eliminated.
One of the only major updates to the law came into force in June 2020. Almost 16 long years after it had initially passed, new federal legislation finally specified what could and could not be considered legally reimbursable expenses. A lot of officials used the absence of these regulations as an excuse for inaction. For years, they fobbed off people who complained, saying nothing could be done without regulations, and everything would be put right once we had them.
I was happy to see them, but skeptical that they would change much. Regulations alone—without transparency and accountability and enforcement—were unlikely to be effective. So I was not surprised when a parent contacted me in June 2022 to share the same old stories I’d been hearing for years. An agency, again CFC, seemed to be paying the surrogate a fixed amount, he said. Expenses didn’t seem to correspond to the contract. There were harsh words, threats, loss of trust. Had I heard anything about this sort of thing? He decided in the end not to go on the record, but it confirmed my suspicion that little had changed post-regulation, let alone post-conviction.
In April this year, yet another parent got in touch. He loved the Globe article, he said, but did I realize…? His name was Jonathan Carroll, an American, and he and his husband had a baby in December 2022, after what he described in his introductory email as a “5-year nightmare.”
He later told me about how CFC asked them to “loan” their second surrogate $2,000 after she had a miscarriage, money they never got back after she decided not to continue. (A person who has worked there said loans like this are not uncommon. Scott Swanberg said he’d never heard of a situation like that.)
Carroll described how he and his husband had to find their own surrogate in the end, via Facebook, and that she offered to be truly altruistic, only charging for the most basic expenses. The men continued to use CFC to manage her expenses, however, and this became a problem for them. Even though they had more than 7,000 CAD sitting unused in their account, CFC repeatedly pressured them to add an extra 20,000 CAD, minimum, Carroll said. “[I]t is imperative that we collect all estimated amounts prior to your surrogate giving birth so that the funds are available if and when needed,” CFC wrote in an email about a week before the birth. The men were in regular contact with the surrogate and she’d said she didn’t need it, so they refused. “They called us and would scream at us and they’d leave voice messages,” said Carroll.
Sure, they had a “happy ending.” Everyone I spoke to for this article did eventually get there. Carroll, Johnson, Ross, and the rematch couple all had children as a result of working with CFC.
Flynn and Imai worked with a small (now shuttered) Canadian agency called West Coast Surrogacy Connections and welcomed twins in 2020. (They also ended up getting their CFC agency fee refunded—almost five years after their initial request to CFC to get their money back. Just 18 days after Flynn lodged a complaint with the Better Business Bureau, CFC confirmed they’d be repaid.)
Smith and her husband had their child in 2019 with the help of a different Canadian agency.
After cutting ties with CFC, Wayne and his husband went on to try, unsuccessfully, with two other Canadian agencies, Surrogacy in Canada Online, and another that they are not able to name because they signed a non-disclosure agreement to get their money back. In the end, the couple pursued surrogacy in the US, and had a daughter in 2020 and another in 2022.
The Stathopouloses also ditched Canada. In late 2019, they flew their embryos out of the country and did surrogacy in Greece instead. Their second child was born there in 2021 and their third in 2022.
But some parents feel battered and abused, not just by agencies, but by Canadian authorities as well. We allow this industry to operate. We allow it to take money and offer services. When things go wrong, who can people turn to?
Like Ross, Nick Stathopoulos made a formal complaint to Health Canada about his experience. “I said, ‘No, this is not on. This is just plain wrong.’” True to form, Health Canada referred his case to the RCMP. He heard back a couple of months later. “And they basically said, ‘There’s nothing we can do… It’s out of our jurisdiction. You need to go visit your local police.’ And I thought, ‘Really? I’m going to walk into a police station in Melbourne to make a complaint about some lady in Canada that has stitched me up?’” He didn’t bother. But it bugged him.
Many intended parents wonder how this could have gone on so long. Some wonder if they’re the only ones who see what’s happening. Most Canadians, to be fair, don’t seem to have any inkling about their country’s treacherous surrogacy situation. And industry insiders have nothing to gain by blowing the whistle. Parents through surrogacy are typically too frightened and exhausted to call anyone out. Smith put it nicely: “You’re in the process of trying to have a baby and you don’t want to piss anybody off… And then once you do have your baby, you know, you’re dealing with a brand new baby. You’re tired. And you’re just like, ‘Thank God, that nightmare is over. I just want to never think about it again.’”