Early Childcare Education and the Benefit Redistibution Debate

Tara Sackett

In recent weeks, a lively social policy debate has emerged front and centre in the Canadian media as the Conservative and New Democratic parties advocate for polar-opposite childcare options for families with young children. The Conservative platform trumpets “choice” with the $100/month Universal Childcare Benefit, although its recently introduced income splitting policy is argued to be most beneficial for high-income families. In sharp contrast, the NDP has outlined a universal federal program that would charge families $15/day for access to public childcare.

Proposals to change the status quo when it comes to childcare policy in Canada face a considerable challenge: that public early childhood education (ECE) is constitutionally a provincial responsibility. The policy frameworks governing ECE programs across the provinces and territories are each based on unique visions and assessments of the evidence, and come with very different price tags.

Ontario and Quebec are cases in point: while Ontario has a targeted program which subsidizes daycare based on family income, Quebec has the only universal child care program in North America.

In Ontario, subsidization of childcare is targeted to low-income families, and fee subsidies are calculated based on net income (adjusted for the Universal Child Care Benefit). For example: a family with an adjusted income of less than $20,000 will pay nothing for childcare; a family with an income of $40,000 will pay $167/month; and a family with an income of $80,000 will pay $1167 a month. For curious readers, here is an online applet that presents the fee subsidy algorithm and allows parents to calculate what they would pay.

Research has shown that there are considerable benefits to providing quality ECE for children with vulnerabilities in domains such as physical well-being, language and cognitive development, emotional maturity, and social competence. American studies that focus specifically on low-income children, a particularly vulnerable population (such as the Perry Preschool Study), have shown that quality early childhood care improves school performance and high school graduation rates; leads to higher incomes later in life; and reduces encounters with the criminal justice system. There is less evidence that ECE programs result in improved outcomes for less vulnerable children – thus supporting the argument that government resources for childcare are best spent by targeting low-income families.

However, developmental vulnerabilities in children are not limited to families with lower socio-economic status. While there is plenty of research linking poverty to cognitive and developmental vulnerabilities in children, other research has maintained that children across the socio-economic spectrum exhibit vulnerabilities. One recent report from British Columbia suggests that the highest numbers of children with vulnerabilities are actually found in middle-class neighbourhoods.

On the other hand, a universal childcare program guarantees that all families have access to quality childcare regardless of socio-economic status. Quebec’s model was introduced in 1997 with a user fee of $5 per day, a cost which has risen marginally to $7.35. Over time, Quebec’s universal program has been associated with increased use of public daycares, increased maternal labour, and increased fertility.

Critics of universal childcare programs argue that higher income families do not need government subsidies to access quality childcare, and that such programs come at too great of a cost to the public purse. In 2011, Quebec had 440,000 children under the age of 4 and spent $2.2 billion on its childcare program; Ontario, with 704,000 children under 4, spent $974 million on operating expenses for childcare in 2013. The Quebec government has since proposed to implement a sliding scale fee schedule for daycare, although increased daily rates would still be far less expensive than those faced in other provinces.

Both policy frameworks, regardless of vision, now face significant implementation problems. Ontario’s targeted approach has been plagued by long wait lists; in the City of Toronto alone, 17,000 children are on the waiting list for a childcare subsidy. In Quebec, studies have shown that families using public childcare as a result of the universal program incur negative effects on child behaviour and health, and increases in maternal depression — arguably a reflection on the quality of programming.

One of the major challenges to developing effective frameworks for childcare policy in Canada is being able to balance the current costs with an understanding of long-term returns on investment. Estimates on the social return on investment of ECE for vulnerable children range from $3 to $12 for each $1 invested. However, policy-makers should be cautious when extrapolating this data into a Canadian context due to differences in public education, social welfare benefits, and the criminal justice system.

Despite the lack of a long-term cost-benefit analysis, it is clear that redistributing government funds to subsidize public childcare has both private and public benefits. Targeted and universal policy frameworks, such as those developed in Ontario and Quebec, respectively, are at their core based on different philosophies of the obligations of government.

Regardless of the model, there is a need for effective and financially-sustainable policies that create affordable childcare options to facilitate the return of parents – primarily mothers – to the workforce, and to provide easier access to quality ECE for all families. The 2015 election may bring a tectonic shift in the federal government’s contributions to early childhood education, or it may remain the status quo, with some cash in hand from the Conservative government.

Tara Sackett is a 2016 Master of Public Policy candidate at the University of Toronto’s School of Public Policy and Governance. She previously obtained a PhD in Natural Resources Science from McGill University in 2007, and prior to attending SPPG worked as a researcher exploring how aspects of global change affect ecosystem processes. Her main areas of policy interests include climate, energy, and environmental policy.

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One response to “Early Childcare Education and the Benefit Redistibution Debate

  1. It’s very correct to state that child vulnerability isn’t solely linked to socioeconomic status. Although it has an enormous impact, Heckman’s later studies decomposing the Perry effect show that 30-40% of the difference in result on achievement tests were due to personality skills, and not strictly IQ (http://www.umass.edu/preferen/You%20Must%20Read%20This/HeckmanAER2013.pdf). Socialization and emotional skills play the active role in the economic result of Early Childhood Education. Children from good socioeconomic homes can have poor outcomes if they have very poor socialization or emotional upbringing. Qualified Early Childhood Educators have an enormous impact on the whole range of vulnerable children by directing the growth of their emotional and problem-solving mechanisms. As the future of child-care programs in the country is debated, the wages and status of the workforce needs to be factored in to any economic calculation. Especially now that the cost of fees is creeping into the national consciousness. The Canadian Center for Policy Alternatives recently floated some options for reducing fees, including the lessening of ECE education, and the reduction of their wages – a shockingly short-sighted view from that organization. Especially considering that ECE wages are well below the average for all occupations. Stating that affordability needs to be a factor in any child care calculation isn’t taking into account the reality that all Canadians will always gravitate to lower fees, and in a sector in which 80-90% of the cost of ECE is the wages of the staff this is the critical difference between having a type of care that will have a true economic value, and the type of care that will have a stunted value. The question needs to be expanded to: do we want national child development from experienced educators to benefit a subsequent generation; or do we simply want day care to keep children from dying while workers work.

    If we want the former, then any policy calculation needs to incorporate the fact that all party budget platforms are WAY off what it needs to be to generate the Perry preschool-level results. The Conservative platform is a joke designed to gut the idea of national child care, but the NDP plan is far from perfect. Perry preschool involved quality educators with specialized education, and lots of support. Scaling that model up without preserving those things means a significant decline in ROI. Quebec may have spent 2.2 Billion on child care, but according to recent wage scale data a starting ECE in Quebec with a bachelor education makes not much more than a starting cafeteria worker – aprx. 25000$ a year.

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