Assessing the Liberal Government’s Plan for 10-dollar-a-day Childcare

By: Lisa Alers-Hankey

This summer, the federal government pledged to cut family childcare costs in half by the end of 2022 and create 10-dollar-a-day childcare by the end of 2026. Eight out of ten provinces have signed on to the deal. However, infant childcare in Toronto currently costs over twenty-two thousand dollars a year per child. Despite this astronomical cost, prior calls for affordable and universal childcare have largely been unmet. The Ontario government should sign on to the federal government’s proposal and look at Quebec to understand the benefits of universal, affordable childcare. 

Many families struggle to afford paid childcare. Often these financial constraints lead to mothers staying home or patch-working childcare support from family and friends. As a result, mothers who take time off work to care for young children face higher rates of persistent underemployment, even after children enter the school system. Additionally, they experience lower wages compared to women who did not take time off. These indicators lead Canada to be ranked last amongst industrialized nations on childcare by the OECD and UNICEF.

In Canada, with the notable expectation of Quebec, childcare is expensive and lacks sufficient capacity to be a reality for most families. Access to affordable, high-quality childcare is important for child developmental outcomes and for addressing equity concerns for women and new parents. In addition, women disproportionately face ‘penalties’ for having children. When childcare options are expensive or low-quality, women are less likely to re-enter the workforce after having a child.

The benefits of early childcare on development and educational outcomes for children are well documented and understood. Nonetheless, the problem of getting from where we are today to a widely accessible and affordable childcare program is not cut and dry. In economic terms, the government could facilitate demand- or supply-side shifts to increase childcare access for families. Still, not all options are equitable. Demand-side policies increase the number of families who can afford childcare. However, studies have shown that simply increasing the demand either does not increase the supply or results in an influx of low-quality centres. Alternatively, the government could increase the supply of childcare by increasing the number and quality of centres.

The Conservative Party has suggested increasing the Canadian Childcare Benefit (CCB) as an alternative to a public and universal childcare program. As the costs of raising children continue to rise, proportionately increasing the CCB has its merits; however, analysis of their proposal reveals the plan will not produce blanket increases to the demand and supply of childcare as the Liberal/NDP plans. Increases in the tax benefit only encourage families already on the cusp of affording childcare to enrol their children. Families in the lowest income brackets would remain financially unable to pay for childcare services, making this policy not robust enough to effectively address the disproportionate burden on women with children.

The federal government’s plan focuses on increasing the supply of childcare services while promising to maintain quality at an affordable cost. By 2026, the government pledges to have high-quality spaces for all children for just ten dollars a day. This plan closely mirrors the Quebec childcare plan that has been in place for more than twenty years.

Both Quebec’s plan and the proposed federal plan are expensive. In 2013, Quebec’s 7- to 20-dollar-a-day plan cost the provincial government $1,232 million, and while the government runs a deficit, every dollar must be justified. However, learning from the Quebec plan can help justify these costs. Increases in government revenues attributable to the childcare program for the federal and provincial governments were $1,478 million and $673 million, respectively. The program can pay for itself because of increases in labour force participation rates of mothers. Nonetheless, in the short-term, the government will have to swallow the financial costs of starting the program. Despite this, the short- and long-term social benefits make the program worthwhile.

Moreover, fertility rates in Quebec have risen compared to other provinces, indicating that having access to affordable childcare allows women to feel more comfortable and see less risk in having larger families. In other terms, women feel more empowered to make choices about their bodies and families. Studies have shown an equalization of educational opportunity between children from high-income and low-income families up to the sixth grade. For a country committed to equity and inclusion, this is crucial.

This is not to say that Quebec’s program is perfect, but that the seemingly lofty goal of this government will pay dividends if executed carefully. For example, Quebec still has quality issues in private, for-profit childcare centres and connecting low-income families to childcare networks. The federal government must learn from Quebec’s pitfalls while crafting its policy. A 10-dollar-a-day childcare system modelled after Quebec’s program could cut the cost for infant childcare in Toronto, where it is most expensive, by 88 percent. This would also increase government revenues and provide higher quality care to a larger segment of the population. Critically, universal childcare also benefits women by reducing implicit penalties for having children. Whereas alternative plans of improving to tax credits, while important for meeting rising general costs of raising children, miss the needs of high quality and affordable childcare for women and new parents.

Lisa Alers-Hankey is a Master of Public Policy candidate at the University of Toronto’s Munk School of Global Affairs and Public Policy with a collaborative specialization with the School of the Environment. Her interests include climate change, environmental and economic policy. Lisa is interested in making public policy development and implementation accessible and reflective of communities. She holds an Honours Bachelor of Arts in Public Policy and Ethics, Society, and Law from the University of Toronto.

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