Does Canada really need a national child-care program?

The time is ripe to implement a national daycare system in Canada, according to Bank of Canada governor Stephen Poloz, citing Quebec as a positive reason for such a change. Parents there pay $7.75 to $21.20 per day for child care.

“The provincial government identified barriers keeping women out of the workforce and acted to reduce them, particularly by lowering the cost of child care and extending parental leave provisions. Within a few years, proportionately more prime-age Quebec women had jobs than women in the rest of Canada,” said Poloz in a March 13 speech at Queen’s University in Kingston, Ont.

In 1997, when Quebec first implemented its daycare plan, the labour force participation rate for women was 74 per cent. Today, it is 87 per cent, he said.

“If we could simply bring the participation rate of prime-age women in the rest of Canada up to the level in Quebec, we could add almost 300,000 people to our country’s workforce.”

But is the country ready for a full-fledged national system?

The research is pretty clear that when there is available, high-quality child care and it’s affordable for working parents, three major things happen, said Nora Spinks, CEO of the Vanier Institute of the Family in Ottawa.

“One, women are more likely to be attached to the paid labour force, more full-time and more securely attached; and second, the family stress is lower, the financial stress is lower, so families are able to manage their multiple responsibilities at home and work more effectively; and third, it’s good for kids.”

The investment in daycare could also bring economic benefits to Canada, according to Hassan Yussuff, president of the Canadian Labour Congress (CLC) in Ottawa.

“The Quebec system has proven, time and time again, studies have concluded it’s a huge benefit not only for women but also for the families, also the economy in terms of spending: Every dollar that government puts into a child-care program, they get back sometimes two-and-a-half times, three times more at the end of the day,” he said.

“It allows women to fully participate in the economy, which has been identified as a major barrier and, of course, more importantly, it’s also about getting the kids into early learning at an early age (instead of) having to rely simply on this patchwork that we have across the country (with) everybody trying to make ends meet and trying to figure out whether or not they can take care of their kids properly.”

‘Optimistic analysis’

But the governor’s comments stem from a “very optimistic analysis” of the benefits, said Charles Lammam, director of fiscal studies at the Fraser Institute in Vancouver. “It is relying on a study that is really inflating the benefits of the program and understating the costs.”

“You must account for those other policy changes in order to have an accurate sense of what subsidized daycare will do to the labour market,” he said, pointing to an analysis done by Pierre Fortin, emeritus professor of economics at the Université du Québec à Montréal, as the basis for Poloz’s viewpoint.

“We really need to have a better sense of what the problem is, and it’s not really clear that there is this massive widespread issue across the country. And to the extent that we can draw from Quebec, we need to understand what other policy change happened during the period and have a better and more complete view of what the policy actually accomplished, which is much less than what Mr. Poloz is suggesting,” said Lammam.

The Universal Child Care Benefit (UCCB) — implemented in 2006 by former prime minister Stephen Harper’s government to provide monthly payments to parents — is a much more effective way to help low-income parents better afford child care, he said.

“A model that puts the decisions and choices to parents, I think, is a much stronger model than one that relies on a very institutionalized, one-size-fits-all system,” said Lammam. “(Quebec) hasn’t solved the access problem — some families, particularly lower-income families, have a harder time getting into those facilities.”

“The Quebec experience really should make us cautious in other provinces and certainly nationally about these one-size-fits-all models.”

Feds earmark $7 billion

In 2017, the federal government earmarked $7 billion, spread out over 10 years, for provincial governments to implement their own programs. Alberta announced a $25-per-day pilot program, the British Columbia government promised a $10-per-day childcare program, and Ontario vowed to deliver 100,000 new daycare spaces by 2022.

Ontario has already implemented a limited form of daycare by offering full-day kindergarten, said Spinks.

“They’ve attached it to the school system by introducing full-day junior kindergarten, with before- and after-school programming available.”

But the funds have to come from the deeper pockets of the federal government if they are going to make a difference, said Yussuff.

“Almost every province has taken that money trying to figure out how to best use it to ensure they can start to build some kind of system within their provinces,” he said. “What the federal government has rolled out in terms of their funding is a good start, but you’ve got to do more and you’ve got to work with the provinces (on) how we can make this a national system.”

But can Canada afford to fund such a scheme?

“Affordability is always a loaded question because when we choose to make an investment in the lives of young children, we know there are significant social and economic gains both immediately and in the mid- and long-term,” said Spinks.

“This country made a commitment decades ago, centuries ago, to invest public resources for public good in education; what we’re talking about here is dropping the age at which that investment will begin.”

More data and study is needed before committing more funds to child care, said Lammam.

“We’ve relied mostly on anecdotes to guide us on this and I think that’s the wrong way to approach that. We need to be more careful and evidence-based in understanding: What is the problem?” he said.

“We need to focus on the data before we get into any conclusion to policy recommendations.”

For example, there was no shortage of available daycare spaces in B.C. in 2017, according to a report from Cardus, a think tank with an office in Vancouver that used government data to assess how many spaces were available.

“Quite surprisingly, the researchers found that there was about a 30 per cent vacancy rate. So, contrary to this notion that there is this widespread problem, they found that there’s actually a significant amount of spots available in the province. And even in some parts of the province where there’s more density and more demand for daycare services, they still found vacancy rates, even for high-demand age ranges, like toddlers,” said Lammam.

“If we don’t have a massive shortage of daycare spaces, it really doesn’t warrant very significant public policy intervention.”

‘Perfect storm’ brewing

But there is a perfect storm brewing, said Spinks.

“The aging workforce… is going to result in a need for recruiting young workers. The older workers, the baby boomers who are heading into retirement or nearing the end of their careers, are the grandparents of today and they’re going to want supports and assistance for their grandchildren. Whether that’s grandparent  leave or whether that’s high-quality, early learning and child care, we’re going to see, in this perfect storm, political interest in early learning and child care,” she said.

“Those boomer grandparents that want the best for their grandchildren and are prepared to ask for and advocate for it, both in the workplace and in the community, is a force that we haven’t had before.”