A daycare caution

The Ontario government should not follow Quebec’s example by subsidizing daycares instead of helping parents directly through vouchers or tax credits.

Ontario wants to implement a universal childcare program, inspired in part by Quebec’s subsidized daycare system. It’s a noble undertaking, especially since Ontario parents pay a high price to put their little ones in daycare. However,

For starters, it’s good that the Ontario government wants to offer subsidies to low- and middle-income individuals by making an initial $1.6-billion investment to create 45,000 subsidized spaces. For the sake of providing universal childcare, Quebec rolled out a $5-a-day program in 1997-1998. But the low rate created such high demand, including from well-off parents, that the system is plagued by waiting lists that are several years long. A 2009 study by the Institut de la Statistique du Québec showed that the system was clearly benefiting the wealthy: 42.3% of families with household income less than $20,000 did not put their children in these daycares, compared with only 13.5% of families with income higher than $140,000.

In 2015, the Quebec government replaced the flat fee with a sliding-scale system based on parents’ income to ensure the program’s sustainability. Currently, a couple with an annual household income of $100,000 pays around $12 a day per child.

The Ontario government should not make the mistake that Quebec did by subsidizing daycares, such as the Centres de la petite enfance (CPE), instead of helping parents directly through vouchers or tax credits.

The idea was to proactively control the number of subsidized spaces. Instead, the program’s annual costs have risen almost eightfold since it was launched, while the number of spaces has not even tripled. Even if you adjust for inflation, the cost per child has more than doubled. The increase is due in large part to the unionization of CPE employees and home daycare providers, who are considered self-employed for tax purposes, however (what’s wrong with this picture?).

A program intended for parents has turned into an employment program for educators and civil servants. And there’s no going back. Otherwise, the unions will march in the streets, taking hostage parents who feel obligated to support them because who else will take care of their children?

Did subsidized childcare trigger a baby boom in Quebec? The birth rate grew as much, if not more, in Alberta and Saskatchewan during this period, without subsidized childcare.

As for the labour-market participation rate for women, it has been growing across Canada for years, including in provinces that do not have subsidized childcare. In any case, giving the money directly to parents would generate the same results, even if they put their child in a private daycare. Mothers can work when they have access to affordable childcare, regardless of the daycare’s status.

If the government insists on imposing quality standards, fine. But it could achieve its goal by governing and regulating the market, and letting daycares compete with each other to offer the best possible service. Part of the freed-up cash could then go toward implementing public daycares in areas where there is a need, where children living in precarious family situations would be given priority access.

By limiting government to this role, Ontario would avoid creating a bureaucratic, unionized system whose interests would supersede those of parents, as in Quebec.