Is giving parents money the best way to fund child care?

This op-ed was authored by Armine Yalnizyan and originally published by the Toronto Star on Saturday August 28, 2021 as part of The Saturday Debate.

Every election is in part about affordability. Canada’s 44th federal campaign kicked off with a vigorous debate about how to address the cost and lack of child care — a service vital to maximizing parents’ ability to get and retain paying jobs.

All four federal parties promise to make child care more affordable. The Conservatives say giving parents more money should be the extent of federal support. They’ve pledged to rip up the Liberals’ recent federal-provincial deals that provide funding for more and better quality services in early learning and child care. New bilateral agreements with seven provinces and one territory account for $11.4 billion of the $30 billion on offer by the Liberals over five years and cover almost half of all Canadian preschoolers, welcome news for parents growing more desperate as the pandemic continues.

Only one province is onside with the Conservatives’ approach: Jason Kenney’s Alberta. Even Ontario was scrambling to sign a deal before the election writ dropped. Conservative governments in Manitoba, Saskatchewan and PEI negotiated mutually acceptable terms for federal funding that advances their own priorities, while Nova Scotia’s newly elected majority Tory government has said it would build on the deal, not tear it up, as per Erin O’Toole’s plan. Quebec would stand to lose $6 billion in new funding if Conservatives are elected.

A focus on affordability alone misreads the problem and solution for five reasons.

  1. If simply giving parents more money was the fix, we wouldn’t have a problem: From the early 1990s to 2020, federal transfers to parents increased tenfold, from $2.6 billion a year to $24.3 billion. Both Conservatives and Liberals almost doubled expenditures each time they were in charge. “More money in your pocket” also came through more generous tax breaks over the course of those years. The Child Care Expense Deduction cost the public purse over $1 billion in 2018. But parents are still scrambling to find care. Despite gains in subsidized child care capacity, only half of our 2.5 million children ages 0 to 5 are in a paid care arrangement, and only about 27 per cent are in licensed, regulated care. Wait lists are through the roof. Parents need more help, not just cash.
  2. The supply problem has worsened: The pandemic stripped capacity, but we are unsure by how much. There were child care “deserts” before COVID-19, but enrolment has dropped by up to 60 per cent in places like Markham, and 22 per cent Canada-wide. If a quarter of our roads and bridges were out of commission, premiers would have plans to repair this vital infrastructure. No plans exist for the loss of child care. Provinces are cash-strapped. Restoring and adding capacity makes federal funding more needed than ever.
  3. Growing the system requires a plan: One lesson from Quebec was that prioritizing the demand side (reduce costs by giving parents cash) made high-quality care less expensive for those who already had it, but didn’t add more high-quality care. Lower costs don’t guarantee better choices. Simply expanding supply isn’t enough either. Alberta’s Bill 39 sought to grow the system by deregulating care: fewer qualification requirements means more people can offer the service. We wouldn’t deregulate requirements for doctors, teachers or plumbers to increase supply. Why is this acceptable for educators of our youngest, whose brains are being hard-wired for life?
  4. Improvements needed everywhere: The Conservatives say the Liberal approach is one-size-fits-all and top-down. This ignores how bilateral agreements work. Every province is starting from a different place, so every deal is different. Some put an emphasis on “educating down” — extending full-day junior kindergarten building on existing public infrastructure. (Currently only half our four-year-olds have that opportunity.) Others focus on improving care for underserved communities. Crucially, all deals address the need for better training and pay to recruit and retain qualified child care workers. As health experts Pat and Hugh Armstrong have been saying for years, the conditions of work are the conditions of care.
  5. Quality, not just quantity: Whatever we spend, let’s make sure we’re maximizing returns. Quebec saw $1 in subsidies bring in $1.75 in new revenues due to mothers’ higher employment rates. The missing ingredient for future growth is universally accessible high-quality care. By maximizing children’s learning potential, we maximize individual and economywide earning potential. In Europe and Scandinavia, universal access to high-quality care isn’t a political football. Investments produce better labour force and economic benefits plus healthier children who are ready to learn. Tax credits can’t deliver such results. Why spend a bundle and still leave money on the table?