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Toddlers play in soft-play structures in the Infant Room at the Sir Samuel B. Steele YMCA in this June 2014 file photo. (Fred Lum/The Globe and Mail)
Toddlers play in soft-play structures in the Infant Room at the Sir Samuel B. Steele YMCA in this June 2014 file photo. (Fred Lum/The Globe and Mail)

analysis

Liberal budget’s child-care funding commendable, but won’t help families any time soon Add to ...

Canada’s beleaguered child-care system needs two specific improvements: more space in quality care and affordable fees that don’t leapfrog inflation. So, when the Liberals announced in this year’s budget that they’d commit $7-billion to child care and were inking deals with the provinces to invest that money, it was heartening that early childhood education was finally getting some priority attention.

Credit where due: putting Ottawa back at the table is an important step to improving a system that is woefully behind most of the countries to which Canada likes to compare itself. But for those middle-class families hoping to see shorter lines and capped fees any time soon? That’s not going to happen.

For starters, $7-billion sounds like a lot of money when tossed like a treat from a politician’s candy bag. But child care is break-the-bank expensive and all those billions are to be divided up between the provinces and territories, and parsed out over a decade.

The first four years amount to about half a billion dollars each to be added to an annual system which, even in its current woeful state, costs provinces $4.2-billion. (Notably, roughly half of that is Quebec’s budget: for $2.4-billion a year, parents there get coveted $20-a-day child care.) Child-care experts estimate that it would actually cost closer to $12-billion a year – from all governments – to run a system which, to quote Ottawa’s current buzzwords, would be “accessible, affordable and flexible.”

To be fair, Ottawa gives more indirectly to child care, in bulk social transfers to the province and daycare tax breaks to families. Ostensibly, new-and-improved family benefits (price tag: $23-billion a year) are also supposed to help by giving parents extra cash and helping provinces save on social assistance. But Canada has been having this debate for decades now, and aside from a few provincial examples, fees keep escalating and wait lists keep growing.

So where’s the new money going? The feds want the biggest bang, so they’re pushing for it to go to low-income kids who, research shows, get the most benefit from quality child care. “We need to start somewhere,” said Jean-Yves Duclos, the cabinet minister in charge of negotiating with each of the provinces and territories. “The resources will have the most impact if we start with those who are most vulnerable. And over time, we are hoping that we will be extending those resources to make sure other families benefit from those investments.”

If you only have a little (relatively) to spend, it makes sense to invest where it will count most. Then again, every European nation that does child care well has built a universal system, usually with a sliding fee scale based on income, that mixes children from all backgrounds. When pressed, Duclos mentions revisiting the government package in 2020 – the year after the next federal election.

Ottawa claims the money could fund up 40,000 new subsidized spaces within the next three years, depending how the province spends it. Where and how those spaces will be squeezed or added into the current system is unclear. Adding new subsidized space into the system is tricky, and subsidies aren’t currently working that well in many parts of the country.

In Calgary and Saskatoon, according to a 2016 study by the Canadian Centre for Policy Alternative, even families that get a cash subsidy may have to pay nearly $500 out-of-pocket each month. In Ontario, where government pays the difference to the day care, there’s a wait list for families – 18,000 in Toronto alone – who qualify to get one of those subsidized spots. (In other words, to eliminate that lineup, Toronto would require nearly half of the spaces Ottawa is hoping to create – and even then families whose incomes put them just above the subsidy threshold would get no relief.)

Without creating new physical spaces – ideally, well-designed new child-care centres – there’s a risk that in cities like Toronto and Vancouver, more subsidies could actually increase fees for middle-class families forced to compete on the open day-care market. That’s according to economist David Macdonald who co-authored the CCPA fee study with Martha Friendly, executive director of the Toronto-based Childcare Resource and Research Unit. Family budgets can’t bear much more: their study found found that, in Vancouver, for instance, toddler fees rose, on average, nine per cent between 2014 and 2016, or three times the rate of inflation.

Licensed child care is considered affordable when families are spending 10 per cent or less of their net household income on fees: otherwise, families cobble together options, or one parent (typically the mother) leaves the work force. In nations such as Sweden, a sliding-scale fee system is designed so families pay no more than three per cent of their income.

In Toronto, which already has the highest prices in the nation, a 2016 study led by a pair of University of Toronto economists found that child care was already unaffordable for 75 per cent of families. What’s more, half of those families, even after tax deductions and child benefits, would have to fork out more than 20 per cent of their net income to cover day care. That’s like a second mortgage, at a time when many Toronto families cannot even afford one for a home. This is also why increasing subsidies or reducing fees isn’t enough on its own to fix the system: once fees come down, many more families will want a spot in regulated care – a lesson Quebec quickly learned two decades ago.

Duclos, to his credit, appears to understand these issues, at least with a big-picture perspective. He talks about how child care helps the economy, improves outcomes for kids, and balances the genders. He references the need for quality care, well-paid staff and, in an ideal system, capped fees. (So far, two other provinces besides Quebec have managed to pull this off: Manitoba and Prince Edward Island, where the set fees are among the lowest in the country.)

But he also points out that Ottawa can’t solve these problems alone: ultimately, child care rests with the provinces, and the strings attached to federal cash have to be flexible.

“Resources will always be an issue,” Duclos concedes. “We are starting from quite far back and we have a lot of work to do.” With whatever money is now on the table, Canada’s governments better hop to it: the kids need care, the bills need paying, and too many families can’t afford to wait.

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Follow on Twitter: @ErinAnderssen

Also on The Globe and Mail

Trudeau promotes federal child care pledge at daycare visit (The Canadian Press)

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