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Quebec Premier Philippe Couillard speaks during question period Wednesday, November 5, 2014 at the legislature in Quebec City.

Jacques Boissinot/THE CANADIAN PRESS

Quebec's envied daycare system is getting a major overhaul that will dramatically increase the cost for many families, breaking one of the key promises Philippe Couillard made to win election last spring.

The price parents pay for the subsidized system will remain frozen for low-income earners but spike by up to 174 per cent for higher incomes starting Jan. 1 as the province puts an end to a flat-rate system.

The heavily subsidized program in Quebec has been lauded as a model throughout the country by academics and experts in the field. And the federal NDP recently promised to create a national version of the system if elected next year.

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Mr. Couillard, who didn't try to hide the broken promise during his announcement Thursday, said the province's faltering financial picture – a projected $2.5-billion deficit and structural issues that include a rapidly aging population and shrinking work force – meant the current program could not be maintained.

"In the current state of finances, the subsidized daycare system was unsustainable," Mr. Couillard said. "We are acting to sustain it. We are preserving it instead of letting it waste away."

Quebec's daycare system has been credited with putting more women in the work force, boosting income-tax revenue, and raising the quality of care.

Even at the top rate of $20 per day, the cost is a fraction of what most Canadians pay for full-time care. But Mr. Couillard rode to power in April lambasting the PQ for a proposing to raise fees to $9 from $7.30.

The move unveiled Thursday goes much further, freezing fees for families making less than $50,000 annually but raising them for the rest – up to $20 per day for families making more than $157,500 in gross income. Mr. Couillard said more than half of daycare users will still pay less than $9 per day.

"The middle class and low-income families will be shielded," Mr. Couillard said. "This is real social justice."

The daycare hike will bring $197-million in extra revenue to provincial coffers. The savings are relatively small and the political risk large on an overall budget approaching $100-billion, but it is just one of a series of austerity measures expected soon.

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The daycare industry, unions and the opposition parties blasted the government for the broken promise. Parti Québécois interim leader Stéphane Bédard said Mr. Couillard lied to Quebeckers.

"This is a betrayal to families. Quebeckers would never have voted for him if they'd known half the plan," said Mr. Bédard.

Along with its perceived benefits, the program costs the province $2.3-billion, waiting lists are long and it has failed to deliver promised educational gains for poor Quebeckers.

With the changes announced Thursday, families not exactly rich will feel a big pinch. Cat Macpherson, a mother of three, just placed her 18-month-old in the system with her three-year-old. Her plan before Thursday was to return to work freelance writing.

Her husband, a manager in the mining industry, makes the bulk of the family income that puts them near the $20-per-day bracket. For Ms. Macpherson, fees for two children will rise from $3,796 to $10,400 a year on Jan. 1, forcing her to rethink whether to restart her freelance business or remain a full-time caregiver.

"My gut reaction is it will delay going back to work," she said. "Daycare fees will pretty much eat most of the earnings I could expect to cobble together freelancing. Certainly at first."

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Mr. Couillard is gambling that because only about 30,000 families among the 188,314 in the public system will pay double the current rate or more, the political cost will be limited.

He announced that the cost of after-school programs will no longer be linked to daycare fees. The programs will be set at $8 per day, meaning families will see some relief on the horizon.

The daycare hike announced Thursday should help with long waiting lists to get into the public system. Private daycare in Quebec can be had in the $40-per-day range so tax incentives already in place will make them competitive for well-off families.

Quebec has also been increasing places in free full-day pre-kindergarten. Parents now have added incentive to move their four year olds into the school system.

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