As a political slogan, $10 a day child care has been a win for the federal Liberals. As a policy, however, it’s been a wait – one that could last years – for parents not lucky enough to secure a government-subsidized spot.
The government’s supporters, the occasional Liberal minister and large swathes of the media have tended to intimate that the child care program was – abracadabra! – a universal social program that would instantly deliver huge savings to any family struggling with budget-crushing daycare bills.
The reality, as parents are discovering, is that it is far easier to cut fees for a fortunate minority than it is to build capacity so that most families can have access to a subsidized spot.
Ottawa’s goal is to have enough spots nationally to accommodate 59 per cent of younger children by fiscal 2025-26. That will require a significant increase in the number of spots.
A recent report from the Canadian Centre for Policy Alternatives shows just how tough getting there will be. It points to the existence of child care “deserts” – places where there is fewer than one daycare spot for every three pre-kindergarten children. According to the CCPA, 48 per cent of younger children live in such deserts.
Another way to look at such data is through the lens of coverage rates at the provincial level, or how many daycare spots there are for younger children. Quebec, with its long-standing system of reduced-fee spots and generous tax credits, has a 57 per cent coverage rate, meaning close to six in 10 families have (somewhat) affordable child care. (There are still lengthy waiting lists for reduced-fee berths that are subsidized with government dollars.)
Elsewhere, coverage rates are still low, and only up modestly from four years ago, before the Liberals’ launch of national subsidies for daycare. In Ontario, for instance, the coverage rate stood at 25.6 per cent in 2019, meaning just over a quarter of younger children had access to a licenced daycare spot. By late 2022, the coverage rate had moved up to 35 per cent. That’s progress, but it still means that the families of two-thirds of children aren’t benefitting from federal subsidies, beyond the existing paltry federal tax credit.
It’s a similar story in most other provinces, with coverage rates ranging from a low of 17 per cent in Saskatchewan to as high as 49 per cent in Prince Edward Island.
That unhappy arithmetic has been studiously ignored by advocates cheering on national subsidies, who prefer to tout average savings that run into tens of thousands of dollars – true, but only if you exclude the unfortunate majority who save nothing at all. That misapprehension is reinforced by the insistence of advocates and some media in referring to the program by its brand name of “$10 a day child care.” The equivalent would be to imagine the press habitually referring to the Harper government’s 2009 economic stimulus measures as “Canada’s Economic Action Plan.”
The mystery of this relatively slow progress isn’t hard to puzzle out. It takes time to create new daycare facilities and to hire qualified staff, particularly given the relatively low wages on offer. That effort is complicated by the formula for federal funding, which necessarily limits the ability of daycare operators to raise fees. Inflation since the launch of the initiative in 2021 further strains the economics.
Despite the jump in costs over the last two years, Ottawa has failed to boost its outlays for child care beyond what it mapped out in its 2021 budget. Whatever additional funds are needed will have to come from the provinces and territories.
In the meantime, parents who have yet to lay hands on the golden ticket that will slash their daycare bills will have to wait. Many will watch their children head off to kindergarten before the system expands enough to offer low-cost care.
Quebec, conspicuously cited by the federal Liberals as a model for federal daycare subsidies, has come up with a solution to this deeply unfair situation, in the form of a generous tax credit that is deliberately tilted toward lower-income families. That design distinguishes it from the current (less generous) federal tax credit whose structure tends to benefit higher-income households.
The federal Conservatives proposed a federal version of the Quebec credit in the 2021 campaign (albeit as a substitute for subsidies). The Liberals assailed that proposal, as did many daycare advocates, but such a tax credit would go a long way to reducing the unfairness of the current model, which heavily benefits a minority of families – while leaving the rest to wander in a daycare desert.