Skip to main content
opinion

The child-care market in Canada, left on its own, has not functioned well. It has delivered too few spots for children, charged too much to parents and not always treated its workers well.

So it was appropriate for federal and provincial governments to intervene more aggressively in the market with the Canada-wide Early Learning and Child Care plan. First introduced in the 2021 federal budget, it seeks to invest in and regulate the child-care industry such that it can create 250,000 more spaces and reduce fees for subsidized spots to somewhere around $10 a day by 2026.

Some provinces are currently negotiating details of the next leg of the program, which begins April 1. Much of the focus has been on the non-profit sector, which makes up the majority of daycares in Canada. Research here and in other countries has consistently shown that, on average, non-profit child-care centres deliver better care than for-profit ones.

Quality is a consideration, but quantity is, too. Right now, subsidized spaces are limited, with only a minority of families benefiting. That will change over the next half-decade.

But an overriding goal of child-care policy must be to speed up that expansion. With appropriate controls in place, governments can ensure that for-profit operators play an important role in this.

Private equity, pension funds show growing interest in daycare industry

Financial accountability is a must. Ottawa is spending $30-billion over five years on the child-care plan, with provinces contributing billions more. Taxpayers need to know that operators are using that money appropriately.

One example to avoid is that of Australia’s now-defunct ABC Learning, once the world’s largest child-care chain. It received government subsidies while delivering profits for shareholders – making critics wonder why money flowed from public coffers to private wallets. In the end, the company collapsed during the Great Recession under large debt built up through aggressive acquisitions. The Australian government had to spend more than C$20-million to keep the lights on through receivership proceedings.

There must be reasonable caps on what operators charge. Demand already far outstrips supply, putting heavy upward pressure on fees. Again in Australia, where fees are subsidized but uncapped, the competition watchdog reported last year that prices rose 41 per cent over the previous eight years.

But the most important reason for controls is to ensure that families get what the government is paying for: quality child care. And they will get that through heavy investments in the work force.

Labour is the most important resource in the child-care system. For many operators, it is three-quarters or more of their budget. Mandated student-to-staff ratios mean daycares need a large number of qualified early childhood educators.

Unfortunately, the sector has traditionally seen low pay. According to government statistics, the national median wage for an early childhood educator is $20.20. Low wages mean high turnover, which leads to poor quality of care.

A recent Globe and Mail story is illustrative. An independent, for-profit daycare was successful for many years in a north Toronto neighbourhood. A chain that participates in the subsidy program bought the daycare, slashed wages and drove away nearly all the staff. Many parents went with them. The government should encourage what the centre used to be, rather than what it became.

There are different ways to achieve this. Alberta and Ontario say they will create wage floors buttressed by small top-up payments. That could work, as long as the floors aren’t too low and the top-ups not too miserly. Ontario’s initial floor for registered early childhood educators is $18 an hour; child-care advocates suggest it should be closer to $30.

Other provinces, including Quebec and Newfoundland and Labrador, create wage grids for early childhood educators, as has worked elsewhere, including in New Zealand.

Measures such as these could help the sector retain workers – a necessity for creating new spaces.

Too much of the debate has pitted non-profits against for-profits and set punitive, unrealistic caps on the number of for-profit spaces. There must be space, with sensible safeguards, for entrepreneurs to enter the market.

There is a real divide between families with access to subsidized daycare and those who may have to wait years for those critical savings. That divide must be closed as quickly as possible.

Interact with The Globe