Pierre Fortin is emeritus professor of economics at the University of Quebec at Montreal
Since 1997, Quebec has run a European-type of low-fee universal childcare program. Three types of subsidized childcare services were made available: early childhood centres (CPE), family-based caregivers and low-fee private garderies.
Initially set at $5, the daily fee was increased to $7 in 2004 and replaced by a fee schedule rising with income in 2015. Today, the fee ranges from $7.75 to $21.20. On average in 2016, a day of childcare cost $10 in Montreal, $47 in Ottawa, $49 in Vancouver and $54 in Toronto.
The program was immensely popular from the beginning. The utilization of low-fee childcare shot up almost instantly and the labour force participation of mothers increased sharply and persistently. Last year, 85 per cent of Quebec women between the ages of 20 and 44 were in the labour force, against 80 per cent on average in other parts of the country. Crucially, the published research of three high-level teams of labour economists from five universities (UQAM, Toronto, MIT, UBC and Queen's) concluded that it was not just a lucky coincidence, but that Quebec's childcare reform had indeed had a large and lasting causal impact on mothers' employment, every other influence being taken into account.
In 2016, Quebec's childcare program cost $2.5-billion, worth about 0.6 per cent of the province's GDP. This is close to the OECD average and definitely not outlandish. Cost management by the government and individual childcare centres has been prudent. Since 2002, the annual growth rate of public funding per childcare space has been less than 2 per cent. Wages in the childcare sector have increased in line with the provincial economy's average of 2.3 per cent a year.
How much of the addition to subsidies from the childcare reform is recovered by the increase in net fiscal revenue stemming from so many more working women? One study figured out that some 40 per cent of the cost would be recovered by the increase in income and payroll taxes alone. Taking account of the long-term effects on all types of taxes, transfers and fiscal expenditures, colleagues from the University of Sherbrooke and I then found that the federal and provincial governments would get back much more than 100 per cent of the cost of the reform. In other words, the latter was, in fact, "paying for itself."
In the early 2000s, the new policy was a victim of its popularity. Increases in new childcare spaces could not follow the fast-rising demand. To solve the problem of long waiting lists, the government gave a generous refundable tax credit to parents who would use full-fee private garderies. The last decade has witnessed a rapid expansion of this fourth type of childcare provider. They now offer 60,000 childcare spaces, against 5,000 in 2008.
There is no shortage of spaces any more in the aggregate, but a new difficulty has emerged: the quality of care is considered to be "inadequate" in nearly 40 per cent of these full-fee private garderies. The concern is with health and safety, physical environment, child-staff ratios, teacher qualifications, activities, educational program and interactions with children and parents.
Clearly, the surveillance of quality in full-fee private garderies has been neglected. The result is that the distribution of children is skewed toward low-quality providers. This is compounded by the fact that children from low-income families are overrepresented in the low-quality garderies and underrepresented in the high-quality CPE. What this means is not that a low-fee universal system such as Quebec's is bad for the development of children, as some have hastily concluded, but that any system that tolerates substandard quality is bound to fail.
In its first 20 years of existence, Quebec's low-fee universal system has been extremely successful in achieving its quantitative target. It has allowed a large number of parents to accomplish a better work/life balance at no net cost for taxpayers. In the next 20 years, the challenge will be to invest some of the excess of government revenue over cost in better responding to the challenges of quality and equity.