Promoting a Flourishing Society
 
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Do we have a credible cost estimate for a national, high-quality universal daycare system?

Since the start of the pandemic, calls for universal child care have picked up steam.   Before pursuing this policy approach, however, there are important questions to answer. These questions pertain to all aspects of child care—accessibility, quality, and cost. Every family is different, and child care needs and desires vary. Will a federally funded, universal system be able to meet these needs? More importantly, do we have a credible cost estimate for a national, high-quality universal daycare system?  

January 28, 2021
Topics: Family, Daycare, Children

Morna Ballantyne, executive director of Child Care Now, was recently quoted as saying, “Nobody knows [the cost] right now to have affordable, high-quality, accessible child care in Canada . . . because there’s so many variables in making that calculation. What we do know is that we need a lot more public money. We need at least $10 billion, possibly more, on an annual basis.”1

An estimate from 1986 put the cost of a national daycare system at $11.3 billion,2 a number that was higher thirty years ago than what some say is needed today. Accounting for inflation, $11.3 billion would be roughly $28 billion today.

Few other advocates of the pan-Canadian implementation of the Quebec model have provided a concrete cost estimate for this option, but they claim that the system will more than pay for itself.

A recent report titled “Investing in Early Learning and Child Care: A Framework for Federal Financing” does not provide an estimated cost for the proposed national system but calls for Canada to reach average OECD spending, at about $20 billion annually.3

The cost of Quebec’s system has skyrocketed. Between 1997 and 2010, the cost rose 562 percent, with spaces increasing only 156 percent.4 Just one-third of Quebec children in child care can access the spaces deemed to be higher quality.5

Quebec’s spending per child-care space is estimated at $12,400 in operational costs.6 This does not include capital costs, training, the cost of additional members of a federal bureaucracy to administer the program, or a pension fund. True universality—the provision of a space for every child across the geographic diversity of Canada—would be extremely costly and complex to administer.

One non-peer-reviewed paper argues that Quebec’s system more than pays for itself through the increase in taxes that working mothers pay.7 Another non-peer-reviewed paper claims that a national system will immediately create $10 billion in additional GDP, with an eventual increase in annual GDP “of between $63 billion and $107 billion.”8 The assumptions and data behind these claims need to be rigorously tested.

Spending on child care in Quebec has grown without a commensurate increase in spaces or quality. As of October 2020, Canada is ranked first in deficit spending among developed countries.9 These two facts should be enough to press pause on expansion of the Quebec model into the rest of Canada.

The Takeaway

The Quebec model has not achieved universality or high quality, yet its cost has increased dramatically. The federal government should consider tax reductions, tax credits, and funding for families as better ways to help families than funding spaces in a costly, inefficient system.