A Positive Vision for Child Care Policy Across Canada

THIS DOCUMENT IS THE RESULT of a collaborative process in which Cardus Family conducted consultations with child care stakeholders, academics, parents, educators, NGOs and think tanks. The following parties have signed on to this document and more will be added as we promote the paper. The only shared consensus for signatories is the recognition that “universal” systems do not work. While there are several policy options in the recommendation section, not every signatory to this paper will agree with each of these. We share agreement in rejecting so-called universal systems put forward by government and otherwise welcome a robust discussion and exploration of a diversity of public policy options.

RICK AUGUST, Independent Public Policy Analyst, Regina, Saskatchewan
BRENDA BURNS, President, Child Care Providers Resource Network of Ottawa-Carleton
SARAH GODOY, Mother, BFA
AMORIZA GUNNINK, M.Ed
SAMUEL HAMMOND, Director of Poverty and Welfare Policy, Niskanen Center
HEIDI HIGGINS, Co-founder, Coalition of Independent Child Care Providers of Ontario
PAIGE MACPHERSON, Atlantic Director, Canadian Taxpayers Federation
LYDIA MILJAN, PhD, University of Windsor
ANDREA MROZEK, Cardus
REGNARD RAQUEDAN, Co-Founder of ParentUp, MBA, MS, A-CSMSM, CSPO®, UXC
LIBBY SIMON, MSW
PETER SHAWN TAYLOR, Contributing Editor, Maclean’s
HELEN WARD, Mother, President of Kids First Parents Association

Executive Summary

This paper tells the history of family and child policy and funding in Canada, identifies philosophies around approaches to child care policy, cites international examples, and gives evidence for outcomes from Quebec-style early learning programs. At bottom, this paper draws attention to the fundamental inequality in child care funding today, which is based on the type of care parents choose. Where funding for child care is concerned, a positive vision includes equal funding for all families regardless of care type.

Instead, the child-care-policy landscape is shifting toward “universal systems” that don’t effectively or strategically support families. Evidence lays to rest the myth that a universal system works in (1) providing high-quality child care and (2) providing sustainable child care. The creation of government-funded universal child care systems is structurally opposed to the diversity children and families need. With Quebec-style universal systems, many families are excluded from significant benefit, violating the human-rights principle of equal benefit under the law. Taxpayer money is currently allocated based on the style of child care chosen, violating the principle of free choice without discrimination based on lifestyle choices. Furthermore, government funding for child care systems is opposed to what Canadians prefer. Finally, peer-reviewed research is clear on the lack of benefit for the majority of middle-class children in universal state care.

• In light of all this, we asked the following questions:
• What has the tradition in child care policy been in Canada to date?
• What can we learn from international example?
• What are the characteristics of great child care policy?
• What principles should guide a positive vision for child care?
• Which policies best reflect these guiding principles?

The history of child and family policy places Canada in the tradition of liberal diversity. As a result, a number of different solutions are on the table. Again, those solutions reflect politics that are both left and right, ranging from high subsidies to families, to lower taxes. The only shared consensus for signatories to this paper is the recognition that “universal” systems do not work. 

The goal of this collaborative effort is to take “universal” child care as an option off the table, once and for all. 

Each province therefore can and should take its own approach in early learning and care, as should each municipality, understanding that the care of small children should rest very close to those needing the care. The federal government will want to pursue policy to maximize freedom and choice.

“Child care” here is defined as the care of a child, regardless of who does it. Respect for parental preference in the early years is paramount. The freedom to decide what works for a family comes when many different options are on the table, and this freedom is the result of parents having more money in their pockets. We understand and recognize that in different parts of the country the challenges to care are different—for example, that in rural care, the situation is drastically different from that in an urban centre. This points to the need for solutions that are community based, and not delivered from Ottawa or other provincial capitals. 

While child care is largely a provincial jurisdiction, we also examine federal policy in order to set the stage and understand the overarching policy under which provincial policy lives. As we navigate this difficult topic, the principles outlined will be important in understanding how to best advance the provision of child care. There is interplay between all family, government, business, and civil-society organizations; and a thriving early learning and child care sector will not elevate one area at the expense of the other. 

This white paper is the result of a collaborative effort from experts—parents, activists, academics, educators, businesspeople, think tanks, and NGOs. While we have put forward these options, we welcome a robust discussion and exploration of diverse public policy.

Introduction

THERE IS A FUNDAMENTAL INEQUALITY in child care funding today, based on the type of care parents choose. Where funding for child care is concerned, a positive vision includes equal funding for all families regardless of care type.

Instead, the child-care-policy landscape is shifting toward “universal systems” that don’t effectively or strategically support families.1 Evidence lays to rest the myth that a “universal” system works in (1) providing high-quality child care and (2) providing sustainable child care. The creation of government- funded “universal” child care systems is structurally opposed to the diversity children and families need. With Quebec-style “universal” systems, many families are excluded from significant benefit, violating the human-rights principle of equal benefit under the law. Taxpayer money is currently allocated based on the style of child care chosen, violating the principle of free choice without discrimination based on lifestyle choices. Furthermore, government funding for child care systems is opposed to what Canadians prefer.2 Finally, peer-reviewed research is clear on the lack of benefit for the majority of middle-class children in “universal” state care.3

Understanding all this, we asked:

• What has the tradition in child care policy been in Canada to date?
• What are the characteristics of great child care policy?
• What principles should guide a positive vision for child care?
• Which policies best reflect these guiding principles?

A review of the evidence as well as lived experience indicates that “universal” systems do not work. This is our shared viewpoint, outside which there is disagreement about the most effective family policies to pursue that do work. Thus, a number of different solutions are on the table, which reflects the fact that historic Canadian policy places Canada in a tradition of liberal diversity. These policy solutions are not agreeable to each signatory to this document, however, they represent a shared consensus about what we do know, which is that a “universal” system would create more problems than it would solve. The goal of this collaborative effort is to take “universal” child care as an option off the table, once and for all. We share the understanding that “universal” care is discriminatory, doesn’t work as advertised, and eventually eradicates other choices.

Each province therefore can and should take its own approach in early learning and care, as should each municipality, understanding that the care of small children should rest very close to those needing the care. The federal government will want to pursue policy to maximize freedom and choice.

“Child care” here is defined as the care of a child, regardless of who does it. Respect for parental preference in the early years is paramount. The freedom to decide what works for a family comes when many different options are on the table, and this largely comes through a funding model that prioritizes money to parents. We understand and recognize that in different parts of the country the challenges to care are different—for example, that in rural care, the situation is drastically different from that in an urban centre. This points to the need for solutions that are community based, and not delivered from Ottawa or other provincial capitals.

While child care is largely a provincial jurisdiction, this white paper also examines federal policy in order to set the stage and understand the overarching policy under which provincial policy lives. As we navigate this difficult topic, the principles outlined in the following section will be important in understanding how to best advance the provision of child care. There is interplay between all family, government, business, and civil-society organizations and a thriving early-learning and child care sector will not elevate one area at the expense of the other.

This white paper is the result of a collaborative effort from experts—parents, activists, academics, educators, businesspeople, think tanks, and NGOs. While we have put forward these options, we welcome a robust discussion and exploration of diverse public policy.

Principles of Great Child Care Policy

THE FOLLOWING are the key principles undergirding our approach to great child care policy.

Choice

Real choice means accommodation for many diverse types of care. Choice means the equitable treatment of independent care providers, as well as stressing the power and importance of mothers, fathers, grandparents, extended family, or any other person of the primary caregiver’s choice. Contrast a top-down, one-size-fits-all system with the personal, intimate, local, and child-focused needs and wants of parents in a diversity of places, urban and rural.

Funding Neutrality

All levels of government must remain neutral about the type of child care parents choose, acting only to provide quality regulations based on peer-reviewed research. Centres, public or private, not-for-profit or for-profit, home-based care, faith-based care, nannies, parents, and extended family: it’s all care, and the government does not prioritize one type over another, parents and families do. A government monopoly on child care would be negative, just as a corporate monopoly would be. State neutrality opens up a beautiful patchwork quilt of care—one where parents can make their own choices. State neutrality places a safety framework over non-parental care but otherwise steps back without imposing values on Canadian families.

Quality

Child-care settings should be subject to simple, consistent, and easily understood and enforced quality and safety standards that are transparently enforced. They should not be bogged down in inaccessible, changing, or unknown regulations that have more to do with insurance and legal requirements than on quality and safety. Parents cannot be alienated from standards of quality—they need to be able to measure what care is better quality.

Diversity

Diversity is our strength. Different communities can create their own child care. The principle of subsidiarity means ensuring that decisions are taken as closely as possible to the citizen.4 This links closely to the neutrality principle. A corporate or government monopoly means parental choice and quality suffer. Working together, we can allow for a diversity of child care options to flourish. In the past, advocates of “universal” care bemoaned the “patchwork” of care across the country. Patchwork quilts are a beautiful art form to celebrate. They are a symbol of different types of care coming together into one whole cloth.

Parent Accountability

In existing publicly funded school settings, parents are often shut out or find it difficult to access resources for their children, particularly where special needs exist. The need to advocate for your child and liaise with staff is even more important at younger ages. Direct involvement with a child care provider ensures the best interests of the family are met because the provider is dependent on a good relationship with the family. Parents lack formal representation such as a union and thus lack power in the public square. Funding parents instead of providers helps parents find their place and restores power to parents. Regardless of situation, wealthy or poor, working in paid work outside the home or not, parents control the type, amount, and quality of child care their children receive. Parents need to know they are ultimately responsible for the quality of their children’s care, regardless of type.

Best Interests of the Child

Evidence-based child care provision applies good, peer-reviewed research on what works well for child outcomes. Child care needs to ensure that child well-being is not compromised at any expense. Making economic or social arguments around child care, like drawing correlations to increased labour-force participation, raising the GDP, responding to gender equity in the workplace, or attempting to increase fertility rates may be interesting, but the best child care policy will be the one that prioritizes child well-being. These important principles undergird good child care policy and point to enhancing existing solutions rather than the creation of a “universal” system.

History and Culture: What Makes for Different Approaches to Child Care?

A NATION’S APPROACH to child care begins with its overall approach to family policy, of which child care is a subsection. Countries have distinct histories, traditions, and cultures. 

Olivier Thévenon, an economist with the Organisation for Economic Co-operation and Development (OECD), suggests that a family policy which is reflective of the country’s history will contribute to the policy’s success. In a comparative analysis of family policies across the OECD, he writes: “The historical backgrounds against which family policies have developed are diverse, particularly as regards the roles of state, family and labor market: policy responses are shaped by these contexts.”5

To help us understand the broader context for all policy, including family policy, Danish sociologist Gøsta Esping-Anderson identified three types of welfare states: conservative, liberal, and social-democratic. A Canadian sociologist, Curtis Pankratz, used that classification to see how family policies fall in line with the approach taken to general social policies.6 If Thévenon is right, and the extent to which a policy is reflective of a country’s roots helps ensure success, then better understanding the historic roots of different states could help establish the extent to which a particular policy will work well there.

Pankratz highlights the different roots of the three types of welfare states:

Liberal welfare states are dominated by the logic of the market. Benefits are modest, often means-tested and stigmatizing. These welfare states tend to be low spenders. Conservative/corporatist welfare states are less controlled by markets but their benefits tend to be stratified, and therefore their overall redistributive effects are minimal. These regimes are generally shaped by historical church traditions, and this tends to determine their conservative attitudes toward social policy. The third welfare state type is social democratic. This type is based on universalism and “usurpation” of the market. It is committed to the principle of full employment, and social spending tends to be high, while spending on tax benefits, which are less redistributive, is comparatively low.7

In short, we learn that liberal states stem from belief in free-market capitalism and include countries like Australia, the United Kingdom, Canada, and the United States. Conservative states have roots in a reaction to the tearing down of social structures and institutions in the French Revolution and include Germany, France, Belgium, and Austria.8 Finally, social-democratic welfare states have their roots in Marxism, and this includes countries like Sweden.9

Canada is in the liberal category, but is heterogeneous. For example, Quebec marks an exception from liberalism, as Canada’s only province with a highly subsidized “universal” child care system. International assessments often do not get into the provincial weeds, instead describing Canada as having a federalist structure, which delegates authority to the provinces. Yet particularly in
the distinct society that is Quebec, one cannot overlook the different history and traditions in that province. In a 2013 paper, Rod Beaujot clarifies the contrast: “The uniqueness of Quebec family policy can be related to its Civil Law tradition, in contrast to the rest of the country, which is based on British Common Law.”10

Understanding that Canada’s approach to family policy has been heterogeneous highlights that no particular path in child care should be taken for granted, or assumed to be more effective, or more “Canadian.” We have many options available to us, based in our history and tradition. 

Our principles for good child care policy—choice, neutrality, quality, diversity, parent accountability, and the best interests of the child—are based on the historic Canadian commitment to these factors.

Canada and the OECD

A recent Policy Options article about child care begins by saying that Canada is ranked lowest of all OECD countries for public spending on child care services, at 0.2 percent of GDP.11

Why is this? It’s the definition of “child care” and the word “services” that are problematic. In the past, OECD reports have gathered Canadian funding data only for kindergarten because services and funding for early childhood that isn’t “a system” isn’t easily counted. All other benefits, including billions via the Canada Social Transfer, are ignored.12

Provincial and local spending, even on institutional child care spaces, is not counted, because it isn’t federal, and getting into the provinces is understandably tricky for a body like the OECD. This is something the OECD recognizes in Public Spending on Childcare and Early Education, a document in which they define terms and explain their methodology. They write:

Local governments often play a key role in financing, and sometimes provide childcare services. This spending is recorded in Nordic countries, but in some other (often federal) countries, it is not properly captured in the data and it is much more difficult to get a good view of public support for childcare across such countries. This is because local governments may use different funding streams to finance childcare services, for example, non-earmarked general block-grants, as in Canada (no data presented here), or because information on spending by local governments on childcare is not reported to national authorities, for example, in Switzerland (no data presented here).13

Defining Terms

CHILD CARE | “Child care in this report refers to the care of a child, regardless of who does it. This includes: parents, extended family, schools, kindergarten, siblings, nannies, centre care, and more.” This is the definition cited in a 1988 Statistics Canada National Child Care Survey.14 Conversely, “child care” in the media often means paid care or centre-based day care, staffed by professionals. Conflicts arise in the basic definition of child care since major corporatist entities, such as the OECD, view child care as a necessity to facilitate parents, particularly mothers, working in the paid, GDP-enhancing workforce. Certainly, getting mothers into the paid workforce remains a goal of the Canadian government.15 In order to establish equitable funding for child care, the definition must include parents and family.

EARLY CHILDHOOD EDUCATION AND CARE (ECEC) | ECEC officially refers to any education or care before grade one. It often functions as a proxy for institutional, centre-based, professionally run day care.

CHILD CARE RESEARCH | Research into ECEC skews heavily toward studying child care centres and formalized care by professionals, not care offered in homes. Most often family or home-based care is not included when contrasting types of care and their outcomes. This can lead to a skewed sense of what is beneficial for children, with a disproportionate reliance on the importance of systems and programs for the simple reason that nothing else is being so closely examined. Write the authors of a paper about in-home child care: “Research on early childhood education and care (ECEC) policy focuses overwhelmingly on formal, centre-based provision and, to a lesser extent, on family day care (or childminding) provided in the homes of registered carers.”16

DEFAMILIZATION | Defamilization aims to dismantle the familialist welfare state. There is a modern ideological convergence between Marxism and business-oriented “right wing” entities like the OECD and the World Bank working toward the shared goal of introducing more child care spaces. State-funded day care is key in the new visioning of family policy and society. Marxism’s distrust of the private family partners with business interests toward the goal of “the public child” or “the new child.”17 Defamilization is not voter-driven, but depends on top-down promotion. Thus academic and child care space advocate Paul Kershaw writes government should “utilize the state’s coercive power for the purpose of altering citizenry decisions.”18 By contrast see “Familization/familialism.”

FAMILIZATION/FAMILIALISM | Starting in the late 1800s, the Canadian approach to family reflected a desire to limit the damage, particularly to mothers and children, of industrialization. At the time, there was no minimum wage, no restrictions on hours of work, no laws protecting workers’ safety, and no requirement to help injured workers or their dependents.19 The labour movement together with first-wave maternalist feminist organizations fought for legislation limiting this kind of exploitation of workers, including benefits to soften the blow to families due to workplace injuries, unemployment, and death of the breadwinner. The family wage was one such policy of the day, intended to support families as a whole. Suffragists, including Nellie McClung, head of the Women’s Christian Temperance Union, sought the vote in order to equip women to safeguard the family.20 Direct cash benefits to families marked the basis of what today we call the welfare state.

FAMILY | All too often the family is, or in practice becomes, a way to expand the workforce or increase the GDP. The family is viewed as a collection of individuals, rather than a unified “little platoon” of civil society. This more utilitarian approach contrasts with seeing the family as a caring unit and one that enhances community life in many ways outside commodification. A civil-society approach to family sees the caring contribution of family as valuable with or without pay.

FAMILY POLICY | “Family policy” includes any government policy that touches on the family. This ranges from “social welfare legislation, policies concerning social services (such as daycare), income tax regulations, provisions in civil and criminal codes that determine who is responsible for certain types of dependents, family law, regulations concerning most social benefits, custody decisions, and many other social tools.”21

KINDERGARTEN | Most jurisdictions provide care for five-year-olds before the legal age of school entry at six or seven. In some instances, kindergarten is pushed down to younger ages, as is the case in Ontario, where even some three-year-olds can attend.

“UNIVERSAL” CHILD CARE | “Universal” child care has wrongly been defined as meaning a Quebec- style system of public, state-funded, centre-based, and not-for-profit systems. In reality, all child care is by default universal, because every child must be cared for and is born into a family with this purpose. The reality of Quebec-style child care systems is that not everyone can gain access to the system. The difference with other targeted programs is that instead of helping those in need, the target audience are middle- to upper-class, educated families, who access the system on the backs of the poor.22 So-called universal systems also presume that all parents want to make the same child care choices.

Targeting Versus "Universality"

Another manner in which to consider family policy includes whether benefits are targeted toward a specific group, by income, for example, or universally available to all regardless of income level. A 2014 paper by University of Saskatchewan public policy professor Daniel Béland et al. contrasts social-democratic countries Denmark and Sweden with liberal countries Canada and the United Kingdom. Béland asks whether “universality” is ascendant or on the decline.

His conclusion? In Denmark and Sweden “universality emerged as a major aspect of the postwar welfare state,” where in Canada and the United Kingdom “the state plays a more modest role while voluntary, market-provided benefits are more central to the provision of welfare.”23

In general, the Canadian approach to benefits has been to deliver necessities like food, clothing, and housing through the efficiency of the market, targeting subsidies to those who cannot afford them. “Universal” approaches neglect targeting for those in need, while offering benefits to those who could otherwise pay for it themselves, in instances. This is true of child care, for example, in Quebec, home to Canada’s only “universal” system.

Further Categorizations of Family Policy

In a 2002 Canadian report for the Conference Board of Canada, author Stephen Vail suggests that there are four categories of family policy, and that Canada takes a hybrid approach.24

Vail further suggests there are two predominant family policy paradigms. The first, in place since the 1960s, is the “family responsibility” paradigm, which supports parents as the main actors in family life. This “has led to the establishment of maternity and parental leaves, tax advantages for families choosing parental child care, tax recognition of the costs of employment, child care subsidies and social assistance for lone parents choosing parental care.”25

The second is called “investing in children.” This adopts a more state-interventionist view of the family and “enable[s] parents to participate in the labour force” as well as “early childhood development programs to foster healthy growth and increase school readiness.”26

In a recent Canadian textbook, the family policy chapter also tells the story of two similar paradigms, renaming “family responsibility” as “it takes a family” and calling “investing in children” the “it takes a village” paradigm. The author writes that the former relies on (preferably) intact families, and the latter is more collectivist.27

All of these categories have shortcomings, to be sure, and countries mix and mingle aspects of policy from different categories with success. For example, those who believe in family responsibility may also be very aware that raising children does indeed “take a village.” The question is, who makes up the village? In this day and age, where a true village (population-wise) is not the reality for most, “family responsibility” supporters would say parents choose the village.

PRINCIPLE: Another way of saying “it takes a village” is to say “it takes a village of attachment (to raise a child).” What this means is that parents and their children are surrounded by others with whom they feel a real personal connection and in whom they have deep trust. Equating the village with government is neither logical nor reasonable, but this very often is precisely what is done.

Provision for Families in Canada

A Brief History of Canadian Federal Family Policy

OVER THE YEARS, the Canadian government has been very active in the provision of family benefits. Policies have varied between money targeted toward those who need it most and universal benefits recognizing the importance of all families regardless of income level. Provincial and municipal family funding contribute substantially; however, here we encapsulate the federal history, to enhance understanding of where we, as Canadians, come from.28

A BRIEF HISTORY OF CANADIAN FEDERAL FAMILY POLICY 

1918 Canada introduces the Child Tax Exemption.

1945 Family Allowances start (so-called Baby Bonus). Maintained until 1992.

1971 The Child Care Expense Deduction (CCED) is established and subsidizes both regulated (formal) and unregulated (informal) child care.29

1971 Maternity benefits are introduced for the first time.30

1973 “Family allowances became taxable at the marginal tax rate of the higher income parent in

1973 and were thus no longer universal. . . . Between 1945 and 1973 benefits were not indexed.”31 The targeting of benefits begins in 1974.

1970s–1990s The federal government decreases cash transfers to families by targeting family income and not indexing benefits to cost of living.

1988 The Non-refundable Child Tax Credit replaces the Child Tax Exemption.

1988–1996 Quebec adopts a baby bonus program following a French model of larger payments at higher birth orders. 

1992 Federal government introduces another refundable tax credit, the Goods and Services Tax Credit.32

1993 The Child Tax Benefit (CTB) and the Work Income Supplement (WIS) replace Family Allowances and the Refundable and Non-refundable Child Tax Credit.

1997 Quebec replaces the baby bonus system with a subsidized five-dollar-a-day child care system. The price increases over the years and is today based on a sliding income scale.33

1997 An income-tested Family Supplement (FS) is added to employment insurance. “Varying by family size and income, the Family Supplement can potentially increase the effective earnings replacement to a maximum of 80 percent. As of 2015, FS benefits are clawed back to zero at a family net income of $25,921.”34

1998 The Child Tax Benefit is renamed the Canada Child Tax Benefit (CCTB), and the National Child Benefit supplement (NCBS) replaces the Working Income Supplement (WIS).

2000 Early Childhood Development Agreements (ECDA) start and continue through today. These agreements between the federal and provincial governments promote “early childhood development, early learning and child care, and child care spaces.” In 2014–2015 the government of Canada transferred $1.313 billion to the provinces and territories in support of these goals.35 

2001 Maternity benefits are expanded to include ten weeks of parental benefits and an additional twenty-five weeks of benefits.36

2006 Universal Child Care Benefit is introduced. Families, regardless of income, receive $100 per month.37

2007 The Non-refundable child tax credit is reintroduced.38

2014 Family taxation allows married couples with different marginal tax rates to transfer up to $50,000 to generate benefits of up to $2,000.39 This is cancelled in 2016.

2016 The CCTB, NCBS, and UCCB are rolled into one new benefit, the Canada Child Benefit, a targeted per-child benefit that decreases with increasing income levels.40

2017 Parental benefits are changed slightly, offering a longer time of leave (up to eighteen months) at a lower payout rate.

It is difficult to categorize the Canadian approach to family policy over the years. What is clear is that substantial attention has been paid to this policy area with a diversity of approaches, which suggests flexibility in the creation of future family policy.

Recently Signed Early-Learning and Child Care Agreements

The Multilateral Early Learning and Child Care Framework is an entry point into dedicated federal money for child care spaces. Budget 2018 includes $540 million allocated for 2018, $545 million in 2019, and $550 million in 2020 and 2021 respectively.41 This includes $400 million for child care in the provinces and territories and $100 million for Indigenous child care on reserve.42 The government has not been advertising this as a “universal” system, though some of the language may make it sound like one. The goals include “high-quality early learning and child care” with an emphasis on “recogniz[ing] the importance of qualifications and training for the early childhood work force.”43 Other goals include that child care be “accessible, affordable and flexible,” and the idea that “inclusive early learning and child care systems respect and value diversity.”44 In 2017, the federal government budgeted for $1.2 billion over three years in agreements with the provinces, itemized in TABLE 1.45

Other Monies Transferred from the Federal Government to the Provinces

The federal government transferred at least $16.1 billion between 2000 and today via the Canada Social Transfer. $15.4 billion is accounted for under Early Childhood Development and Early Learning and Child Care.46 More promises are being made:

In the 2016 Fall Economic Statement the government proposes a further investment of $21.9 billion in social infrastructure over 11 years. Budget 2017 will announce further details on the allocations of the new $21.9 billion investment in social infrastructure. In order to flow funding to provinces and territories, bilateral agreements will be negotiated, while recognizing that Provinces and Territories are at different stages of development and allowing jurisdictions to identify priority areas.47

RECOMMENDATION: In order for the bilateral agreements to be successful and effective, they will have to maximize freedom and flexibility.

There is space on the regulatory side to ensure and affirm flexibility. Diversity is an important quality to maintain, and true diversity flourishes where freedom is maintained for a community in a particular province to be able to respond to child care needs in a manner that befits that community. We would prefer money go to parents, but where this is not the path government takes, maximum freedom must be allowed for provinces to act in accordance with citizens’ desires. Separate plans for child care in Indigenous communities seems a hopeful sign in this regard. 

The Funding of Child Care: Province by Province

While Canada thankfully currently has no “universal” plan, the federal government funds child care substantially. Maintaining flexibility in these recently signed bilateral agreements will be the key to their success. Funding should be put toward parents, to let funding follow the child, instead of spaces; however, if this is not the path governments take, then flexibility in how provinces handle child care is important.

Federal  |  The federal government finished signing bilateral agreements with all the provinces in June 2018. $7.5 billion was allocated in the last federal budget over the next eleven years, and this starts with $500 million this fiscal year and increases to $870 million annually by 2026. Budget 2018 includes $540 million allocated for 2018, $545 million in 2019, and $550 million in 2020 and 2021 respectively. There is a separate agreement for Indigenous Early Learning and Child Care.

BC  |  In Budget 2018, the government announced $1 billion over the next three years to fund day care, widely viewed as a step toward a $10- a-day system.48

AB  |  In spring 2017, Alberta announced a pilot program. Twenty-two centres across the province will provide nearly 1,300 child care spaces for $25 a day.

SK  |  No current movement toward a provincial government child care plan; Saskatchewan signed on to the federal agreement. MB Spending $6 million to create up to 739 new licensed child care spaces.

ON  |  Ontario is spending between $1 billion and $3 billion on capital and between $600 million and $750 million in annual operating expenses on 100,000 new spaces by 2021.

QC  |  Has had government day care since 1997 and therefore did not sign on to the federal framework. Quebec will still receive a portion of the federal funding. In 2014–2015 Quebec was spending $2.6 billion annually on their provincial plan, at least a 700 percent increase from when they started.49

NB/NS/PEI  |   Signed on to the federal agreement.

NL  |  Reports show privately run day cares currently going under due to the recent move to full-day kindergarten. The funding allocation for Newfoundland and Labrador over a three-year period is close to $7.5 million annually.

International Examples (Liberal, Social Democratic, Conservative)

THESE INTERNATIONAL EXAMPLES were chosen to give an example of the different approaches in use across the globe. Within the different welfare states, there can be a diversity of approaches. None of these specific examples are sanctioned here as being shining lights; there are pitfalls to every approach. These are examples of different ways of doing child care—some that are more hands-off and others that involve a high level of government intervention.

United States: Liberal Child Care Policy

Child-care subsidies in the United States are targeted. Given little federal involvement in parental leave to date, it’s easy to say that the United States has no family benefits.50 This is not, however, entirely the case.

In 1996 the Child Care and Development Block Grant (CCDBG) was created via an amalgamation of other child care subsidies. It is the largest source of federal funding for child care subsidies and goes to low-income families who are working or going to school. The Block Grant goes to the states who then, within particular rules, can choose how to use it. The second largest source of federal support is the Dependent Care Tax Credit, which also helps to offset child care expenses via taxes.51

The CCDBG program was amended and reauthorized in 1996 as part of welfare reform in the United States. The five goals of the 1996 reform were as follows:

1. Maximum flexibility for states
2. Parental choice
3. Consumer education for parents to make an informed choice
4. Help for parents who want to work, and therefore could come off of public assistance
5. Help for states to improve health, safety licensing, and registration standards52

Given the separation of church and state in the United States, the federal government could not legally or directly fund religious providers. With vouchers, the federal government can subsidize parents to choose the form of care they prefer, religious or non-religious. Thus diversity is maintained, alongside federal funding.53

Recent reforms in the Block Grant are making demands on the quality of child care. “To support this focus on quality, states are required to invest at least 7 percent of their federal award on quality improvement in FY 2016. This will increase to 8 percent in FY 2018 and 9 percent in FY 2020.”54

Block Grants for vouchers are one way of funding diversity in child care. The grants are also targeted to those who need it most and place responsibility for child care at the state level, closer to parents, rather than at the federal level.

Sweden and Finland: Both Social-Democratic, Different Family Policy

Jonas Himmelstrand is a Swedish Neufeld consultant who moved to Finland for their greater educational freedom. In spite of similarities, he remarks that there is no coherent Nordic model for family policy.55 Finland consistently has the best education outcomes in the world, in no small part due to their neutral and equitable package of family benefits, as well as their overall approach to education.56 He writes:

Finland and Sweden take opposite approaches. In Finland, a home care allowance is a feature of family policy, available to all who choose it and firmly supported by successive governments since 1985 until this day.

Finland has had financial support for parents since 1985. It is used by 56 percent of eligible children under three years of age (2011). The Finnish home care allowance is 340 euros (approximately CAD $500) per month, per child age three and under after parental leave is over. Additional children under three get an additional 100 euros (about CAD $150) per month. Children above three but under school age are given 65 euros (just under CAD $100) per month, per child, as long as at least one child under three is at home.

All Nordic countries, with the exception of Sweden, offer some form of home care allowance to those who do not use tax-subsidized daycare after parental leave, up until the child’s second (as in Norway) or third birthday.

Finland offers a choice of subsidized child care through either daycare or the home care allowance which can be used for home care, granny care, neighbour care or other private forms of care. Sweden for the last 40 years has offered only daycare on the national level with the exception of a few months in 1994.

There is little political controversy in Finland about the home care allowance. This is in stark contrast to the Swedish view that public daycare is always best for child outcomes and gender equality. Sweden has essentially eschewed a home care allowance.

The Nordic countries all have a political culture of high taxes and high subsidies. In this context, Finland is offering variety—daycare and the home care allowance. Sweden on the other hand has chosen a child care monoculture, providing only institutional daycare. Finland has all the signs of more successful child outcomes.57

Others observe the Finnish dedication to choice, as well. This article describes Finnish family policy in some detail:

The underlying principle of the development of the childcare system in Finland has been freedom of choice. In the 1960s, a variety of interest groups started to demand that women have equal opportunities to participate in the labour market. As a result, the Child Day Care Act was passed in 1973. But rather than settling competing demands for different kinds of support, the law provided an internationally unique synthesis of these preferences. Since 1990, families have been able to choose between enrolling their children in public day care or caring for their children at home until each child is three years old. As the cost of private day care is also reimbursed, there is public support for nearly all childcare arrangements.58

It’s important to note there is no one Nordic model for Canada to follow, and in this case, were we going to choose one example, we would need to think more Finland, less Sweden. 

Finland consistently has the best educational outcomes in the world, which makes their policy worth studying for that alone. They have a program of family benefits that normalizes a measure of choice, be it to provide parental care in the first three years of a child’s life, or use non-parental child care and return to paid work. The type of child care offered by professionals is of the nurturing and caring, as contrasted with educative models. Finnish child policy is expensive, and it doesn’t reflect Canada’s liberal traditions, which are unlikely to support anything nearing a three-year leave. That said, it provides some funding to parents, is child-friendly, and remains more generally neutral on the nature of parental choices in the first three years of a child’s life. “The allowance consists of two parts: a fixed care allowance amount and a means-tested care supplement. The monthly care allowance is 341 euros for one child under age three, 102 euros for each additional child under age three, and 66 euros for an older sibling who is still under school age.”59

Finns also learned via trial and error that the idea of “universal” child care was too expensive, causing them to move to a more diverse model.

France: Conservative Family Policy

Spending on families is high in France.60 Child care is available to children as young as two years old, and there are allowances for parents who employ different kinds of child minders at home. Policy is shifting to prioritize low-income families; a 2006 law required child care spaces to be held for poor or migrant families. In June 2013, the benefits of family taxation, “the Quotient Familial,” were reduced and
means-tested family supplements were increased.61

France is increasing spending on child care spaces as well. At the same time, families continue to get benefits that increase based on having more children. “Parents automatically receive a family allowance after the birth of the second dependent child, and until the child reaches age 20. . . . After the birth of the third child . . . the parents are entitled to additional family support . . . subject to means testing.”62 Family policy is changing in France, in some instances due to shifting ideological trends, for example, to increase women’s labour-force participation and in other instances due to austerity measures. These may, in fact, act as one and the same motivation since increased labour-force participation is a factor in increasing GDP, and can be achieved via incentives for mothers of young children to work even earlier than they currently do.

Hungary: Conservative or Social Democratic?

In 2017, Hungary spent 4.7 percent of GDP on family benefits, as contrasted with OECD average of 2.43 percent.63 This includes tax breaks, service, and cash for families with children. This approach began in 2010. Day care and kindergarten are free, along with a host of other benefits, which places Hungary in the constellation of social democracy. Yet their constitution, adapted in 2011, identifies that marriage is the union of a man and a woman, and “the family as the basis of the survival of the nation.”64 This marks them as outliers in the OECD, and identifying the traditional Judeo-Christian family as the norm is something Marxist ideology eschews, making the label of “social democratic” incomplete. Hungary is likely a mix of social-democratic and conservative policy.

The purpose of Hungarian family policy is to encourage work, marriage, and fertility.65 Family benefits are generous—70 percent of salary for parents (mother or father) who stay home with a baby in the first year. Parental leave is three years in Hungary, and the payment diminishes but continues if parents stay home in the second and/or third year. Other aspects include free child care spaces and free kindergarten, free meals and books at day care and in school, subsidies for families building or buying homes, state intervention to decrease utility costs, a small tax benefit for those who get married, and baby bonds, as well as family vacation subsidies for in-Hungary travel. 

While there is a small cash payment for parents who choose not to work, it doesn’t compare with the benefits afforded parents who return to work. However, a parent who works will experience the tax benefits of having children even if the other parent is at home. It’s possible that in a family with four children, the parents will pay no tax.

Of note, there are also tax incentives for employers to hire mothers who would like to return to work.

In 2010 Hungary’s total fertility rate was at a precariously low rate of 1.2. (Replacement fertility rate is 2.1 children per woman of childbearing age.) In 2017, the fertility rate was 1.5. Certainly, this marks an improvement; however, it remains short of replacement fertility, and at a tremendous cost.

This example points to how difficult it is to coax fertility up to replacement using government policy levers. This speaks to the need to remove child care policy from policies pertaining to GDP enhancement, labour-force building, or gender equity and place it squarely in the domain of family policy. All manner of justifications have been used to create versions of child care policy. Some of these justifications may seem important, but this is not the point: Child care is family policy. Given the sensitive age of the children involved and what research shows about the importance of the early years, child care policy exists to serve families, not the other way around. Government neutrality, one of our child care principles, will enhance parental choice, and given free choice some parents will choose workforce participation, while others will choose parental child care.

Caring for Preschool-Aged Children: Why Institutional "Early Learning" Doesn't Help

VERY LITTLE ABOUT this white paper would make any sense if we saw benefits from the provision of Quebec-style early-learning and care systems or plans. Of course, early care and consideration in the first years of life is very important for our youngest children before entering grade one, and this is a consensus point between those advocating for “universal” child care and those who prefer other more equitable forms of family support. The early years always matter. But why and how?

Any movement aiming to ensure that diverse forms of caring are accessible to all parents as a matter of routine will need to make the case as to why deliberate “early-learning” programs are not important, particularly in a knowledge-based economy. The answer reflects the age of the children involved and concepts of identity and security. These get wrapped up in one word: attachment. The question of “early learning” hinges on whether children are developmentally ready to learn at ages as young as twelve months, and two or three years old. While much can be said about the best environments in which to learn, this short section will discuss whether “early learning,” and early interaction with peers improves socialization.

Surprisingly, Canadian developmental psychologist Gordon Neufeld says this is not the case, particularly in sending young children into “social” environments before they are ready.66

Socialization Vs. Being Social

Socialization in childrearing means rendering children fit for society so that children can grow and mature into becoming contributing adults, who can respectfully interact with others in community, be it at work or home, with colleagues, family, and friends. Cognitive learning, while important, is secondary to ensuring that young children have the ability to engage in cognitive learning. Little kids who feel anxious, fearful, or cannot “hold on to themselves,” are not in a position to learn.

According to Neufeld and his colleagues at the Neufeld Institute, socialization is more complex than simply being able to get along well with others. Socialization also involves the ability to be true to oneself. Surprisingly, constant agreement and being nice may, in fact, be immaturity in disguise. “You have to be separate enough so you can be with your equals without losing your distinctiveness,” says Neufeld.

He goes on. “Premature socialization,” says Neufeld, “was always considered by developmentalists to be the greatest sin in raising children. . . . When you put children together prematurely before they can hold on to themselves, then they become like [the others] and it crushes the individuality rather than hones it.”

The Problem of Peer-Orientation

One of the issues with large numbers of little people in group-care settings is the issue of peer orientation. This means having small children attach to their peers, rather than to adults. A need to be aware of peer-orientation exists whether or not child care is “universal.” Furthermore, peer-orientation remains an issue for older children and teens as well. Importantly, regardless of the form of child care a parent chooses, and for older children as well, there are ways to mitigate peer-orientation concerns.67

The concept of attachment, developed primarily by psychologist John Bowlby, denotes the instinct that causes adults to care for children and children to receive that care. Successful early attachment is necessary for adult emotional development. In Bowlby’s words, attachment is the tendency “of human beings to make strong affectional bonds to particular others.” As humans, we are highly sociable creatures. But we identify some relationships as being higher priority, and are very particular about who takes that position. It is through these connections that we develop a sense of self.

When small children spend too much time with their peers, they will imitate the features of those they see around them. Diversity—creating it, respecting it, and allowing it to flourish—is one of today’s most popular buzzwords, something to which we pay lip service. However, the early placement of children with as-of-yet undeveloped personalities in group day care for long hours, when they aren’t able to “hold on to” their own special, unique personalities, creates peer pressure toward sameness, not individuality. 

This is, in many instances, one of the reasons parents might choose to delay entry to school. In fact, for much of Canada’s history, children did not attend so-called early learning programs; school started at age six. Ironically, some who advocate for homeschooling—meaning that even at age six, their children do not enter a typical school environment—do so in order for proper socialization to occur. In Home Schooling and the Question of Socialization, author Richard G. Medlin highlights how healthy socialization does happen for homeschoolers, writing, “Home-schooled children are taking part in the daily routines of their communities. They are certainly not isolated; in fact, they associate with—and feel close to—all sorts of people.”

When asked about the gains from early learning for small children, Neufeld simply replies, “I don’t think there is anything to be gained except parental emancipation. And certainly not parental fulfillment. That’s a totally different issue.”

This is not intended to panic parents whose young children are in all-day care. However, it is wise to understand why your children are there. Some parents put their children in care for the express purpose of socializing them; there is not a research-based reason to do so. 

Parents can also take comfort in knowing, Neufeld emphasizes, regardless of care situation, who parents are to their children matters more than what they do. For parents whose children must be in care, it would be wise to confirm that the “early learning” is limited exclusively to playing in an environment of adult attachment.

The Importance of Emotional Intimacy

According to Neufeld, the capacity for healthy relationships unfolds in the first six years of life. “It’s a very basic agenda,” he says. “By the fifth year of life if everything is continuous and safe then emotional intimacy begins. A child gives his heart to whomever he is attached to and that is an incredibly important part. . . . The first issue is always to establish strong, deep emotional connections with those who are raising you. And that should be our emphasis in society. If we did this, we would send our children to school late, not early.”

To serve this purpose, where parents can choose their own village of adults surrounding a child, parents must be able to freely choose their preferred care environment. This choice is hindered when funding is given preferentially based on the type of care. 

This reality speaks to the need to define child care as the care of a child, no matter who does it. The effect of current definitions, which do not include parents or family, is to discriminate against parents and family. What a definition change would signal is inclusivity. While many professionals do a wonderful job working with children, this should not be emphasized at the expense of family and parental care.

RECOMMENDATION: Letting funding follow the child, not spaces, allows parents to make choices that work for their family, in keeping with attachment and developmental science. If a parent chooses parental child care, then fund that. If a parent wants to use non-parental child care, then fund parents to pay for that. Maintain state neutrality toward the care of children. That funding should be divided equitably among all kids by age and likely, though not necessarily, by income.

What's Happening in Quebec?

IN 1997 QUEBEC introduced province-wide “universal” day care. Initially set at five dollars a day, it rose to seven, and is now attached to income. For some activists and academics, this system provides a model for the rest of Canada. In 2004, the OECD Directorate for Education proclaimedCanada’s early-learning strategy was inadequate with the exception of “the advance made by Québec,which has launched one of the most ambitious early education and care policies in North America.”68 (Unfortunately, they stated this without visiting Quebec.)

Love it or hate it, undue attention is placed on Quebec’s model as the only of its kind in Canada. There are metrics for measuring the success or failure of the Quebec “universal” child care system. Whether the system pays for itself, whether it is truly “universal,”69 and mothers’ increased labour-force participation are all angles to consider.70 

However, the focal point of this short section will be on the research pertaining to child outcomes.

A 2005 study by economists Michael Baker, Jonathan Gruber, and Kevin Milligan found that the Quebec child care system doesn’t usher in increased wellness for children. The authors comment that “children were worse off in the years following the introduction of the universal child care program.”71 They continue: “We studied a wide range of measures of child well-being, from anxiety and hyperactivity to social and motor skills. For almost every measure, we find that the increased use of child care was associated with a decrease in their well-being relative to other children.” 

In 2011 a paper by economists Pierre Lefebvre, Philip Merrigan, and Francis Roy-Desrosiers showed the child care system does not improve learning outcomes for children. “Our evidence does not reveal positive effects of the policy on cognitive development for both 4- and 5-year olds,” the authors write.72

Other economists began to wonder about these Baker, Gruber, and Milligan outcomes—questioning whether this could really be true. So economists Steven Lehrer and Michael Kottelenberg decided to check, assuming the results would not be replicated.73 They surprised themselves. “The main result we found was that Baker, Gruber and Milligan’s work is 100 per cent correct. It’s robust. If anything, in our own work, including a paper that came out in Canadian Public Policy and won ‘best paper award’ for that year, it actually finds the effects get larger over time, on average,” says Lehrer.74

Baker, Gruber, and Milligan released another study in 2015, which showed that “negative non-cognitive effects persisted to school ages, and also that cohorts with increased child care access subsequently had worse health, lower life satisfaction, and higher crime rates later in life.”75 

Lehrer and Kottelenberg subsequently released related research in 2018 about how the different genders respond to Quebec’s subsidized child care policy, finding outcomes were different for boys versus girls. They attributed this, at least in part, to changed parental responses.76 They write: “What we found was that the lion’s share of the negative effects in the program were actually coming from the boys. The negative effects were larger for boys. Exactly why this is so is really hard to pinpoint. But these gender differences are important to know.”77

When someone alludes to “universal” positive gains from early-learning programs, typically the research basis for this is found in something called The Perry Preschool Project. Perry Preschool was a small, high-intensive, and targeted intervention with fewer than one hundred high-risk kids in Michigan.78 To extrapolate from that study to suggest that “universal” programs work for hundreds of thousands of children is an assumption, not research-based evidence. Economist Kevin Milligan puts it this way in an interview: “The criticism I have is that it’s not obvious that what we learn from those studies can be applied to the case of [larger-scale programs like full-day kindergarten]. You could make that leap, and say, yes, the return from these intensive interventions on at-risk kids would be just the same for all families. However, that is a very strong assumption and I don’t see that assumption being discussed very appropriately or openly.”79

RECOMMENDATION: Where governments have a more social-democratic history, as is the case in Quebec, one important recommendation is to think Finland, not Sweden. Finnish child policy is expensive, and it doesn’t reflect Canada’s liberal traditions, which are unlikely to support anything nearing a three-year leave. That said, it provides some funding to parents, is child-friendly, and remains more generally neutral on the nature of parental choices in the first three years of a child’s life.

Is There a Child Care Space Shortage ... or a Surplus?

FROM THE MEDIA and from parents we hear that finding non-parental child care can be stressful. Simultaneously, data for British Columbia80 and Toronto81 show there are surplus spaces, sometimes to the tune of one in three child care spaces lying vacant every month.82 So do we have a shortage or a surplus?

The truth is, it’s possible to have both at the same time.

Here are some reasons why this contradictory situation exists simultaneously:

Government provision of care is inflexible. Surveys show that parents do not prefer centre-based care, choosing instead home-like environments.83 Today, governments are building more and more centre-based spaces. This may be why in British Columbia we see that centres with forty or more spaces have the highest vacancies as contrasted with facilities with fewer spaces.84

• The funding of facilities rather than families means parents can’t take their money to a convenient place for them. If spaces are funded, then often the space can be funded and remain empty. Naturally, in a city the size of Toronto, if there is a vacant and funded space in Scarborough, a parent living in Etobicoke can’t use it. The hypothetical centre in Scarborough will not announce that they are getting money for a space for which there is no demand.
• Cost is another factor making finding care difficult. If subsidies are not targeted effectively, some parents may not be able to use available spaces due to cost. 
• This leads to another point about government intrusion in child care. In Ontario, roughly 80,000 spaces were lost in 2014 when a new Ontario child care act limited the number of children under two that independent providers could have in their care.85
• Once care is subsidized to be much cheaper than market value, it’s unlikely that there will ever be enough spaces to meet newly inflated demand. For more on why supply cannot meet demand, see the next section, which explains the economic phenomenon called “cost disease."
• The age of the child can make finding care difficult whether publicly or privately provided. The younger the child, the harder it is to find care. Providers generally run on tight margins, and the cost of caring for infants is very high, making the care of too many infants a difficult business model.
• Parental work schedules can also make finding care difficult. Those doing shift work will struggle to find care outside regular business hours.
• High-quality care is always hard to find. Evidence shows that the quality of state-regulated child care is mediocre or poor.86
• A final point would be to highlight how the conclusion that there is a shortage is often reached, which is by examining the availability of licensed, centre-based spaces and contrasting this with the total number of children in a particular jurisdiction or province. The number of centre-based spaces is often low, because this is not parental preference, and certainly small in contrast with the total number of children of a particular age. This makes the shortage storyline largely fabrication, since it doesn’t account for parental desires for other forms of care.

When there is a mismatch between parental desire and what governments offer; and when governments furthermore curtail the non-government (independent provider) supply courtesy of bad legislation; and finally, when the realities of care for off-business hours and for infants are tough regardless—this is when we get a situation of surplus and shortage at the same time.

Why "Universal" Child Care is the Most Expensive and Least Sustainable

WHEN CARE FEELS hard for parents to find, it is easy to fall back on what looks like a simple solution: a government plan of “universal” care. This is the most costly path a government can take, be it provincial or federal, when contrasted with encouraging independent providers or funding parental/family care. Why are “universal” plans the most costly? Below are some key reasons.

1) CAPITAL/INFRASTRUCTURE | Independent care providers live in homes where there is existing space, without the need of spending government money to build it. Centre spaces, the form of care the government prefers, need to buy land, build the spaces, or rent suitable space before they can get started. This space, unlike independent home providers, will likely be designated commercial space rather than residential, which beyond the duplication (creation of spaces where spaces already existed in homes in the communities) is an additional cost. These centres, based on the size and nature of the business, would also see a rise in insurance costs.

2) BUREAUCRACY | A major cost of government-run “universal” systems is the staff to oversee the system, which has little to do with creating spaces. Government regulation, oversight, research, promotion, and advocacy occur at a cost that is higher than in other forms of care. When strangers, even the most qualified and caring of strangers, are looking after children, as contrasted with local neighbourhood or family care, the costs to ensure oversight, security, safety, and regulations all rise. Larger group sizes than what an independent provider typically has ensures this is always the case.

3) WAGES | The trend in “universal” plans is to unionize workers. This is why unions are enthusiastically behind the push for “universal” systems. In Quebec, unionizing home-based child care workers cost more than $1 billion.87 Subsequently, unions “negotiate” wages upward using strikes that put parents in a difficult position. Unionization creates rules about who can work in a child care centre—what kind of credentials they must have, and what they must earn. Increased training may or may not correspond with the best care for the child and increases costs.

4) IDEOLOGY | Recent governments have been deliberate in curtailing the independent provision of child care. In seeking to establish “universality” of care, recent governments did not actually mean universality of care, as that is the very nature of having children—they need to be cared for all the time and are born into families for this purpose. The “universality” must be public, not-for-profit care. To this they add the requirement that a space be available for every child of child care age. This is neither desirable nor possible, as wait lists in Quebec’s so-called universal system show. However, the push for more spaces is a constant upward push on costs. The cost growth can be exponential, and the Quebec example proves this point. From 300 million in 1997–1998 to 2.6 billion in 2014–2015, that’s an increase of over 700 percent.88

5) MONITORING | The further from a home-care environment a day care is, the higher the costs to maintain even a basic level of care. Instead of trusting the care provider in a small, home-like setting, government monitoring is required, often for legal or insurance purposes. (Some regulations, like the size of a pail that can be present in a day care, don’t have to do with safety, but do involve meeting insurance providers’ demands.)

6) CLEANLINESS/SECURITY | While a small home-based care centre will have cleaning costs, those costs increase when a business must hire professional cleaners. There are unique hygiene issues that providers with large numbers of infants and toddlers face. One Swedish National Board of Health and Welfare study showed that children in child care centres were 6.78 times more likely to be sick than kids at home. Cleanliness is a heightened challenge in all care, but especially in centre-based care. Security speaks to the need to ensure that protocols are in place, particularly if a day care is adjoined to a school where older students are present. School violence, while muted in Canada to date, is real. While violent gun attacks, for example, may be a lesser problem, there are still real risks for child abduction. Further, children wander, and security is important to ensure children are kept safe/contained. 

Interestingly, other nations that once tried to provide a child care spot for every child ended their plans in part because, as was the case in Finland, “providing day care places to all of the children who needed care was found too expensive.”89 Current family benefits in Finland are robust, involving payment to families of children age three and below who want to stay home. Yet this is apparently less costly than “universal” care.

Building on the successful Canada Child Benefit is far more cost effective than creating spaces. This is an effective model that supports families in their diverse choices. It is already in operation. The amount a family receives is geared to income. Monthly amounts should be increased, including for middle-income families for whom child-care-related expenses are a significant burden. Importantly, other child care funding should be transferred and gradually eliminated to offset the costs of increasing this benefit.

How Child Care Subsidies Increase the Cost of Child Care for Everyone

IT IS FRUSTRATING to see public policy that has the directly opposite effect than what we are told it will do. Parents struggle with the cost of child care. So what has the public policy response been? To increase the cost of child care. How has this been achieved? By subsidizing child care, which permanently increases the cost of child care to all of us.

A brief explanation should suffice.90

The reason why subsidies for child care actually increase the cost of child care is an economic phenomenon called “cost disease.” Cost disease is the term used to explain why certain sectors of the economy, particularly education, will see costs rise more than other sectors in the same time period.

In other sectors of the economy, take technology, for example, innovations help the sector produce more and do better. For example, we no longer have computers the size of houses that are unattainable to the average person. Innovation may increase costs short term when people want the latest iPhone and everyone lines up to get it, but in the medium to long run, it drives costs down and iPhones become widely accessible.

Child care, due to the nature of the business, isn’t like this. It is immune to innovation. You will always need a particular ratio of adults to children in child care. The care of infants, for example, offers no flexibility in how to do it. One adult can’t look after ten—and we wouldn’t want them to. There’s little we can do to make child care centres more efficient. 

So then the question is, why would subsidies raise costs? Subsidies represent an increase in demand, because they artificially push the costs down—and suddenly more people jump in to “demand” that service, particularly if this is in contrast with other unsubsidized forms of care. With increased demand comes the need for more supply. More supply can only be met by more workers. There are barriers to entering the child care workforce, sometimes artificial ones, for example, high education requirements to get an early childhood certificate. In order to get in more workers, the costs of wages must rise to attract more workers, to meet the newly inflated demand. And on it goes, upward and upward.

Subsidies to parents do not achieve this increased cost outcome because the parental subsidy will naturally see parents choose from a range of options, not the one form the government chose to subsidize. They will have babysitters, family members, nannies, and they will turn to local homes and co-ops where a couple of spaces are provided nearby—a far cry from the centre-based care government subsidizes. In effect, subsidies to parents allows them to use existing child care sources—the ones that don’t need new infrastructure to be built, the ones that don’t need additional security/education/training— all because they were found in parents’ natural communities.

RECOMMENDATION: A response to this is to let funding follow the child, not spaces. If a parent chooses parental child care, then fund that. If a parent wants to use non-parental child care, then fund parents to pay for that. Maintain state neutrality toward the care of children. That funding should be divided equitably among all kids by age and likely, though not necessarily, by income.

A Positive Vision of Family Policy: Suggestions and Solutions

Federal Recommendations

CANADA’S APPROACH TO FAMILY policy has long been heterogeneous. No particular path in child care should be taken for granted, or assumed to be more effective, or more “Canadian.” We have many options available to us, based in our history and tradition.

BUILD ON THE SUCCESSFUL Canada Child Benefit. This is an effective model that supports families in their diverse choices. It is already in operation. The amount a family receives is geared to income. Monthly amounts should be increased, including for middle-income families for whom child care related expenses are a significant burden. Importantly, other child care funding should be transferred and gradually eliminated to offset the costs of increasing this benefit.

WORK ON INCREASING the flexibility of parental leave. Allow for parents on leave to receive a higher level of employment income, before EI benefits are clawed back. Many parents would like to work up to twenty hours per week while on leave, but the current system doesn’t make this feasible. Allowing for a small amount of part-time work while on leave would help parents stay engaged in their jobs and help businesses who may not need to hire a full-time replacement worker. This also eases transitions and sets up greater flexibility in the workforce, something many parents desire long after parental leave is over. Business can take their own approach to this, including the use of “keep-in-touch” programs for parents on parental leave.91

MAINTAIN NEUTRALITY toward market-based/independent child care. Diversity and choice are critical. Today we are witnessing unnecessary discrimination against market-based, home-based, or other private/independent child care. These forms of care are some of the most popular for parents as they often mimic the home environment more closely.

REMOVE CHILD CARE POLICY from policies pertaining to GDP enhancement, labour-force building, or gender equity and place it squarely in the domain of family policy. All manner of justifications have been used to create versions of child care policy. Some of these justifications may seem important, but this is not the point: Child care is family policy. Given the sensitive age of the children involved and what research shows about the importance of the early years, child care policy exists to serve families, not the other way around. Government neutrality, one of our child care principles, will enhance parental choice, and given free choice some parents will choose workforce participation, while others will choose parental child care.

MAXIMIZE THE FREEDOM of the federal-provincial bilateral agreements. There is space on the regulatory side to ensure and affirm flexibility. Diversity is an important quality to maintain, and true diversity flourishes where freedom is maintained for a community in a particular province to be able to respond to child care needs in a manner that befits that community. We would prefer money go to parents, but where this is not the path government takes, maximum freedom must be allowed for provinces to act in accordance with citizens’ desires. Separate plans for child care in Indigenous communities seems a hopeful sign in this regard.

THINK FINLAND, not Sweden. If spaces must be funded, the Finnish approach is superior to Sweden’s. Finland consistently has the best educational outcomes in the world, which makes their education policy worth studying for that alone. They have a program of family benefits that normalizes a measure of choice, be it to provide parental care in the first three years of a child’s life, or use non-parental child care and return to paid work. The type of child care offered by professionals is of the nurturing and caring, as contrasted with educative models. Finnish child policy is expensive, and it doesn’t reflect Canada’s liberal traditions, which are unlikely to support anything nearing a three-year leave. That said, it provides some funding to parents, is child-friendly, and remains more generally neutral on the nature of parental choices in the first three years of a child’s life. “The allowance consists of two parts: a fixed care allowance amount and a means-tested care supplement. The monthly care allowance is 341 euros for one child under age three, 102 euros for each additional child under age three, and 66 euros for an older sibling who is still under school age.”92 Important to note is that the Finns also learned via trial and error that the idea of “universal” child care was too expensive, causing them to move to a more diverse model.

DEFINE CHILD CARE as the care of a child, no matter who does it. The effect of current definitions, which do not include parents or family, is to discriminate against parents and family. What a definition change would signal is inclusivity. While many professionals do a wonderful job working with children, this should not be emphasized at the expense of family and parental care.

LOWER TAXES for families with children. Lowering family taxes provides a viable way for parents to be more self-sufficient, choosing what they do with the money they are not paying in taxes. Family taxation is one way to achieve this, and a simple lowering of individual taxes for those with children is another way.

Provincial Recommendations

LET FUNDING FOLLOW the child, not spaces. If a parent chooses parental child care, then fund that. If a parent wants to use non-parental child care, then fund parents to pay for that. Maintain state neutrality toward the care of children. That funding should be divided equitably among all kids by age and likely, though not necessarily, by income. For example, in British Columbia, the Affordable Child Care Allowance began in September 2018. Funding is on a sliding scale but parents who use non-parental care can get up to $1,500 a month to spend on child care.93 If that were extended to parents who want to do parental child care, that would allow a lot of families to choose to do so.

IF A GOVERNMENT CHOOSES a tax rebate program for child care, broaden the definition of what constitutes child care to include all forms of child care, be it parental, family, home-based, nannies, or independent. If families don’t have the money to pay for child care up front, include a voucher program for parents, not spaces. Vouchers should be in a dollar amount that reflects the cost of child care and could cover a whole range of options, from parental child care to institutionalized care, day homes, nannies, and family caregivers.

STOP DISCRIMINATION against market-based child care/independent child care. In some provinces there is a deliberate strangling of the private sector. This results in a decrease in spaces and choices. Opening the market up—under appropriate regulation and safety requirements, of course—would mean more choice for parents. Child-care provision can and should be allowed to be entrepreneurial activity.

REDUCE INEFFICIENCY in finding child care and improve data-gathering of child care providers. This kind of privately owned and operated service will help parents find and choose the proper non-parental child care service for their family. Digital tools such as online registries and mobile apps can accelerate the discovery of these services.94

ESTABLISH A STABLE and unchanging age for kindergarten to begin. In Ontario, the goal appears to be to extend government-funded kindergarten to lower and lower ages. What this has done is create instability, and put non-parental child care providers out of business. Establishing an age at which kindergarten starts would ensure stability of the child care sector below that age, without the insecurity that the constant threat of government encroachment provokes in the sector. Kindergarten should also be targeted toward at-risk children who may actually benefit from the programs.

CHANGE THE REQUIREMENTS to become a qualified Early Childhood Educator. Qualifications are important, but education and training for staff at child cares can vary. More important than degrees are the presence of caring and empathetic adults in a high ratio of adults to children allowing for dialogue and listening.95 Newcomers to Canada, for example, could enter into child care provision immediately without the barrier of lengthy and expensive degree and certificate programs.

STREAMLINE THE REPORTING process for independent child care inspectors.96 Currently in Ontario, checks on the quality of child care in independent child care provision are widely variant between inspectors. Standardizing the approach would allow for consistent and objective reporting.

FACILITATE LICENSING in Ontario.97 “Gaining accreditation for independent childcare providers can be a difficult and costly endeavour. . . . These agencies take a regular fee, per child, averaging $10 per child, per day.” There is often no benefit to the independent child care provider the result of licensing, however, there is a tremendous financial burden. Changing the problems of licensing would help return independent child care providers to the market in Ontario. Allowing independent child care providers to engage in a consultative process that would help form how licensing occurs will ease the burden on independent child care providers and create more options for families.

Appendix: Kindergarten, Province by Province

PRESCHOOL-AGED CHILDREN receive care in the form of kindergarten. In some provinces, some children enter kindergarten at age three. Kindergarten is entrenched in our education system, and being extended to younger ages. It is included here to better understand this existing child care benefit in Canada.

In 2010–2011, BRITISH COLUMBIA phased in full-day kindergarten. Some were against the idea.98 Others, like Vancouver school board chair Patti Bacchus, liked the idea of full-day kindergarten but were concerned about implementation. Bacchus said, “We’re adding this—it’s a positive program—but it shouldn’t be at the cost of tried-and-true supports for students. We are losing special education teachers. We are losing counselors. We are losing ESL support.”99

The provinces of ALBERTA, SASKATCHEWAN, and MANITOBA do not offer full-day, state-funded kindergarten.100 Instead, they have a combination of half-day or otherwise part-time programs. 

ONTARIO phased full-day kindergarten in, concluding the process in 2015. The move to full-day kindergarten was more costly than first estimated,101 and simultaneously disrupted child care provision, closing some day cares down.102

QUEBEC introduced optional kindergarten in 1999.103

NEWFOUNDLAND and LABRADOR began offering full-day kindergarten in 2016. In spite of hiring additional teachers, the process was less than smooth as students flooded unprepared classrooms.104 Registration was open to children age four as of January 1 that school year.105

NOVA SCOTIA offers full-day kindergarten. In August 2017, the education minister Zach Churchill promised an extension to four-year-olds, which is currently available for some, not all.106

Finally, NEW BRUNSWICK and PRINCE EDWARD ISLAND have mandatory full-day kindergarten for five-year-olds.107

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