CEO and president of Scotiabank Brian Porter poses for a photograph in Toronto on April 18, 2019.Christopher Katsarov/The Globe and Mail
The chief executive officer of one of Canada’s largest banks is urging the federal government to “significantly” enhance its supports for parents with children in daycare to allow more women to thrive in the work force.
Bank of Nova Scotia CEO Brian Porter, in an opinion article contributed to The Globe and Mail, is calling for the federal government to spend about $15-billion annually to top up existing benefits and tax credits for parents who need child care. He recommends increasing the Canada Child Benefit to $5,000 annually for each child in daycare, or more than $400 monthly. And he suggests raising the deduction limit on the Canada Child Tax Credit to $20,000 a child, compared with its the current $8,000 limit.
Prime Minister Justin Trudeau has promised to craft an ambitious stimulus plan to fuel Canada’s economic recovery from the coronavirus pandemic, signalling a willingness to spend on big-ticket social programs. More recently, Finance Minister Chrystia Freeland tempered expectations, promising a “wise and prudent” plan focused on getting Canadians working while keeping COVID-19 under control.
Mr. Porter said a key part of any such plan should help more women join the work force and advance their careers, which could lift Canada’s economic output over time. “We have an opportunity to address this long-standing issue now, not just in response to the current downturn but for the long-term benefit of Canadian families,” Mr. Porter said in the article.
Economists at the bank also argue that the more women participate in the labour force, the more disposable income it creates, which adds to the government’s tax base and may indirectly increase housing affordability. “Upfront costs would be high, but would pay dividends over time,” said a report released last week by Jean-François Perrault, the bank’s chief economist, and its director of fiscal and provincial economics, Rebekah Young.
They estimate that topping up the Canada Child Benefit would cost $11.5-billion annually, and making the tax credit more generous would cost an additional $3.5-billion each year.
A lack of access to affordable child care has hampered women’s participation in the work force, which was nearly eight percentage points lower than for men among adults aged 25 to 54, according to data from Scotiabank Economics and Statistics Canada. That was before the onset of the novel coronavirus, and since then the fallout from the pandemic has disproportionately affected women, who have dropped out of the work force in greater numbers than men, and been slower to return as families grapple with child-care challenges.
Mr. Porter pointed to Quebec as evidence of the difference affordable child care can make. Women’s employment rates in the province trailed other parts of Canada until it introduced a universal, low-cost child-care strategy. Since then, Quebec’s employment rate among women has leapfrogged other provinces.
Economic disruption from the pandemic knocked women’s labour force participation rate from more than 61 per cent, which was near historic highs, down to 55 per cent – a level not seen since the 1980s, according to Statscan. Though that participation rate has since rebounded, it was still below 60 per cent in August.
“This year’s recovery likely won’t be enough to restore women’s participation rate to pre-COVID levels – a factor that carries significant economic consequences,” Royal Bank of Canada’s deputy chief economist, Dawn Desjardins, said in a July report. “It is imperative that this proves a short-term diversion.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.