Children's backpacks and shoes at a CEFA (Core Education and Fine Arts) Early Learning daycare franchise, in Langley, B.C., on May 29, 2018.DARRYL DYCK/The Canadian Press
At a time of rising interest rates and rampant inflation, the move toward $10-a-day child care is a rare bit of financial good news for new and aspiring Canadian parents.
But, as Ottawa has rolled out the plan, it’s become clear that many families will likely end up paying far more than 10 bucks per day. As it negotiated separate deals with the provinces and territories, the federal government always intended $10 to be the average – not the maximum.
We should all work to make $10 per day into more than just a guideline.
Child care is a huge expense for young families each month, often amounting to a second rent- or mortgage-sized payment. Young people must pay for this cost on top of housing prices that are frighteningly higher than when baby boomers started their families. Today’s home prices more often require two earners per household, and put even more pressure on working single parents – making child care a necessity.
Child-care payments often cost more than university tuition. Many young families are squeezed between this cost and repaying their own student loans. Today’s loans are typically much higher than the student debt incurred by baby boomers because tuition and cost of living have increased substantially since they started postsecondary.
Just imagine how much more manageable it would be to cover your rent, student loan payments, save for retirement, or pay for adaptations to climate change, if child care cost just $10 per day (or less for low-income households)? The financial relief is huge, when you compare child care fees that routinely cost more than $60 per day in cities across Canada.
Saving up to $50 per day is a big deal for parents. Multiply that by approximately 21 days in a month and you’ve saved $1,050. That’s on par with what the average rent for a two-bedroom apartment in Canada.
Parents can now taste these savings, because the federal government made a $30-billion investment to phase in $10-per-day child care over the next five years – sustained by a $9-billion annual investment thereafter. It is truly historic. A new social program of this magnitude has not been built in my lifetime.
That’s why I’ve worked for years to ensure we deliver the full savings to all families. Unfortunately, that’s not the current plan.
Ottawa promises that $10 will be the average. As the federal government has struck deals with individual provinces, it has also granted those provinces considerable leeway in how they use the additional funding. While all provinces acknowledge the target of $10 per day, it seems like that’s a number mostly designed to grab headlines. The actual details are far messier.
In Alberta right now, parents pay between $10 and $22.19 per day, based on household income. In Ontario, fees will be cut by 50 per cent in 2023 compared with 2020 levels, but that still means a wide variation in the actual daily rate. And Manitoba has expanded an existing subsidy system with the level of financial support determined by income. This means households earning more than $82,877 have seen no change in their fees at all.
When we charge higher fees to affluent families, we incentivize them to search for private options. This will risk robbing the new publicly funded child-care system of the support it needs for long-term success and survival. We don’t tolerate this risk for education and health care.
Instead, affluent individuals contribute more to publicly funded health care and schools by contributing more in taxes over their lives. Their tax rate rises with their incomes.
We should be supporting child care in the same fashion.
We have only one chance to get people off to a good start. So it’s just as important to plan and invest in young people’s well-being as it is the well-being of the aging population. If you want to help all families retrieve a big chunk of their purchasing power, then we need to make our voices heard now. Encourage your elected officials to ensure $10 per day is the maximum fee for child care, not just the average.
Together, we can all make $10 per day child care a game-changer for the finances of Canadians with young kids – compensating for a range of economic challenges that younger people inherit as baby boomers retire.
Dr. Paul Kershaw is a policy professor at UBC and founder of Generation Squeeze, Canada’s leading voice for generational fairness. You can follow Gen Squeeze on Twitter, Facebook, Instagram, and subscribe to Dr. Kershaw’s Hard Truths podcast.
