Children's backpacks and shoes at a daycare facility in Langley, B.C., on May 29, 2018.DARRYL DYCK/The Canadian Press
It’s happy days for parents getting affordable child care under the national subsidized daycare program. For families yet to secure a spot, not so much.
The national child-care deal that aims to cut out-of-pocket costs to parents to an average of just $10 a day by 2026 has so far been a huge success for families fortunate enough to find spots for their kids. But progress on the second part of the program, to expand access, has been much slower.
For less fortunate families, costs aren’t falling and frustration is growing as wait lists lengthen. It’s entirely predictable: slashing fees results in increased demand.
Since the Canada-Wide Early Learning and Child Care program was announced in April, 2021, fees for regulated child care in six provinces have fallen by at least 50 per cent.
Parents in Alberta are saving up to $13,700 per child, per year, while parents in Ontario are getting to keep up to $8,500 they were previously paying in fees. Across the country, parents are saving thousands of dollars each month because of the new system – if they have a subsidized spot.
Unfortunately, supply is nowhere near meeting demand.
Last year, 26 per cent of parents of children ages zero to five years old not using child care reported being on a wait list, up from 19 per cent in 2022, according to Statistics Canada. Meanwhile, 41 per cent of parents could not find affordable care in 2023, a slight decline from 48 per cent in 2019.
The number of children in care should be growing. Instead, it is shrinking. In 2023, 56 per cent of children ages zero to five years old were in licensed or unlicensed care, down from 60 per cent in 2019, according to Statistics Canada. The number of children in licensed and unlicensed care, excluding Quebec, dropped by 9.6 per cent from 2019 to 2023.
The problem of meeting demand cannot be fixed overnight. That’s fair. But telling parents shut out of the system to bear it while their friends and neighbours pocket thousands in savings each year is not.
An enhanced tax credit, building on the existing federal credit, for those families paying for child care outside of the $10-a-day system is needed as a matter of simple equity.
Quebec, which the federal government has pointed to as a model for its own effort, introduced a generous tax credit a few years after the 1997 launch of $5-a-day care for children under 4. That credit is weighted to allow poorer households to claim a higher proportion of daycare expenses, and allows families to claim up to 78 per cent of expenses for non-subsidized child-care service.
Amid long wait lists, the tax credit helped to reduce the gap in costs for subsidized and non-subsidized daycare families. It’s a measure that Ottawa would do well to copy.
But that credit cannot become an excuse to stop building up the number of low-cost spots. The provinces and territories must introduce new funding formulas that reflect the true costs of operating child-care centres, and fast. Ottawa, too, should boost its commitment, reflecting the reduced buying power of its initial funding.
In Ontario, operators that wanted to opt in to the program had to freeze fees in March, 2022. Those who had kept fees low to help parents coming out of the pandemic were stuck.
The amount the province has allowed operators to increase fees to account for inflation – 2.75 per cent for 2023 and 2.1 per cent for 2024 – does not reflect the true costs of providing care, many operators say. The shortcomings of this model are by now clear. The YMCA of Greater Toronto has said it is currently losing approximately $10,000 a year for each infant in the charity’s care, for example. (Ontario told operators earlier this month it will introduce a cost-based funding formula in 2025.)
Any new funding formulas must be attractive enough to allow for-profit providers to operate. They account for 30 per cent of licensed spaces for children under 6 in Ontario, and for more than 60 per cent in Alberta. Their continued participation in the system is essential to its success, as even many staunch supporters of not-for-profit child care concede.
Even if funding formulas are quickly introduced and expansion is pursued with much greater urgency than it has so far, many families with children currently under the age of 6 may never enjoy the program’s savings.
That is simply unfair. Affordable child care cannot be a lucky lottery ticket – a windfall for some, while others can only look on in envy.