Canada and Ontario’s new child care plans: Are they enough?

Canada and Ontario’s new child care plans: Are they enough?

Canada - and Ontario in particular - are home to some of the most unaffordable child care across the OECD. Affordable child care increases both labour market participation rates and provincial GDP. The newly announced provincial and federal child care frameworks do not effectively address the challenge of affordable child care as the Institute hoped. 

Here is what you need to know 

On June 6th, 2017, the Ontario government released its renewed Early Years and Child Care Policy Framework. This set out a five-year plan with seven action items, including its previous plan to add 100,000 licensed spots for children under the age of four. The province is set to spend $1.6 billion over the next five years to create 45,000 of the 100,000 new spaces by 2022. 
Key items found in the framework include: 
  • Increasing funding for fee subsidies to help families who qualify.
  • Making it more affordable for home daycares to become licensed. 
  • Looking for ways to make child care more equitably priced through an Affordability Strategy.  
  • The launch of an Innovation Fund and a one-stop online hub to support increased use and easier access to help families navigate the system. 
Soon after this provincial announcement, the federal government also introduced its Multilateral Early Learning and Child Care Framework. This multilateral framework lays out a three-year plan to allocate $435 million for investments in child care in Ontario. The framework requires that the initial funds are used to provide help to high-need families, including off-reserve indigenous peoples, recent immigrants, refugees, children with additional support needs, and children from low-income families. 

A plan to make a plan

Neither the provincial nor federal frameworks are very transformational. Neither plan creates a universal or a geared-to-income child care system for families in Ontario. The frameworks include some impressive language and visionary ideas, but lack fleshed out implementation details, especially about how the proposed provincial plan will be funded or when it will be implemented. It is concerning that the plan does not indicate when implementation will begin since 2018 is an election year for the Ontario government. There is less of a commitment to make accessible child care options in the province and more of a plan to move towards it at some point in the future. 

The provincial plan also does not include a comprehensive funding plan for how it plans to pay for its suggested changes. Further, the funding allocated to Ontario through the federal government’s framework ($435 million over three years) is only a drop in the bucket of what is needed. To put it in perspective, Québec spends over $2.5 billion each year on its child care program.    

Who will this affect? 

The federal and provincial frameworks are at odds with each other about who the new child care investments will impact. While the provincial framework suggests that all families in the province will feel the benefits of future investments, the federal framework is more targeted at certain families. Providing programming and funding for families who face greater barriers to accessing child care is important. However, research from multiple jurisdictions consistently shows that a universal approach is more effective and economical than a targeted program.

For Ontario families, the issue of universality is particularly important. The Institute has shown how a family with two working parents earning the average wage spend almost a quarter of their net income per month on child care. These families may not be able to qualify for municipal child care subsidies as they are above the cut-off limit, but their income may still not be enough to afford the high fees seen throughout the province. Further, high up-front costs, the rise of precarious jobs, strict eligibility requirements of subsidies, and long waiting lists for subsidies all add to the complications and difficulty of getting children into reliable care.

When child care fees are unaffordable, families have to make compromises. These can include one parent (more often the female) opting-out of the labour market, looking for other child care options, including placing children into unlicensed child care facilities, or even ensuring that income is kept low enough so as to not become ineligible for subsidies. These are not ideal solutions and have adverse economic impacts especially if one parent leaves the workforce.

If the federal and provincial government’s goal is to “ensure that affordable, high-quality, fully inclusive child care is available to all families who need it,” or to create policies using evidence-based policy decision making, having a targeted and subsidy-based approach is not the most effective way of achieving either of those goals. 

Takeaways

It has proven difficult to create affordable and accessible child care in Ontario’s current market-based system. While the provincial plan is not transformational, it is a start in the right direction. The federal government should be supporting the province to continue to try and create a more accessible, safe, and affordable system instead of creating restrictions and targeted funding that may reduce overall effectiveness.

Québec’s system involves base funding child care programs and charging parents set fees per day. This is much simpler than the current medley of centre fees, family income, employment status, and the number and age of children that are used to determine subsidy rates in Ontario municipalities. All jurisdictions should be supporting each other to create simpler, more accessible, and more affordable child care throughout the province. 

Written by Philippa French

Image credit: Elvetica, Getty Images

Category: Employment, Households, Public Policy, Social Policy