Yahoo Finance Opinion: $10-a-day-daycare was a disaster foretold
By Peter Jon Mitchell and Andrea Mrozek
You get a terrible feeling in the pit of your stomach when a preventable collision occurs before your eyes. Risks identified. Warnings unheeded. Then the crash.
The risks associated with Canada-wide $10-a-day childcare were well identified. Detailed warnings were issued. But the federal government ignored them. Now, unfortunately, we’re seeing the crash that was predicted.
Last month, Ontario’s Financial Accountability Office of Ontario (FAO), which provides independent analysis of provincial finances, issued a sober warning about the new federal plan. It estimated that by the end of the current five-year federal-provincial agreement about 25 per cent of children under age six whose families will seek $10-a-day spaces will be left without a spot. The FAO also estimates that federal funding promised for the first year after the five-year agreement expires will leave the province on the hook for a $1.2-billion shortfall.
This shouldn’t come as a surprise. Back in February, Ottawa’s Office of the Parliamentary Budget Officer (PBO) estimated the federal plan would fall $1.1 billion short of the government’s 2021 budget commitment to the provinces over the life of the agreement.
We at Cardus did our own cost estimate in May 2021. We figured the federal government would leave the provinces $36 billion short, with Ontario’s share of the shortfall a minimum of $1.7 billion. We argued that the provinces eventually would be left with the financial and political headaches arising from deficient federal funding. There is ample precedent: consider how provincial requests for more health care funding have usually not been met.
The release of the FAO report caused Ontario’s government to come under fire, particularly around the issue of future space shortages. Childcare advocates are calling for funding beyond that outlined in the agreement to create more spaces and hire more early childhood educators.
What does a spokesperson for the federal minister of families, children and social development say in response? That Ontario should commit more money to the program “for the benefit of its citizens and their children.” The spokesperson continued: “This has been done by other provinces and territories. We certainly encourage Ontario to direct any additional resources it deems necessary toward this critical priority.” Wait a second. The “critical priority” being referred to is a brand-new federal program. The comment is an admission that the federal government has badly underfunded its own “critical” initiative and is leaving the provinces to manage the financial and political fallout.
The 2021 federal budget points to Quebec’s childcare program as a model for Canada. More than two decades on in that program, Quebec’s auditor-general found that 46,000 children are waiting for spaces in the much-touted Centres de la petite enfance: only a third of Quebec children have access. Yet the cost of the federally subsidized provincial policy continues to increase. Economist Gordon Cleveland wrote recently: “Canada is now on the same trajectory as Quebec was in the early days … such that increased affordability may come at the expense of quality and accessibility.”
It’s an inequitable model for reducing child care fees. A 2013 peer-reviewed journal article reported that vulnerable children in Quebec were less likely to use the program and more likely to use lower-quality care. Other studies have found that children of mothers with higher levels of education were more likely to access the Quebec program.
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The best and fairest way to reduce childcare costs is to fund parents directly. As it stands, any parent who relies on parental, family or any other form of unlicensed care receives no benefit from the $30-billion federal program. With direct funding, parents make their choices based on the unique needs of their families and the form of care that works best for them.
The federal government has badly underestimated what it takes to create a national childcare system. As a result, it has underfunded the program. Provinces are left holding the bag, and it is Canadian families who lose.
Peter Jon Mitchell is family program director at think-tank Cardus where Andrea Mrozek is a Cardus senior fellow.
