Canada’s Child Care Program reduces daycare expenses for parents

As Susana Ibarra’s maternity leave was winding down and she was preparing to return to her office outside Toronto, she still faced a major challenge: finding care for her son and then figuring out how to pay for it.

Finally, after putting him on a dozen waiting lists, he got a place. Even better, he’s come at a discounted rate of 600 Canadian dollars, or $450, a month.

The low cost was the result of an ambitious daycare plan expanding across Canada intended to drastically cut fees that advocates say will address one of the most vexing problems facing many working parents.

“It was just perfect timing,” said Ms. Ibarra, who returned to work as a paralegal at a tax services firm in Mississauga, a suburb of Toronto, in January. She had heard plenty of stories from co-workers who stopped working after having children because childcare costs were so exorbitant.

The National Daycare Plan was introduced two years ago by Prime Minister Justin Trudeau’s government with the aim of steadily reducing childcare costs so that, by 2026, tens of thousands of childcare slots childcare would be available at a daily rate of C$10, about C$200 a month, or less.

By comparison, in large urban areas like Toronto or Vancouver, daycare can cost CAD 1,200 or more a month, or about $60 a day.

The federal child care program is “a transformational project at scale with the work of previous generations of Canadians who built a public school system and public health care,” the federal government said in a statement when the program has been presented.

Working with the country’s provinces, which are responsible for providing childcare and education services, the federal government plans to spend up to CAD$30 billion to create a total of 250,000 new low-cost childcare spaces. cost, mainly in public daycare or non-profit family-based centers and providers.

Child care providers use government funding to reduce their rates over time until they reach the C$10 per day threshold.

Day care centers in five of Canada’s 13 least populated provinces and territories have already lowered taxes to that level, while the remaining provinces, including Ontario, have cut their road taxes in half to reach $10 a day.

To date, around 52,000 low-cost childcare places have been created under the program across the country.

“This is part of our plan to make life more affordable for the middle class and the people who work hard to be a part of it,” Trudeau said in March when announcing the program’s expansion to Manitoba.

While the program has been widely praised, it has encountered growing difficulties with demand for discounted childcare space outstripping supply and providers grappling with a shortage of workers.

Making childcare more accessible frees many working parents, especially women, from not having to choose between their careers or raising their children, childcare advocates and researchers said. Studies have also shown that low-cost childcare is an economic boon because it increases women’s labor force participation.

“Not only is this really good for our economy, not only is this really good for gender equality and for women in the workforce, but it’s also really good for setting our children up for success,” said Karina Gould, Canada’s Minister of Families, Children and Social Development.

Among the wealthiest countries in the world, European nations tend to dominate childcare policy rankings.

At Unicef relationship two years ago which measured the costs of maternity leave and childcare, among other factors, showed that nine of the top 10 nations were in Europe, led by Luxembourg. (Canada ranked 22nd, while the United States, which spends far less on child care than most other wealthy nations, was 40th.)

Rosanne D’Orazio and her husband moved more than a decade ago from Montreal to Iqaluit, the capital of Canada’s sparsely populated territory of Nunavut, where she said asylum consumed a large chunk of her pay working for an Inuit association.

But last December, the child care tuition for her 3-year-old daughter dropped to $10 a day after day care centers in the province began lowering prices as part of the federal program.

Ms. D’Orazio, who also has a 7-year-old son and whose husband is a freelance photographer and videographer, has decided to change her career.

Having a monthly daycare reduced to CAD 200 from $1,500 “allowed me the flexibility, the financial freedom,” she said, “to quit my nine-to-five job and become a consultant” for Indigenous organizations.

Canada’s program was modeled, in part, on a similar initiative in Quebec that began 25 years ago. Parents pay about C$9 a day for government-funded daycare.

Supporters say the program has enabled more women to work. Nearly 90 percent of women in Quebec are in the workforce, the highest job participation rate among women of any Canadian province.

The program has also boosted the province’s economy: Quebec’s gross domestic product is 1.5 percent higher than it would have been without the program, according to research by Pierre Fortin, professor emeritus of economics at the Université du Québec in Montreal.

“We certainly know that there are strong benefits for families and there are benefits for the economy, so that’s what convinced the Canadian government to follow Quebec’s lead,” said Gordon Cleveland, professor emeritus of economics at the University of Toronto, who advised the federal government on its child welfare program.

One of the biggest challenges facing child care providers who are part of the federal program is accommodating parents looking to enroll.

“I knew the parents I care for would need this program,” said Susie Beghin, owner of Alpha’s Discovery Kids, which runs three day care centers in what she described as working-class communities outside Toronto.

The centers serve 270 children and have a months-long waiting list of parents looking for a discounted space.

The increased demand has magnified existing problems in Canada’s childcare sector, including labor shortages and concerns about low pay. Some critics fear that the Trudeau government is investing a significant amount of money in a program that will serve a relatively small number of children.

Others say more parents would benefit if the government instead expanded existing childcare tax breaks.

“Despite the federal program’s best intentions, I fear it will strengthen an expensive, poor-quality program that serves a minority of children” and underestimates the cost and complexity of child care, said Peter Jon Mitchell, program director for families at Cardus, a research group.

Some daycare providers say the program has made raising wages more difficult because once they receive government funds, they can’t raise taxes and federal funding doesn’t cover all of their expenses.

“This has limited the capacity of existing programs and has also made expansion virtually impossible,” said Morna Ballantyne, executive director of Child Care Now, an advocacy group. “You can’t run programs without staff, and you can’t run quality programs without trained staff.”

But for many families, the low-cost day care program has been a welcome relief.

Ms Ibarra, whose partner works as a delivery boy, was willing to spend up to C$1,300, or $970, a month on her 18-month-old son, Ethan, the normal tuition fees at the daycare where she is enrolled.

Paying about $600 a month, she said, “made returning to work a very easy option” and allowed her to build up savings.

Roopal Khandelwal moved from Delhi to Toronto in February when her husband got a new position in his company. They have a 2-year-old son, Avik, and are expecting a second child in August.

Finding discounted daycare for Avik means Ms Khandelwal, 32, a digital marketing specialist, can go back to work.

“I have a big two-year break in my resume,” Ms Khandelwal said. “I can’t wait to give my career a fresh start.”