Relying on the private sector can make sense in competitive markets. The selfish pursuit of profit is counterbalanced by the force of competition, so that results may be socially positive.
But some pursuits don’t work well when dominated by private interests; early learning and child care is one of them. The counterbalance of competition isn’t there and guardrails need to be established to ensure socially positive results. Child care in Canada already has substantial amounts of for-profit child care – more than half of the providers in a majority of provinces are commercial operators. The Canada-Wide Early Learning and Child Care program has declared that child care is more like education and less like manufacturing cars, so we should bend the curve back towards non-profit and public child care. The care of children while parents work and study is of intense public interest and governments need to make sure it is done well.
In the last 5 years, we made a good start in transforming Canada’s child care system. Much lower fees, expanded services, new funding systems, higher wages for educators. Nearly a million children benefitting from better access to affordable child care.
The provinces and territories signed agreements setting up guardrails about how the new child care system should be developed – expansion prioritizing vulnerable and underserved families, focus on improving staff wages and conditions to enable recruitment and retention, emphasis on expansion of not-for-profit and public services to prioritize quality and service stability, fees dropping to an average of $10 a day.
But now, if rumours are right, many provincial and territorial ministers responsible for early learning and child care want to get rid of many guardrails. And If they don’t get what they want, they might pull out entirely! They want “flexibility” – where flexibility is code for getting rid of any of the guardrails these provinces and territories don’t like. The biggest guardrails are restrictions on the percent of expansion that takes place in for-profit operations, restrictions on the amount of profit that can be earned, and prioritization of expansion in vulnerable and underserved communities. The for-profit lobbyists don’t like these guardrails. But they are important if we want a stable high quality child care system that serves those in need and everyone else.
It’s true that we have big shortages of child care spaces and of qualified early childhood educators. And there has been considerable policy and program work for provinces and territories as new rules have been developed. And, in particular, the system needs more money. Federal money and provincial money. But these are not good reasons to throw the baby out with the bathwater.
What about the “for-profit” issue? Provinces and territories are often besieged by entrepreneurs that want to make a buck selling child care services to governments willing to provide 90% of the daily revenues. It’s the path of least resistance to change the rules and let for-profit entrepreneurs dominate in provision of new services. What could possibly go wrong?
We have been running a sort of natural experiment in Quebec for nearly 30 years to give us answers to that question. Quebec faced a big shortage of child care in the early 2000s and decided to invite in the for-profit sector. In 2022, the former Minister of Families, Mathieu Lacombe talked to the Globe and Mail’s Andrew Gee about the experience. “Allowing for the expansion of private daycare, he said, was the ‘biggest mistake the Quebec government committed in the last 25 years.’”
Quebec’s Auditor General Report from 2023-24 provides the evidence to explain this conclusion: the quality is much worse in Quebec’s for-profit centres, and part of the reason is that for-profit centres often find ways around regulations about using fully-qualified staff. Provinces and territories think that since regulations apply equally to for-profit and non-profit child care, both will provide the same quality of services to children. Quebec’s experience and a mountain of academic and policy studies suggest otherwise.
Federal, provincial and territorial ministers need to find more operating money for building the system, and capital money for expansion, but keep guardrails in place in new Action Plans. Ontario was able to double its kindergarten capacity in five years in the early 2000s. That same kind of public effort should go into doubling child care capacity now. Parents and children will thank you for building on a sound foundation rather than on sand.