Comparing Then and Now: Child Care and Child and Family Benefits

Here’s a quick summary of some key conclusions from my new study published by IRPP today – Early Learning and Child Care in Canada: Where Have We Come From, Where Are We Going?



Child care spacesPositiveThere were a lot more licensed child care spaces in 2019 than there were in 1986 — 7 times as many — serving a fairly stable number of children.
Children in centre carePositiveThe popularity and acceptance of licensed centre-based child care has increased dramatically. Back in the early 1980s, only about 10% of preschool children of employed mothers used centre care, 40% were in informal paid care and about 50% were cared for by family members. In 2019, about half of preschool children of employed parents were in centre care, 20% in paid family child care and 30% cared for by family members.
Full-day kindergartenPositiveKindergarten in public schools has moved from mostly half-days during the school year for 5-year-olds to being widely available for full schooldays to 4- and 5-year-olds.
Mothers in the workforcePositiveLabour force participation of mothers has increased substantially since 1986. For instance, in 1986 the labour force participation rate for mothers with the youngest child 3 to 5 years of age was 62%. Now, it is 78%. This is still below rates in Quebec or for mothers with older children.
Child care feesNegativeChild care fees have risen substantially over the period from the mid-1980s. In fact, using preschool fees as the marker and adjusting for inflation, typical child care centre fees are over $3,000 more expensive in Ontario, Alberta and Nova Scotia, and more than $2,000 more expensive in British Columbia and New Brunswick. Quebec and Manitoba have been notable exceptions.
Staff-child ratiosMixedIn most provinces and territories, legislated staff-child ratios for centre care have not changed very much since 1986. Quebec’s staff-child ratios for children younger than 3 years are the worst across jurisdictions. The only province or territory to have gotten pretty consistently worse in staff-child ratios from 1986 to 2019 is Alberta.
Funding for low-income familiesMixedFunding of child care services across Canada has changed dramatically over the years. Back in 1986, the main federal funding instrument was the Canada Assistance Plan, which funded child care subsidies. All provinces and territories had child care subsidy payment systems targeting lower-income families and children. More than half of all child care funding came in the form of subsidies — often much more than half. Nowadays, Quebec no longer has a child care subsidy program of this type. In other provinces and territories, child care subsidies now comprise about 40% of total funding. However, there were approximately twice as many children receiving low-income child care subsidies in 2019 as in 1986 (176,738 compared to approximately 82,000)
Funding for operatorsPositiveDirect operational funding to licensed/regulated child care services — to lower fees, to raise wages, to improve quality — was in 2019 a very substantial proportion of all funding. It was nearly 100% of Quebec’s funding, and 50% on average in other provinces and territories.
Child care expenses deductionPositiveThe Child Care Expenses Deduction allows earners to deduct work-related child care expenses from income before taxes are assessed. In 1986, the claimable limit was $2,000 per child. Now, limits are $8,000 annually for children 0 to 6 and $5,000 annually for children 7 to 15 years.
Maternity and parental benefitsPositiveParental benefits have changed very dramatically since 1986. There were no legislated parental benefits at that time, only 15 weeks of maternity benefits under Unemployment Insurance. Now, Quebec and the rest of Canada have different maternity and parental benefit schemes, offering different levels of income replacement and different amounts of benefits reserved for the non-birthing parent. The total length of benefits — maternity, parental, paternity — can exceed a year, and can now include self-employed parents.
Child care educator wagesMixedChild care staff were poorly paid in 1986 and they are still poorly paid. Data on child care workers’ compensation are sketchy, but the evidence suggests that child care wages have improved and that wage enhancement grants in various provinces and territories have had some effect. But the picture is uneven. In some of Canada’s largest provinces, where the bulk of child care educators are located, and compared with the average hourly earnings of other workers, the movement in wages over time has been small.
Federal child benefitsPositiveFederal child benefits are, without doubt, larger than they were in 1986. These benefits provide between $5,000 and $7,000 per child (depending on age) to families with low incomes and some amount of child benefits to nearly all families. These benefits have had an impact on child poverty and are a very significant boost to income for families with very low incomes.

What Should We Look for in Ontario’s Child Care Agreement?

How should we judge whether the new Ontario child care agreement with the federal government is a good one?  There are many things to look for; I’ve written about this before.  Yet, if I boil it down, the key concern is how quickly Ontario is able and willing to expand services – moving towards a quality universal system of child care for preschool children. 

There are two issues here.  First, does Ontario have an ambitious plan to expand not-for-profit licensed capacity?  We know that Ontario will eventually need between 200,000 and 300,000 additional child care spaces.  We also know that even with no additional funding from the Ontario government, there is enough federal money to expand by at least 100,000 spaces in the new four-year agreement.  Without dramatic expansion NOW there will be shortages and long waiting lists.  Without substantial expansion, lower income families will be pushed to the back of the line and employment barriers for mothers will still be high. Ontario’s target should be at least 150,000 spaces over the term of the agreement.  Anything less will be a big problem. 

The second issue is really the first issue (in priority).  Expansion cannot happen without more trained early childhood educators.  An early childhood educator must have a two-year college diploma and related practicum experience.  All jurisdictions across Canada are short of fully qualified educators already and we will need a minimum of 20,000 more in Ontario for capacity to expand.  It will not be possible to expand the supply of trained educators and maintain quality services without improving salaries and benefits substantially.  Does the new Ontario agreement have substantial up-front money flowing to increase staff compensation?  If not, you know the government is not really serious about moving towards universal affordable high-quality care.

There are two things we know will be in the Ontario agreement, because they form the federal government’s bottom line.  There will be a cut in licensed child care fees to 50% by the end of December 2022.  And Ontario will agree that fees will be down to an average of $10 a day by the end of 2025-26.  But is there a plan to deal with the very large increase in demand this will create?  Is there capital money in grants and loans?  Is there up-front money to help municipalities and non-profit providers jump into the development process now?  Ontario’s Action Plan should answer this.  If it doesn’t, Ontario has been wasting the year they waited to sign the agreement.

It’s about time that Ontario signed up and started working on affordability, availability, quality, and inclusivity.  Better late than never. But I am concerned that Ontario is only worried about pinching pennies and has not done the work to plan for transforming Ontario’s child care system to meet parents’ needs.

My Recent Presentation on Child Care Affordability

The Institute for Gender and the Economy recently sponsored a workshop on Care Work in the Recovery Economy. I did a short presentation with slides looking at Alberta’s new child care policies – following on the funding agreement with the federal government. Do the new policies get us to $10 a day? Are low-income families still disadvantaged with the burden of child care costs? I thought you might like to see the slides and draw conclusions.

And how about this neat graphic provided to me after the workshop by the workshop organizers!! It summarizes some of my main themes.


I like Armine Yalnizyan.  Usually, I agree with her.  But I don’t appreciate her recent sympathy for Doug Ford ( ).  She sympathizes with Doug Ford’s reluctance to sign an agreement with the federal government to get billions of dollars per year to make licensed child care more affordable and more accessible for Ontario families.  She agrees with Doug Ford that there is not enough money in the pot to lower fees on existing child care spaces AND expand child care capacity.

But she’s wrong.  There is enough money on the table to take giant steps towards making child care both affordable and accessible in the next five years.  After all, right now Ontario only spends about $2 billion per year on licensed child care.  By 2025-26, the federal government will be providing over $3 billion of additional funds for Ontario to spend on child care.  That more than doubles Ontario’s child care spending.  Come on, Ontario!  Sharpen your pencils!  Can’t you figure an intelligent way to spend an extra $3 billion per year making child care more accessible and affordable for Ontario families?

Yes, it will be tough.  Child care is expensive in Ontario, so cutting fees in half and then getting them down to $10 a day will be expensive.  I estimate that it will cost just over $1 billion per year to cut current fees by half for existing child care spaces.  And I estimate that the net cost of lowering fees on existing spaces to $10 a day will be just over $1.5 Billion.  I’ve shared these calculations with Armine.  That’s a lot of money, but over the next five years, offering existing child care spaces at $10 a day will eat up only about one-half of the cumulative total of $10.2 Billion that Ontario will get from the federal government over that time.  That leaves half of the federal money to devote to expansion and to lowering the fees on new spaces down to $10 a day.  And to increasing staff compensation so that new qualified staff can be recruited and existing staff will stay in the sector. And to all of the other aspects of building an affordable, accessible, high-quality system of child care in Ontario. 

I calculate that the operating funding to lower fees to $10 a day for 100,000 new child care spaces would be about $1.2 Billion annually.  That would bring Ontario’s coverage rate up to 47% – there would be capacity for 47% of all Ontario children 0-5.   That’s not the 59% coverage that some other provinces – but not all – have promised.  But 47% in Ontario means a lot more children have access to early childhood education than 47% would mean in other jurisdictions.  Fortunately, we have very good full-day kindergarten for 4- and 5-year-olds.  This was the same full-day kindergarten that Doug Ford wanted to dramatically downgrade back in 2019-2020. ( ).

In fact, Doug Ford has a pretty poor record when it comes to supporting good-quality affordable early learning and child care.  When he came into office back in 2018, he immediately cancelled Kathleen Wynne’s decision to proceed with providing free child care to preschool-age children.  That would have cost about $1.6 Billion of provincial money.  In its place, he devised the Ontario Child Care Tax Credit to provide a sprinkling of expenditure relief for the use of any type of child care.  That provided very little support for families and did nothing to build a child care system.  And then Ford and his ministers made plans to weaken full-day kindergarten but backed off at the last minute when they read the polls about how popular full-day kindergarten is.   So, I don’t trust Doug Ford’s motives in delaying signing a child care agreement – he is not my child care knight in shining armour.

The federal government is offering provincial/territorial and Indigenous governments enough money to go a long way towards building an affordable, accessible Canada-wide child care system.  Families need it; children need it – it’s time for Doug Ford to stop playing games and sign up for child care.

$10 a Day Child Care Will Dramatically Reduce Employment Barriers for Parents

A major new study ( ) addresses the question of whether the $10 a day program will truly improve child care affordability and reduce barriers to employment for families.  It was written by economists Gordon Cleveland and Michael Krashinsky from the Department of Management at University of Toronto Scarborough.

Their study focuses on the situation facing couple families with one infant child and one preschooler in each of the three provinces at different possible levels of income.  The authors’ main conclusion is that the $10 a day program can and should dramatically change child care affordability and make employment a worthwhile option for many caregiving parents.  However, even if provinces and territories adopt a flat fee of $10 a day, they will need to have some kind of sliding scale to ensure that low-income families are not disadvantaged.

On the basis of this work, Dr. Gordon Cleveland says

  • “Ontario should sign a funding deal soon with the federal government; if they don’t reach an agreement by early next year, Ontario will lose about $1 Billion in child care funding.”  
  • “Our work shows that child care costs are a very large barrier to employment for many two-parent families, and that $10 a day child care will dramatically reduce those barriers.” 
  • “To reach an agreement, Ontario needs to develop a child care Action Plan.  That plan needs to include support for dramatic expansion of non-profit child care – at least 150,000 spaces over 5 years.   It needs a plan to phase-in more affordable child care, so that supply and demand increase together.  And it needs plans to pay early childhood educators more so we can recruit more trained staff now.”

Finance Minister Chrystia Freeland’s April Budget is spending $30 Billion over 5 years to make child care affordable enough to eliminate this major barrier to the employment of mothers of young children across Canada. As of December 2021, nine provinces and territories have signed on to the $10 a day early learning and child care program, with Ontario being a notable holdout.  This timely study seeks to determine whether the $10 a day policy gamble is likely to work, and what kind of funding reforms will make the effects more equitable.

Specific conclusions of the study include:

  • Under current policies, if a couple family with two children cannot access subsidies in Ontario (and most cannot) licensed child care at any income level is remarkably unaffordable. 
  • If Ontario offered licensed child care at a flat fee of $10 a day per child along with the existing tax credit, a couple family with two children would pay less than 15% of the caregiving parent’s income contribution in child care fees, no matter what their income level.  The child care cost barrier to employment would be dramatically reduced.
  • Alberta’s new funding policies agreed to with the federal government will improve affordability, particularly for families at higher levels of income.  Alberta plans to offer substantial operating grants to child care centres and homes to allow them to lower parent fees.  And Alberta is extending its subsidy system to cover families with partial subsidies out to $180,000 of family income.
  • The combination of grants and subsidies will still leave Calgary couple families with two children giving up more than 30% of net extra employment income if the caregiving parent earns less than $44,000 (family income of $110,000).   In other words, child care will be unaffordable for these families even when Alberta’s new child care policies are fully implemented. 
  • Edmonton families will be better off than Calgary families because median fees start off at a lower level before the new funding programs.  Only families where the caregiving parent earns less than about $18,000 (family income of $45,000) will find child care unaffordable (30% or more of the net income contribution of the second earner).
  • Manitoba pioneered flat fees for child care, and operational funding to lower fees.  However, its positive reputation is not supported by measures of current child care affordability. 
  • A flat fee of $10 a day per child (with no subsidy system) would improve affordability for nearly all couple families with two children in Manitoba except when the caregiving parent’s income is $14,000 or below.    However, a flat fee will mean that affordability is always worse for families the lower their income.