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.
On December 3rd, I sponsored a small webinar providing an assessment of how Ontario -the province I live in – is doing in the implementation of the Canada-Wide Early Learning and Child Care program (CWELCC).
It’s a bit of a misnomer to call it “Canada-Wide” because every province and territory is implementing this program differently. Some are making good progress, others not. So, I wanted to figure out for myself how I would judge Ontario’s efforts so far.
I sent out two slide decks to participants. The first reviews the basic regulations and the structure and responsibilities of institutions responsible for different aspects of ELCC in Ontario. The second slide deck pulls together evidence about progress implementing CWELCC in Ontario.
There is a caveat to this presentation. A couple of days after the webinar, Ontario posted its 2025 annual report on early learning and child care in Ontario, which can be used to update some of the data I present in this webinar. I haven’t taken this new report into account in this presentation.
56% of children 0-5 years of age across Canada use some form of non-parental child care on a regular basis. This is the finding of a large parent survey – Statistics Canada’s 2023 Canadian Survey on Early Learning and Child Care. However, nearly 980,000 or 44% – are cared for exclusively by their parents. This seems surprising to many, and apparently contrary to the notion that families need child care when their children are young. However, when the data are looked at more closely, some of the reasons become clear.
In the first year, or sometimes the first eighteen months of a child’s life, many parents are eligible for paid maternity and parental leave in order to spend time with their newborns. According to the Statistics Canada data about 270,000 children or 12.1% of all 0-5 year-old children have a main caregiving parent who would normally be employed during the day, but is currently on maternity or parental leave.
There are another 235,000 children, or 10.7% of the total who are 4 or 5 years of age and currently attend a different form of early childhood education – kindergarten – for much of each weekday. Kindergarten is not considered to be a child care arrangement by Statistics Canada, but kindergarten does provide care for children. The large majority of kindergarten arrangements across Canada now cover the full school day, and often for 4- year-olds as well as 5-year olds. Sometimes, before-and-after-school child care is available for these children, but not always at a low parent fee. Many parents are able to adapt their work or school schedules so their children do not need any non-parental care other than kindergarten.
Another 475,000 children – 21.1% of all 0-5 year-old children – do not have parents on leave and are not in kindergarten, but in any case are cared for entirely by their parents. Close to half of these children – about 202,000 – have a main caregiving parent who is currently employed. Parents may cover child care needs while they are at work through off-shifting between parents (parents working or studying different shifts so one can always be with the child). Or one parent could be providing care while working from home. About 55,000 of these children were on a waitlist for child care in 2023.
A bit more than half of these children – about 269,000 – have a main caregiving parent who is not currently employed. About 41,000 of these children were on a waiting list for child care.
In sum, the picture of children in parent-only care is a complex mix of different situations in which parents currently do not use child care. Many of these children will use or have used child care and kindergarten at different ages, but are not currently using child care.
CHILD’S AGE
The likelihood that children participate in licensed child care is strongly affected by the child’s age. Only 24% of children who are less than two years of age (0-1 years) currently use licensed child care. This is, perhaps, unsurprising because so many parents take a year (or in some cases, eighteen months) of paid maternity and parental leave when children are first born.
However, 55% of Canada’s children who are two or three years of age are in licensed child care. When children are four or five years of age but not yet in kindergarten, 68% currently use licensed child care. For children who are four or five years of age and are currently attending kindergarten during the day, 33% use licensed child care.
The use of parent-only care also varies strongly by child age. 62% of children who are less than two years of age (0-1 years) are cared for only by their parents. This falls to 30% when children are 2-3 years of age and 22% when children are 4-5 years of age and not yet in kindergarten. For 4-5 year-olds who are already in kindergarten (full-school-day in most provinces), parent-only care is the main complement to kindergarten for about 51% of children.
According to recent data, 938,200 children are regularly attending licensed or regulated child care services across Canada (not including the Territories). That is about 42% of Canada’s children 0-5 years of age who used licensed child care as their main care arrangement in 2023. A much smaller proportion of these young children (6.8% and 7.4%) respectively) are using unlicensed child care provided by a non-relative or care by a relative as their main arrangement.
The data comes from Statistics Canada ‘s Canadian Survey of Early Learning and Child Care, which collected data about child care arrangements from nearly 30,000 parents in 2023. The Public User Microdata File gives us the results shown here.
Nearly 44% of children 0-5 (982,910 children) are, for various reasons, not currently in child care. Close to half of these are children whose parents are currently on maternity or parental leave or are 4 or 5 year-old children attending kindergarten, often for a full school day.
Licensed child care is now the dominant type of child care arrangement that parents choose for their children 0-5. Of children using any type of non-parental child care arrangement, 75% use licensed care.
This week in the Hill Times, Peter Jon Mitchell says he wants to get rid of the $10 a day federal child care program. But too many families now love it and depend on the increased child care affordability that has made their lives better. So instead Peter Jon argues that the Canada Child Benefit or the Child Care Expense Deduction should be amended to provide child care assistance to those who can’t find child care. But neither solution would be much help. The Canada Child Benefit goes to nearly every family independent of whether they want to use any form of child care so this would be a very expensive way to deliver assistance. And the type of tax credit that Peter Jon would use to replace the Expense Deduction has been an unmitigated disaster for child care quality in Quebec, as the charts below show.
Peter Jon hopes to convince us that the federal child care funding program is a complete failure and shambles, so he throws as much mud as possible at the wall to see if any of it will stick. He has these complaints about the program:
Space creation is difficult because the child care agreements favour expansion predominantly in the not-for-profit/public/family child care sector
Many existing licensed spaces are empty or not operating
Most children under six years of age don’t benefit from the program
Only 71% of centres are in CWELCC – the federally funded program
The program breeds inequality. Child care enrolment by low-income families is declining – by 31% in Ontario.
Not-for-profit
The not-for-profit issue has been tested in practice. As Peter Jon reminds us “Quebec’s daycare program, upon which the CWELCC is modelled, has long depended on private, for-profit childcare businesses.” It’s true that since about 2010, Quebec has relied on a tax-credit-funded expansion of for-profit child care operators. There are three types of centres in Quebec. There are the CPEs which are not-for-profit community-based centres that charge a flat fee less than $10 a day. There are the funded for-profit child care centres (shown as GS on the charts) that also charge the low flat fee. There are the tax-credit-funded child care centres that grew since about 2010, shown as GNS on the charts.
The first chart shows us the results for on-site quality evaluations by the Ministry. The other shows us the percent of centres that fail to meet the current requirements for fully-qualified staff (which is one out of every two staff). Together they indicate that for-profit child care, which seems to be Peter Jon’s preference for the rest of Canada, is much lower in quality and cuts costs by avoiding hiring the required numbers of qualified staff, compared to the not-for-profit CPEs.
So, yes, there are good reasons to want space creation to take place predominantly in the not-for-profit and public sectors. Relying on for-profit expansion may seem faster and cheaper in the short run, but at what cost for our children’s future?
Enrolment
It’s true that there are too many existing licensed spaces that are empty or not operating. The Auditor General of Ontario found this was true of 27% of the funded spaces in Ontario, but it is also true elsewhere. The substantial majority of this is due to staffing shortages. Early Childhood Educators in most of Canada require a college education to be a fully-qualified educator, but they earn wages that are surprisingly low. As a result about half of all new hires in child care do not stick around for very long. Recruitment and retention of staff both fall well behind what is needed.
However, empty spaces suggest a solution different from Peter Jon’s – raise educator wages and benefits closer to the average wage in the province or territory. I’m sure that many trained educators currently working in retail and elsewhere will come flooding back to allow the spaces to open. Families would be happy, educators would be happy and the child care system would be more stable. The number of parents having difficulty finding child care would drop fast.
How many children benefit?
Peter Jon says that most children in Canada don’t benefit from CWELCC. CWELCC is intended to be a universal program, but that doesn’t mean that everyone will want to use child care from their child’s birth through until school. Many families take a year or more off after a child’s birth using maternity and parental leave to spend time with their infant. Many families live in jurisdictions with full-day kindergarten, sometimes for both four and five year olds and don’t need additional child care beyond that. Some parents want to stay home with their young child and do not need child care.
If we looked only at families where the main caregiving parent was employed, was not on maternity/parental leave, and whose child was not in kindergarten, then already in 2023, 62% of Canadian children were enrolled in and attending some form of licensed child care across Canada, most of it receiving federal funding. We still have a way to go to serve all children who need or want good quality affordable child care, but we’re much farther forward than Peter Jon says we are.
Is it true that nearly 30% of centres are not in CWELCC?
In fact, there are very few eligible centres not enrolled in the CWELCC program. Mr. Mitchell should be more careful with his “facts”.
The source he cites looks at centres serving children 0-12. This data source says that only 71% of centres said they were enrolled in CWELCC. But many of these centres serve only school-age children and these centres are not eligible to get federal funding, which is only for children 0-5.
Ontario is the province (outside Quebec) with the largest number of centres that are not part of CWELCC and as of March 31, 2025, 91.8% of all centres serving children 0-5 in Ontario were enrolled in the CWELCC program.
Child care enrolment by low-income families
This is a serious issue, but Peter Jon misunderstands it. It is true that the Auditor General of Ontario recently found that the number of children receiving child care subsidies in that province has declined by 31%. But that is compared to 2019 before CWELCC started, and the decline in subsidies before Ontario signed onto CWELCC was more rapid than since that time.
There is a legitimate worry that not enough low-income families will be able to access newly available spaces. The Auditor General cited favourably a program in one region where a percent of spaces in each centre are reserved for children receiving child care subsidies. This might be a useful reform that I hope Peter Jon would support. Already, there has been a strong prioritization for child care expansion in Ontario to favour underserved areas with more vulnerable populations.
However, rather than look only at subsidies, there is more comprehensive data on child care use by family income that comes from a 2023 parent survey done by Statistics Canada. Here’s what it shows:
The data suggests, yes, that access to licensed child care by lower income families is not as high as for the more affluent. But the differences are probably smaller than you thought they were. I don’t mean to minimize the issue. Most studies show that children from lower-income or vulnerable families are especially likely to benefit from quality child care. So working on this issue is a high priority. However, the sky is not falling. It is just a persistent problem that provincial and territorial child care systems need to address. In fact, it is a persistent problem in child care systems, no matter how they are funded, often less so the more universal the service is.
Instead of trashing the $10 a day child care program, maybe Peter Jon Mitchell should spend his time lobbying the Alberta Government to re-instate the child care subsidy system that they completely eliminated this year! This will definitely hurt lower and middle income families in Alberta. The Alberta Minister complained at the time that federal funding regulations did not allow him to fund a targeted program like child care subsidy. However, he had a subsidy system receiving federal funding ever since signing the CWELCC agreement with Ottawa, and nearly all other provinces have child care subsidy systems, so that excuse is untrue. Alberta should re-instate its subsidy system as part of its CWELCC funding.
What is to be done?
The $10 a day child care program is only partly developed and is far from perfect. Much more affordable licensed child care is now wanted by many more parents. Of course. And expansion of services is too slow. There is little capital funding and too little planning for expansion of not-for-profit child care. Also, crucially, child care wages in most provinces are too low to attract qualified educators.
Making child care more accessible is central to the health of the program. I hope Mark Carney recognizes that in the upcoming budget. After all, isn’t a universal child care system a pillar of the new economy that families with children need – the kind of nation-building project that will make Canada stronger, fairer, and more affordable?
By Martha Friendly, Executive Director, Childcare Resource and Research Unit, and
Gordon Cleveland, Associate Professor of Economics Emeritus, University of Toronto Scarborough
Many more children are in licensed child care (especially centres) now than before the $10-a-day program
In 2023, 177,900 more 0-5 year olds were reported by Statistics Canada to be in child care centres than at the end of 2020 just before the $10-a-day program began.
Nearly a million Canadian 0-5 year olds already benefit from low-fee licensed child care
938,000 children are using licensed child care that is eligible for the $10 a day program, according to 2023 Statistics Canada. If we add four and five year olds in kindergarten, and children at home with parents on parental leave, a total of 1.5 million young children are benefitting from public programs that support the care of young children as well as mothers’ employment and family incomes.
There is considerably more licensed child care than ever before
Between 2015 and 2023, the number of child care spaces for children 0-12 grew by 426,203 to a total of more than 1.6 million licensed spaces, despite the negative effects of the pandemic on child care services and mothers’ employment.
For the first time ever, child care has been made affordable for parents across the income spectrum
In eight provinces and territories (including Quebec), parents now pay $10-a-day or less for licensed child care. In the other jurisdictions, fees have been substantially reduced by provincial/territorial fee reduction or are provincially set. The fee changes mean that parent fees are between one-sixth to one-third of the fees before the $10-a-day program, depending on the province/territory. In addition, all provinces and territories except Alberta have fee subsidy programs to lower child care fees further for parents with particularly low incomes.
Waitlists for licensed child care were always long but have grown Although nearly a million Canadian children are benefiting from low-fee child care, there are too few licensed spaces and many families are still on waiting lists. Nearly 50% of child care users reported difficulty finding a space in 2023— about 10% more than the nearly 40% reporting difficulty finding care in 2020 before the CWELCC program began.
Many employed families who use other child care arrangements can claim financial assistance from the Child Care Expense Deduction, and most families with young children also receive the Canada Child Benefit – income support to help families with child rearing costs.
There is good agreement that provinces and territories must speed up expansion of spaces and hiring of qualified staff to reduce waitlists. To support this, federal government has made $625 million for child care infrastructure available to provinces and territories and allocated $1 billion of low-interest loans and grants for child care expansion to be distributed by the Canada Mortgage and Housing Corporation.
The $10-a-day child care program is very popular with parents, so demand for licensed child care, especially centres, is high.
Already in 2023, three-quarters of children in any form of non-parental child care were in licensed child care. On top of this, a majority of those not currently using any non-parental child care said they would like to use it too. Of these, 62% would prefer to use a child care centre.
For-profit providers are not being driven out of business
Mr. Poilievre claims that for-profit child care providers are being driven out of business. Agreements signed between the federal government and the provinces and territories included all existing child care providers willing to lower parent fees and provide accountability in exchange for very substantial, reliable public funding.
For-profit providers unwilling to participate in the low-fee program may set their own fees instead of relying on government funding. The agreements with provinces and territories specify that new spaces should be primarily in not-for-profit or public centres or in licensed family child care homes. This protective provision is intended to ensure that higher profits should not be the predominant rationale of a system of publicly funded services for children and families.
Pierre Poilievre’s “freedom and flexibility” child care policy would raise child care fees
Opponents of publicly funded universal child care claim that the $10-a-day plan is a bad idea—“a massive top-down bureaucratic system”, “one-size-fits-all”, and “worse today than when the Liberals took office”, arguing instead for payments to parents. Pierre Poilievre’s alternative is “more flexibility and freedom for parents, provinces, and providers”.
In other words, Mr. Poilievre’s alternative would allow provinces to eliminate the $10 a day program. Instead, providers will have the flexibility and freedom to set their own parent fees, and provinces will have the flexibility and freedom to use federal funds to support unregulated child care or favour for-profit operations. Slashing red tape will mean child care providers will no longer need to account for how they spend billions of dollars of funding.
Mr. Poilievre’s alternative is to go back to the previous scarce-space, high-fee, market-model child care. This didn’t work during the nine years in which the Harper government (of which Mr. Poilievre was a member) tried out its market model, and it won’t work now.
Many Canadians do not seem to realize that funding child care with tax credits would mean having no control over child care fees. Plus, there would be no financial accountability by operators for the public money they receive. Right now, child care fees are controlled in Canada – in eight of Canada’s thirteen jurisdictions, the fee is $10 a day. By April 2026, parent fees will be limited to $10 a day across the country. If we switched to tax credits (as the Conservative Party recommended in the last election), there would be no limitation on parent fees and no financial accountability for billions of dollars of public money. Child care operators could charge whatever the market would bear. And so, for many families, child care would be unaffordable once again.
I’m in Australia right now. It’s a gorgeous, sunny country with great restaurants, stimulating and dependable coffee, and very friendly people. But they have problems with their child care system that we can learn from.
You can give money to parents to fund their spending on child care; mostly, that’s what Australia does. Or you can fund the services to ensure that they will be available and affordable; mostly, that’s what Canada now does. The first is called demand-side funding. The second is called supply-side funding.
Demand-side funding comes under different names – a tax credit or a voucher or a parent subsidy; it amounts to the same thing. Australia has a Child Care Subsidy; there are bigger subsidies for low-income families and smaller subsidies for high-income families. The payments are made to the family’s chosen child care provider (from amongst approved child care providers), based on the amount of child care used. The parents have to pay whatever child care fees are not covered by the subsidy.
Australia has a market-based child care system. There are standard regulations on employee qualifications, staff-child ratios, health and safety, and so on. But, there are no effective government controls on the fees that are charged by providers and centres can be established wherever they choose – usually where it is most profitable. The majority of providers in the system are for-profit corporations and entrepreneurs.
Australia gives Canadians a chance to see how demand-side funding works in practice. And, I would argue, Australia gives a “best case” scenario for this approach. Australians have tried very hard over the years to make this subsidy/tax credit approach work equitably and efficiently for all families and they have done a lot to promote higher quality in child care services. I would argue that if Australia can’t make a demand-side funding system work effectively to make child care affordable, accessible and of high quality, then no one can.
In this context, the November 2024 report by Dr. Angela Jackson, Lead Economist for Impact Economics and Policy is well worth a read. The report – Time to Stop Throwing Good Money After Bad – was commissioned by the Minderoo Foundation, a charitable organization founded by Dr. Andrew Forrest (former CEO of the Fortescue Metals Group) and Nicola Forrest. The report provides an assessment of Australia’s child care funding and management system.
I think the best place to start is to look at two charts that Dr. Jackson features in the report.
Figures 4 and 5 are copied from her report. Figure 4 covers the period from 1991 until 2023. What you see are two lines. One is relatively straight, showing how the Consumer Price Index has risen pretty steadily over this period of 32 years. The fiscal year 2011-12 is the base year and gets an index value of 100. Compared to that, the average price level in the economy has risen from 50 back in 1991 to 140 now.
The second (yellow) line is very jagged. It goes up, then falls, then rises rapidly, then falls. Again and again. This line shows the “out of pocket costs” of child care. Out of pocket costs are the amounts that parents actually pay for child care after accounting for the child care subsidy they receive. When government increases the subsidy, the out of pocket costs go down. When fees charged by child care operators rise but the subsidy stays the same, then out of pocket costs rise.
In the battle between rising child care fees and increasing levels of subsidy, child care fees have been winning. Overall, the amounts paid by parents have been rising faster than inflation despite subsidy increases.
In Australia, there were major infusions of funding and reform of child care policy in 2000, 2007, 2008, 2018 and 2023. In 2020, during the pandemic, child care services became free for those continuing to use them. We can see each of these events on the chart as a sudden drop in the yellow line.
But none of these funding infusions have stopped the upward march of child care fees. Out of pocket costs of child care have increased quite a bit faster than inflation over this 32 year period DESPITE many government attempts to improve tax credit/parent subsidy funding arrangements to make child care more affordable. Child care has become, on balance, less affordable, not more affordable. In 2023, after Child Care Subsidy is accounted for, the average out of pocket cost of child care for parents in Australia was $44.42 per day (or over $11,500 per full year).
By how much have child care fees risen over this time period? Figure 5 provides this information. It includes the two lines from the previous figure but adds a new one. This third (red) line, rising above the other two shows the amount by which the cost of child care to parents would have risen had there been no improvements in child care subsidization. The underlying costs of child care have risen by 499.9% over this period – much much faster than the rise in consumer prices! In 2023, before subsidy, the average child care fee for full-day care in Australia was $133.96 (or nearly $35,000 for a full year).
This pattern continues to this day. As Dr. Jackson notes, over the last 12 months child care fees have increased by 10.6%, which has eroded the benefits of the new $5 billion child care expenditure program begun in July 2023.
“when government subsidies increase, out of pocket expenses decline sharply in the immediate term, but then quickly revert to levels preceding the subsidy change.”
Is this pattern a glitch? Or is it a feature that we should expect to observe if Canada were to adopt a tax credit system for funding child care? Those who support tax credits emphasize parent choice and flexibility. What they do not tell you is that tax credit systems mean that there is NO CONTROL over the fees charged by child care providers. There is no regulation of the decisions that corporations and entrepreneurs make about where to locate their services. And further, there is no requirement that child care providers account for the ways in which they spend the billions of dollars of government money they will be receiving when subsidized children attend their facilities.
With a tax credit system, additional government spending largely benefits providers, not families. True enough, this very generous funding system has encouraged providers to expand. There were enough centre-based spaces for only 7% of Australia’s children 0-4 years of age back in 1991 and there is now coverage for 42% in 2022.
Since there is little control over where providers locate, access to child care is concentrated in wealthier areas where providers can charge higher fees. 24% of Australia’s households with children are located in child care deserts.
The large majority of providers in Australia are for-profit enterprises. And for-profit providers have been found, in Australia as elsewhere around the world, to provide lower quality child care on average. Australia has put a lot of resources into measuring quality of services. Their quality rating system has five result categories: Significant Improvement Required, Working Towards National Quality Standard (NQS), Meeting NQS, Exceeding NQS, and Excellent. 35.4% of not-for-profit providers are rated as Exceeding NQS or Excellent. Only 12% of for-profit providers reach the same levels. Further, for-profit providers have been found to be half as likely to increase their quality ratings over time as the not-for-providers are.
Viewing the Australian experience with a Canadian lens, the tax credit approach has many weaknesses. In a tax credit system, the only way to make child care affordable for parents is through substantial infusions of government funding. However, if substantial government funding is combined with providers having the freedom to set and change their own fee levels, then the result will be rapidly rising fee levels and reduced affordability. On top of that, there is no requirement for child care operators to account for how public money is spent.
In theory, competition among providers is supposed to bring fees down and force providers to offer better quality of care. In practice, competition is very imperfect, partly because child care markets are very localized, so few providers compete directly with each other. Competition is also imperfect because parents can only perceive and evaluate child care quality imperfectly.
So a tax credit or voucher system pushes up child care costs, profits and fees but delivers child care that is expensive for governments, unaffordable for many families and very uneven in quality. Governments get into a cycle of additional spending to bring out of pocket costs down, then watching as provider fees rise to make child care unaffordable once again. Whatever its growing pains, $10 a day child care is a much better bet than tax credits to provide affordable, accessible, quality child care.
However, Supplementary Subsidy Funding Plays A Positive Role Most Canadian provinces and territories have child care subsidy systems that are supplementary to their main way of funding child care. The effect of this is positive. The main funding is on the supply side – funding to operators in exchange for child care services made available to families. On top of that, most provinces and territories have a subsidy system that can lower the parent fee from $10 a day (or, currently, a higher fee in five Canadian jurisdictions) for low-income or multiple-child families that cannot afford $10 a day. Most of these subsidy systems are imperfect, but they serve the very important purpose of ensuring affordability for all families, even those who cannot afford current reduced fees.
It’s Family Day in Alberta today (February 17th). And Matt Jones, Minister responsible for child care in Alberta, apparently wants to celebrate by making plans to leave the child care agreement that will bring $15 a day child care to the province on April 1st. And he wants to blame the federal government while he does it. But the truth is, most decisions about child care in Alberta are entirely in the hands of the provincial government.
Take the cancellation January 30th of Alberta’s child care subsidy program that helps low-income families. Matt Jones cancelled it, as part of the move to a flat child care fee of $15 a day. He didn’t have to do that. Every other province and territory outside Quebec has a child care subsidy program targeted at low-income and otherwise vulnerable families as part of their move to $10 a day. Alberta’s agreement with Ottawa committed to an “average fee of $15 a day” in 2024-25, not a flat fee of $15. Why did Alberta have to cancel the subsidy payments? No reason at all.
And then Minister Jones had the gall to say that Alberta might have to withdraw from the $10 a day program because the federal government doesn’t allow him to target support to parents that need it the most. In an interview with LakelandTODAY.ca, the Minister said: “The current federal agreement is not flexible to allow us to income test, say households earning under a certain amount of income.” Which is plainly untrue.
In a Facebook post, Minister Jones cited other reasons for planning to withdraw child care support from Alberta families. He said that the program is underfunded by Ottawa, by more than $4 billion over the next few years and that the child care agreement that Alberta voluntarily signed back in November 2021 is “unfair to the majority of child care providers”.
This week the federal government offered Alberta and other provinces the chance to extend existing child care agreements for another 5 years and receive more money to do so. But, Mr. Jones wants even more money and he wants flexibility. And if he doesn’t get it, Alberta will pull out of the $10 a day child care program. As he puts it in government-speak, Alberta “will be forced to transition out of what is, and will be, an unsustainable program.”
In 2025-26, Alberta will be getting nearly $1.1 billion through this agreement to support low-fee child care. In its agreement with Ottawa, Alberta calculated that it could lower fees to $10 a day for 134,691 children for a cost of much less than that – for $829.93 million. What changed? Unless Alberta child care costs are completely out of control, there should be enough money right now. So, why not sign on to continue the program?
Minister Jones real reason for being willing to take away your low-fee child care comes down to “flexibility”. “Flexibility” is a code word. In 2021, Alberta agreed to expand home child care and not-for-profit child care spaces by 42,500 and for-profit child care spaces by only 26,200. Two-thirds of Alberta’s child care spaces are commercial now, so extra expansion of non-profit facilities would provide some balance and choice for families. Minister Jones wants to wiggle out of that agreement. That would be called “flexibility”. Apparently, the evidence that non-profit child care services are stronger promoters of high quality is unimportant to Minister Jones.
Frankly, Minister Jones reasons for not signing on to continue the $10 a day child care plan are flimsy. I think he is in the pocket of that portion of commercial operators who want to be able to charge whatever fee they want, and earn whatever profit amount they can get away with. He might call that giving money to parents in the form of a tax credit. But we know that it means no more limits on parent fees – no more $15 a day child care or $10 a day child care. And that would mean unaffordability for parents. Not a good plan.
The purpose of the $10 a day agreements between provinces and territories and the federal government is to ensure that low-fee child care services are available to families and children when and where they want them. Not every family wants to use child care throughout a child’s early years. But most Alberta families use child care for some time as their children grow. For instance, 61% of Alberta’s children who are 4-5 years of age and not yet in kindergarten use licensed child care. Many more want an expansion of low-fee child care services. In my opinion, Minister Jones should sign on to continue the $10 a day child care funding for Alberta parents and children.
One of the main barriers to expansion of child care supply is a widespread shortage of qualified educators. This is mostly due to wages and benefits that are insufficiently high to attract and retain staff. As a result, there are long waiting lists to get into licensed child care (115,000 children with mothers whose main activity is paid work).
We do not have much good current data on our child care workforce, but Statistics Canada is attempting to begin to fill that hole. Towards the end of December last year, Leanne Findlay and Thomas Charters from Statistics Canada published a report on child care workers who care for children 0-5 years of age. The data is from 2021-22 and its source is the 2022 Canadian Survey on the Provision of Child Care Services (CSPCCS).
The authors restrict the sample to look only at centres who provide child care to children 0-5 years of age, and they address several issues:
Centre employees – hours, training and roles
Typical rates of pay
Numbers hired, departed and staff vacancies
How all of the above vary by auspice and organizational structure
There are some important findings and observations in this study. The study reports on weighted results for nearly 12,000 centres serving children 0-5. Nearly half (48.6%) of child care centres serving children 0-5 are for-profit. Centres employ nearly 137,000 staff, including full-time and part-time, program staff, supervisors, and support staff. Nearly 90,000 of these employees are in Ontario and Quebec, and close to 15,000 each in Alberta and B.C. About 38% of these staff are hired in multi-site centres and about 62% in single-site centres.
A typical centre has about 56 children and close to 12 staff. About 8 of these are front-line program staff. There are either 1 or 2 supervisors and between 1 and 2 support staff.
Staff Qualifications
Most centres (83%) have a supervisor with an ECE certificate, diploma or degree. For-profit single-site centres are below this average at 77%.
50% of centres have at least one staff member with no ECE training, and in those centres on average there are 3.7 staff members with no training. 47% of centres have at least one staff member with training of less than one year and on average in those centres there are 3.1 staff members with this modest level of training. 88% of centres have at least one staff member with a one-, two-, or three-year ECE certificate or diploma and these centres have on average 6.5 staff members with this level of training. Finally, 17% of centres have at least one staff member with a four-year ECE degree or higher and on average these centres have 4 staff members with this level of training/education.
Wages
Survey respondents provided information about the most typically paid hourly wage rates for different categories of staff. The average for supervisors was $27.80 per hour, but for-profit centres paid between $25 and $26 typically, and not-for-profit centres on average paid between $29 and $32.
The same pattern was seen for wages of staff with an ECE credential – the for-profits paid an hourly average wage of between $20.50 and $21.50. The not-for-profits paid between $22.50 and $23.00.
Unfortunately, the wage question asked respondents to include wage enhancements but not provincial top-ups when reporting on staff wages. This may have resulted in underreporting of wages in some centres. In any case, it is obvious that typical wages in the sector are rather low.
Benefits
Amazingly, only about 76% of centres report that they provide any benefits at all to centre employees! Those benefits include supplementary health and dental plans, life or disability insurance, pension plan contributions or group RRSPs, paid sick leave, paid vacation leave and financial assistance or paid time for training.
The provision of benefits varies a lot by auspice and organizational structure. Only about 62% of the single-site for-profits have any employee benefits. Between 78% and 79% of both the multi-site for-profits and the single-site non-profits offer some employee benefits. On the other hand, 93% of multi-site non-profit centres have at least some employee benefits.
The biggest gap appears to be in pension benefits. Only about 20% of for-profit centres of either kind have some pension or RRSP benefits. About 46% of single-site non-profits have these benefits and 63% of multi-site non-profits do, as well.
Vacancies
The survey also provides information about job vacancies experienced by centres. In April 2022, there were 7,560 vacancies in centres for ECE positions and another 2,960 vacancies for non-ECE positions. In other words, nearly 8% of staff positions were vacant. No wonder expansion of services has been slow and difficult. In fact, 35% of centres had at least one vacancy for an employee with ECE credentials or training.
All of these issues are good ones to look at and the authors have done a good job with the data, but there are problems that affect interpretation and clarity. In particular, the data is cross-Canada data; the sample size was too small to break responses down by province and territory.
Further, CSPCCS is not a survey of members of the child care workforce, with questions answered by each staff member. Instead, the CSPCCS is a survey of centres, so the respondent is some representative of the centre, and the responses are statements about the whole centre, not about the individual staff member. So, there is less detail than you would like in some answers. As an example, the categories for staff qualifications are (1) No ECE-related training, (2) ECE training of less than one year, (3) one, two or three year ECE certificate or diploma, (4) Four-year ECE degree or higher. So, we can’t see how many staff have certificates vs. diplomas. That’s potentially a very important difference.
The information is useful, but we still need a workforce survey where the respondents are individual supervisors, educators and assistants (and perhaps support staff as well). That kind of survey, with a large enough sample, would allow us to get more detailed information about qualifications, remuneration, and recruitment and retention issues.
Since its beginning, Canada’s plan to build a system of child early learning and child care – the “$10 a day plan” – has been panned by a handful of players. These include spokespeople for some political parties, some child care centre owners, right-wing “pundits”, and social and economic conservatives, all with their own agendas. Relying on misrepresentation of research literature, misinterpretation of public opinion polls and Statistics Canada surveys, the common agenda is to paint the $10 a day plan as a “failure” and “disaster” rather than the first largely successful phase of a Canada-wide project to build a workable child care system for all families and children over time. (Really, it is the second phase because back in 1997, Quebec began to build a largely successful and largely universal low fee child care system of their own).
This blog comments on a policy brief published by Cardus in November 2024. Cardus advertises itself as a non-partisan Christian think-tank; it takes a socially conservative approach and promotes ways of thinking that pre-date the Royal Commission on the Status of Women that reported in 1970.
Cardus would have you believe that very few Canadian children and families benefit from low fee licensed child care. Cardus’ staff members Mitchell and Mrozek have written that: “…most Canadian families receive no benefit from the billions spent – only 29% of children aged 0-12 had access to a licensed space in 2021.” (November 2024). It’s a pity that Mitchell and Mrozak inappropriately use data on children 0-12 years to reach this conclusion. Most of these children (the 6-12 year olds) are not even covered by the new funding programs to make child care universally affordable for families. Cardus should instead have informed themselves with the latest Statistics Canada data (the parent survey in 2023 that looks at children 0-5 years of age). It’s called the Canadian Survey on Early Learning and Child Care. Or, Cardus could have read the report entitled Giving Parents Money Doesn’t Solve Child Care Problems published by the Prosperity Project in September 2024. It provided much of the same data we include in this blog.
Many families already benefit from low fee child care
If Cardus had consulted the appropriate data, they would find out that the truth is somewhat different from their biased conclusion. The latest data are from 2023, two years after the beginning of the $10 a day program and about 25 years since Quebec began phasing in universal child care. There are about 2.2 million children 0-5 years of age in Canada and close to a million of them (938,000 children or 42% of all children) are already using licensed child care.
Families prefer to use licensed child care
In fact, 75% of the children 0-5 years of age who use any kind of non-parental child care in Canada now use licensed child care. About 1.25 million children 0-5 regularly use some form of non-parental child care and 938,000 of them are using licensed child care.
Licensed child care provides strong support of parental employment
A major reason why governments in Canada are spending billions of dollars to provide low fee child care is to support parental employment. And this support of parental employment is happening. According to the recent Statistics Canada parent survey, 59% of parents (mostly mothers) whose main activity is working at a paid job or business already use licensed child care for their young children. Many others – another 115,000 who are on a waiting list – would like to use licensed child care and will happily do so when more supply becomes available.
Child age and availability of kindergarten explain patterns of use of licensed child care
The demand for licensed child care is strongly related to the child’s age. Parents with children less than two years are less likely to use licensed child care, so satisfying the demand for licensed care does not mean having spaces for 100% of children.
When considering child care use, it’s important to take other family or education programs into account. For many families with very young children, parent-only care during maternity or parental leave is their choice. For many children who are already in full-school-day kindergarten at four or five years of age, they do not need or their parents do not want supplementary child care.
Across Canada:
24% of children younger than two years of age are in licensed child care. In this age bracket, 62% are in parent-only care, with many of these parents on maternity or parental leave.
55% of all children in Canada who are two or three years of age currently use licensed care.
68% of all four- and five-year-olds who are not yet in kindergarten currently use licensed care.
But, when those four- and five-year-olds reach kindergarten, the use of licensed child care drops to 33%.
From the Public User Microdata File of the Canadian Survey on Early Learning and Child Care, 2023.
Licensed Child Care and Low-Income Families
The other main claim in Cardus’ brief is that low-income families do not get much access to child care services when child care is universally funded. The implication is that low-income families would be better served by a targeted child care program. And that universal $10 a day child care will mostly serve affluent families rather than those who have low-incomes.
There are two problems with this. First, the use of licensed child care by low-income families is already larger than you might imagine. In Canada outside Quebec 36% of children with employed mothers from the lowest income group use licensed care. And in Quebec, 68% of children with employed mothers from the lowest income group are in licensed child care.
Second, Cardus has identified the wrong culprit for the important inequities that remain. It is market-driven child care that disadvantages low-income families. It is universal child care that does a better job of welcoming the participation of low-income children to licensed child care.
We can see this by comparing access to licensed child care for different income groups where the mother is employed in provinces outside Quebec to the same data from Quebec. Two conclusions are obvious in the charts below. First, in Quebec, a much greater percentage of children from these low-income families are able to access licensed child care than is the case in the rest of Canada’s provinces. Second, the gap in access between the lowest and highest income groups is much smaller in Quebec than it is in the rest of Canada. As before, this data is from Statistics Canada’s recent parent survey.
What’s the explanation? When child care fees were uncontrolled (as they were in Canada outside Quebec until 2021 or 2022) many families have found licensed child care to be completely unaffordable. Most low-income families were squeezed out. Targeted child care subsidies were not enough to reverse this trend. Naturally, the majority of child care users were from more affluent families. But this was a result of the mostly unrestricted operation of the free market in child care, not the result of a massive program to lower fees.
From the Public User Microdata File of the Canadian Survey on Early Learning and Child Care, 2023.
Note: * The vast majority of parents responding to the survey were mothers
From the Public User Microdata File of the Canadian Survey on Early Learning and Child Care, 2023.
Note: * The vast majority of parents responding to the survey were mothers
As Cardus would know if they had looked at the federal-provincial-territorial agreements that have brought us the $10 a day child care program, improved equity in access for children from different backgrounds is a key objective of the federal program.There are substantial federal, provincial and territorial efforts to ensure that new child care capacity is directed towards underserved populations – low income children, vulnerable children, children from diverse communities, children with special needs, and Francophone and Indigenous children. Still, there is too little access to licensed child care for low-income families – on this we agree with Cardus. But eliminating funding support for child care services and instead paying money to families to stay at home is the opposite of a solution to this problem.
Cardus wants to make child care unaffordable again
Cardus does not really want financial support for licensed child care at all. Instead, Cardus wants us to return to some version of Stephen Harper’s Universal Child Care Benefit. They estimate that if the federal spending on the $10 a day child care program was divided equally amongst families instead of going directly to day care centres to lower fees, each family would receive $3,869 per child, per year. But, right now, families using low fee child care are receiving $5,000 – $15,000 in child care fee reductions. With the end of direct funding of child care, child care fees would soar and nearly a million families would be much worse off than they are currently. Child care would be unaffordable once again, and mothers would be squeezed out of employment by high fees. How is that a sensible and affordable child care policy? No wonder 75% of Canadians think that a Conservative government, if elected, shouldn’t end the $10 a day child care program.
There Is still a lot of work to do to build a $10 a day child care program for all the families that want to use it – especially in expanding the qualified workforce and the supply of services. But already many Canadian children and families are much better off than they were in 2021. The priority now is to finish the job of providing affordable, accessible, quality child
