Parisa Mahboubi and Tingting Zhang wrote a pretty good policy analysis paper for the CD Howe Institute back in March 2026 entitled “From Promise to Practice: A Critical Review of the Federal Childcare Plan”. I didn’t agree with all of it, but much of it was a reasonably balanced assessment of some problems with the universal child care system ushered in by the Liberal government in 2021 (known as the Canada-Wide Early Learning and Child Care program, or CWELCC).
Mahboubi and Zhang acknowledged the huge impact that the Quebec universal program had had on the labour supply of mothers 25 to 54 years of age (from 60.5% – 3.3 percentage points below the rest of Canada – to 78.9%, about 9 percentage points higher than the rest of Canada). But, they worried about whether this sort of increase can be replicated now in the rest of Canada. And they were anxious to make sure that costs and availability were especially improved for populations where barriers to employment are the highest. At the same time, they recognized that there are important affordability barriers across income groups – on average 40% of a parent’s earnings are taken up by child care costs and taxes when she enters the labour force.
And, in their CD Howe paper, Mahboubi and Zhang articulate some key principles of good child care policy: “ensuring accessibility and affordability across all income levels; offering a range of options to meet diverse family needs (including various care modes, flexible scheduling, and diverse facility types); and investing in high-quality early childhood education.”
In order to achieve these goals, they come up with a number of main policy recommendations.
- Provincial and territorial governments need to prioritize creation of licensed child care spaces for underserved groups and areas by directing operating and capital money to incentivize these priorities.
- Provincial and territorial governments need to improve wages, working conditions and professional development opportunities for early childhood educators to maintain high quality services.
- The federal government should “ensure stable, long-term funding for the CWELCC system while promoting provincial accountability and progress towards consistent national standards.”
- For families not using CWELCC-funded child care, the authors called for an “income-tested, refundable tax credit similar to Quebec’s model to increase flexibility and support families using non-subsidized care”.
I don’t agree that the best way to provide care during non-standard hours and to improve flexibility is to create a parallel funding system of tax credits. Much better to provide funding incentives for existing providers to lengthen their hours and provide more flexible services. But, I do agree that the priority now is the expansion of regulated spaces with stable long-term funding, planning and financial supports for new spaces, and improved compensation for educators.
Unfortunately, a couple of weeks ago, the same authors wrote a commentary piece in the Globe and Mail. It’s apparently based on their CD Howe study, but their balanced assessment has now become crudely ideological. Now they say that Canada’s $10-a-day plan has made child care “less accessible”. Gone is the recommendation to provide stable long-term funding for the Canada-Wide universal child care model. Gone is the recommendation that improving wages and working conditions of ECEs are top priorities. Now, they want “targeting” – different child care fees for every family – instead of universal services at a known price. They want income-related fees for all families, both for licensed child care and for families using any other type of care. They seem to believe that charging income-related fees will deal with the accessibility problem and ensure that low and middle income families gain access. As they put it: “Without better targeting, $10-a-day child care risks becoming a well-intentioned policy that delivers too little, to the wrong people, at too high a cost.”
Now we have simple right-wing solutions to complex child care problems – against universal services, for targeting assistance to the truly needy, don’t even mention gender-based rationales for funding child care universally.
Let me offer a few correctives.
Accessibility of child care is not worse than it was in 2019, it’s better. Back in 2019, there were about 591,000 licensed spaces in child care centres for children younger than kindergarten age. In 2025, there are a little over 750,000 such spaces. On top of that there are over 100,000 family child care spaces available for children 0-5. And, there are also quite a few before-and-after school spaces available for children who are in kindergarten (over 125,000 in Ontario, for instance). Over the period from 2019 to 2025, the population of children 0-5 years is constant at just over 2.2 million. So, accessibility of child care has improved, not worsened.
What has changed is that the latent demand for child care, which was suppressed by its high price, has now emerged. Demand has risen; supply has not fallen. Mahboubi and Zhang seem to believe they can deal with this excess of demand by income-related fees. That will only happen if child care fees rise very substantially, high enough to choke off child care demand by middle and higher income families. This would violate the principle that these same authors articulated in their CD Howe piece: “ensuring accessibility and affordability across all income levels”, and would be unacceptable socially and politically.
Although ideology appears to have driven Mahboubi and Zhang towards recommending “targeting” in their Globe and Mail comment, this is no solution to the actual problems the child care system faces. The key problem now is insufficient supply of good quality child care services to meet the now higher demand. The only way to deal with this problem is to create more services quickly, and that means finding sources of capital funding, mobilizing resources to ensure that land and buildings are available, that planning permissions are given quickly, that expansion is planned to take place in the areas and for the populations where need is most acute, that adequate supports are given to providers that will be managing the expansion, that access to continuing operational funding is guaranteed early in the process of expansion, that the process of obtaining a licence is smooth. Rapid expansion also requires dealing with shortages of qualified early childhood educators, which requires ensuring that pay, benefits and working conditions are attractive enough to increase workforce supply. “Targeting” will not provide the additional child care services needed; their CD Howe paper did not imply that it would.
I’m also frankly a bit stunned that these authors could recommend an income-tested refundable tax credit “similar to Quebec’s” as a major new form of funding child care. These authors know that the Quebec tax credit has been a disaster for child care quality. They refer to it in their CD Howe paper in this way:
“Between 2019 and 2022, about 30 percent of Quebec childcare installations… failed the provincial educational quality assessment. Quality outcomes were significantly weaker in for-profit daycares than in non-profit CPEs, despite refundable tax credits and other measures intended to support the expansion of commercial daycare services. For-profit centres also tend to rely more heavily on unqualified staff and are more likely to fail both the quality evaluation and qualified‑staff ratio requirements.”
I have summarized this evidence on quality in the tax-credit-funded Quebec child care centres here, and it amounts to a damning assessment of this form of funding.
On top of all this, there is little evidence that would lead us to believe that the best way to help low-income families and vulnerable children access child care is by targeting child care assistance to them and charging high fees to others. After all, “targeting” was the basic child care funding model that Canada had since the late 1960s – child care subsidies targeted at low-income families and vulnerable children. These subsidies have had some positive effects, but targeting has not worked to solve workforce access problems of many low-income Canadian families. And yet Mahboubi and Zhang think that doubling down on targeting will somehow make it work better.
Mahboubi and Zhang should be learning a different lesson from Quebec’s experience – universal programs can provide the best conditions under which low-income families will access child care as employment and income support. As economist Pierre Fortin has noted “In 1996, child poverty rates across Canada were at an all-time high and children in Quebec were amongst the worst off. Today, it’s the opposite. …Quebec’s child poverty rate is 44% lower than all other Canadian provinces.”
Economists Baker, Gruber and Milligan have recently confirmed that these effects of Quebec child care are causal. Looking at the long-run effects of Quebec’s universal system, they have found significant positive effects on employment, mostly full-time employment, for mothers with less than high school, and those who have completed high school or college. They found significant lifetime reductions in the likelihood that mothers affected by the child care program collected EI benefits or social assistance. And there have been substantial reductions in family poverty, especially when mothers are in their childbearing years, but also at later ages. We could conclude that the best way to improve CWELCC’s positive effects on low-income families and vulnerable children is to expand access and make the program work better, not to change horses in mid-stream.
I’m disappointed with the Mahboubi and Zhang piece in the Globe and Mail. For a while, I thought that disagreements over how to solve the problems of the current CWELCC program were narrowing and becoming less ideological. I’m sorry to have to abandon that point of view.