The type of support promised for child-care services is one of the issues that most distinguish the three main political parties in the federal election.
Party platforms on child care include commitments to such measures as an annual cash payment of $1,200 for each child under six (Conservative), a national earlylearning and child-care initiative based on Quebec’s system (Liberal) and a childcare act that would reserve federal funds for “licensed, high-quality, non-profit” child-care centres (NDP).
Advocates of a national program point to the child-care centres set up in Quebec after the quasi-nationalization of daycare in 1997. And Canadians have been led to believe the PQ government then in power had found the right formula — and that all parents have access to a quality service at the affordable price of $7 per day.
But the situation in Quebec is not nearly as rosy as is claimed, and Canadians need to know the downside.
The Quebec child-care reform decreased outlays for parents from about $25 to $30 per day to $7, effectively eliminating cash-flow issues for lower-income families.
However, the drop in price increased demand. And it resulted in a shortage of spaces (given the government’s limited budget) and in waiting lists of up to two years for subsidized spaces.
While waiting, parents who need child care continue to pay the market price. This has effectively created a system where access to a subsidized space depends neither on parents’ financial circumstances nor on the needs of children, but on their rank on a waiting list.
Quebec shifted from a system that helped parents buy child-care services to a system of subsidies to the providers of those services.
The PQ government limited the power of child-care centre administrators and began setting the pay of child-care workers. So the salary demands of those workers were then directed to the public treasury.
The negotiation of sectorwide collective agreements has led to strikes, which have caused the loss of 73,000 person-days of work since 1997. That’s more than double the 34,000 days lost between 1990 and 1997.
This system of funding providers, instead of parents, has also limited parental choice. The child-care centres certainly meet the needs of many parents, but an increasing number are looking for flexible options that the centres are unable or unwilling to provide.
How can we better accommodate the range of parental preferences?
When purchasing power remains in the hands of those who benefit from a service, providers remain responsive to user needs. When funding for that same service comes from a central authority, conformity to norms often takes precedence.
In the end, there are several good reasons to empower parents through cash transfers, vouchers or tax rebates for child care, rather than directly subsidizing child-care service providers.
Paul Daniel Muller is an Associate Researcher for the Montreal Economic Institute.