Quebec’s failed child-care model

A Commons committee is currently examining Bill C- 303, which would mandate funding for early learning and child-care programs in Canada. This private member’s bill, introduced on May 17 by New Democratic MP Denise Savoie, is clearly aimed at extending Quebec’s 10-year-old model of government-subsidized child care (which many see as a success story) across the country.

But before we try to replicate Quebec’s child-care model coast to coast, Ottawa should take a close look at what that model has brought Quebecers. The answer: high costs, little choice, mediocre quality.

The stated goal of Bill C-303 is to “ensure the quality, accessibility, universality and accountability of [child-care] programs in order to promote early childhood development and well being.” Is this goal really being met in Quebec?

One of the few extensive studies on the quality of Quebec child-care facilities reported in 2005 that 61% had an overall quality rated as minimal (with scores of 3 to 4.9 out of 7), while 12% were rated as inadequate and 27% as good. Government subsidy and regulation, clearly, does not ensure high quality.

As might be expected, the minimal payment required from parents – currently set at just $7 per child, per day of care – has produced a sharp rise in demand both by new users (for example, mothers who recently entered the workforce, or who stayed home but have put their children into outside care anyway because it is now so affordable) and by parents who had previously used other forms of child care. From the beginning, the predictable result has been that demand exceeds supply: Tens of thousands of children are on waiting lists. The affected parents have either put off entering the workforce or are using more expensive forms of child care.

Even for those lucky enough to get in, $7-a-day child care does not benefit all parents equally. Calculations by experts show that families with relatively high incomes (over $60,000) benefit most from the system. Not surprisingly, they also make the greatest use of it. In 2000, more than 58% of children in subsidized child-care centres came from families with incomes above $60,000, although they represented a minority of children aged zero to four in Quebec.

Meanwhile, those with incomes between $25,000 and $40,000 are actually worse off financially than they would be using nonsubsidized child care at, say, $26 per day, given the overall effect of the government’s program on their taxable incomes. So much for universality and accessibility.

The $7-a-day child-care system also results in unfair competition for unsubsidized private daycare operators, further limiting parents’ choices. Since 1997, their market share has become negligible. They accounted for just 1.7% of all spaces in 2006.

Last year, with the stated aim of preventing “two-tier” child care from emerging, the Quebec government prevented subsidized private daycare centres from engaging in extra billing for supplementary activities. This coercive measure comes as a logical outcome of the centralization and standardization mindset that took over a decade ago. A group of parents is currently challenging this policy in court.

In addition, centralization of collective bargaining at community child-care centres, more than one-third of which are unionized, has led to increased rigidity and more labour disputes. This is far from beneficial to parents: They are more easily taken hostage, as was shown in strikes that occurred in 2005. This centralization has also produced higher costs for the government and, thus, for taxpayers.

The costs of the new child-care system seem high in comparison to what private unsubsidized daycare operators charge, and to what is charged in other provinces. One measure of subsidies is the daily basic allowance given by the government. In formal child-care facilities, this comes to about $40 per child – not even including the $7 parental contribution. In regulated private daycare centres, by contrast, the corresponding cost is $33.

The great majority of countries that have active family policies offer more choices to parents than Quebec does – including choices that do not involve institutional care. A number of European countries that pay universal family allowances, for instance, also provide additional parental allowances to mothers who look after their children until age three. Some offer public child-care services but also reimburse a portion of spending on private child-care services.

Whatever the aims of family policy – assistance to families, work-family balance or social and cognitive development starting in infancy – there exist more effective ways of achieving them. The key is to offer greater choice to parents, something Quebec’s model fails to do. Extending this model coast to coast, as Bill C-303 mandates, would be a bad idea.

Norma Kozhaya is an economist at the Montreal Economic Institute.

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