Increasing access to daycare is not as easy as 1-2-3, but it could be

Texte d’opinion publié en primeur sur notre site.

In an effort to increase access to childcare, the Quebec government recently announced the creation of 14,000 new subsidized daycare spots over the next two years. With 51,000 children on the waiting list for subsidized daycare, there isn’t a single extra space to spare. But despite the government’s good intentions, even this modest increase might not actually be feasible given the inequitable circumstances in which unsubsidized daycare centres find themselves. In other words, the government is not taking into consideration all the unsubsidized daycare centres that may end up closing due to the public system’s unmatchable working conditions.

The province is going to require no fewer than 18,000 additional educators to meet the needs of the growing system. The government is certain, however, that it will be able to attract these workers thanks to the salary increase of up to 18% for qualified educators that was awarded in the new collective agreement signed in December. This substantial raise is in fact one of the things that will jeopardize the thousands of places in unsubsidized daycare centres.

Indeed, in order to offer the same salary to educators as they would receive in the public system, unsubsidized daycare centres would need to charge parents significantly more. In some cases, the daily fee could reach $65 just to break even. Even with the improved tax credit, such a fee would amount to a net expense of $32 a day for parents[1]—that’s $25 more than a subsidized daycare space, further exacerbating the inequalities between institutions and between families.

Private daycare centres are therefore stuck between a rock and a hard place:  either increase the fee to an unreasonable amount to keep up with the government’s promises, or close and potentially place even more children on the waitlist, which is the last thing parents need. Some may not even have the choice to make, since they’re already witnessing an exodus of their staff to the public system.

So while the government’s intentions may be noble, the creation of additional subsidized daycare spots will effectively transfer educators from one part of the system to the other, putting thousands of existing spots at risk of disappearing. Indeed, unsubsidized daycares are important contributors to the childcare system, representing nearly 23% of daycare spaces in the province, and 32% in Montreal.

Quebec entrepreneurs have also proven their ability to respond to the growing need for childcare by increasing their number of spots by an average of 25% every year since 2003. The growth of subsidized spaces pales in comparison, averaging approximately 2% per year. What’s more, unsubsidized childcare centres are less costly to taxpayers, since they receive no direct subsidy from the government, whereas the annual financial contribution from Quebec for a single spot in a public daycare amounts to $15,500—funds that should instead be directed toward parents through the tax credit to offer them greater choice.

Quebec entrepreneurs have demonstrated their ability to increase the supply of daycare spaces, without direct government subsidies. All that remains is to adopt measures that will actually make these services more accessible to everyone.

To do this, we must stop subsidizing childcare centres and instead only subsidize parents directly. The funds could even be modulated according to household income and take the form of a refundable tax credit. If the money follows the child, establishments will be encouraged to offer the best possible quality of service, at the best price, while increasing the number of spaces to meet demand. After all, if competition is good when it comes to restaurants or clothing stores, why wouldn’t it be good for childcare?

If the government’s ultimate goal is really to expand access to the daycare network, it must rethink its funding approach so as to favour providers who are able to increase the supply of this service, which we need desperately.

Maria Lily Shaw est économiste à l’IEDM. Elle signe ce texte à titre personnel.

Note

1. For a couple earning a combined annual salary of from $80,000 to $100,000 and needing 260 days of daycare.