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Quebec’s $7-a-day universal childcare: A few doubts

A response to Luc Allaire from John Richards

While Inroads is delighted to publish Luc Allaire’s case for Quebec’s universal childcare program, there are doubts about the program that should be aired. As Inroads co-publisher, I take the liberty of airing them.

To summarize Allaire’s case in his own words: “Parents appreciate [Quebec’s $7-a-day childcare centres] both for the good educational environment they provide for their children and for their affordability, and their existence has made it easier for a large number of mothers of young children return to work.”

Increasing female employment

The cost of this program to the provincial government is high: about $2 billion annually, $9,000 per subsidized space. Fees paid by parents (initially $5 and now $7 per child per day) cover the remaining costs of about $400 million annually.

Quebec introduced its universal childcare program in 1997. Both before and after 1997 – in Quebec and the rest of Canada – the provinces and Ottawa have provided extensive childcare subsidies to low-income families. Quebec’s universal program is primarily of benefit to families that are not poor.

Among families with children “at risk” of perpetuating an intergenerational cycle of poverty, there is a strong case for fiscal incentives to induce the parents to engage in employment and not rely on welfare. The most important “at risk” group is single-parent families. By increasing the probability that children complete secondary studies and avoid teenage pregnancy, the role model of a working parent provides a benefit that more than offsets the cost of reduced parenting time.

Across Canada, social policy over the last 15 years has combined “tough love” reforms intended to reduce reliance on welfare and “soft love” reforms to increase nonwelfare income for low-income families, subsidize childcare costs and increase in-work benefits of low-wage jobs via earnings supplements. And the evidence from “head start” childcare programs in the United States demonstrates conclusively that children of “at risk” families achieve better outcomes in early primary grades if they participate in childcare programs of reasonable quality. (Early childcare education is not a panacea: without additional interventions, the educational benefits tend to fade in higher grades.)

Among middle-class two-parent families, it is not clear that the government should induce parents of young children – via a subsidy of $9,000 per childcare space in this case – to enter the labour force and rely on paid childcare. In making the choice between “stay at home” parenting and reliance on childcare, parents should be assessing the benefits (monetary and psychological) from participation in the labour force against the costs (which include childcare). Provided childcare costs can be deducted from taxable income – which is the case in Canada – the personal income tax does not distort this decision.

Whether or not it is desirable to do so, Quebec’s universal childcare program has undeniably increased labour force participation among parents of young children. In the years before introduction of the program, labour force participation among Quebec mothers of children aged one to four was well below the comparable statistic in the rest of Canada. A decade later, in 2006, the Quebec rate was well above the Canadian average.1

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About the Author

John Richards
John Richards is co-publisher of Inroads and an economist at Simon Fraser University in Vancouver.




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