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Universal early learning and child care is essential to the country’s competitiveness: Canada can’t work without it

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Written submission for the 2019 pre-federal budget consultations from the Childcare Resource and Research Unit
Author: 
Friendly, Martha
Publication Date: 
1 Aug 2018
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Background

An economic survey of Canada by the Organization for Economic Co-operation and Development (OECD) (June 2018) included the following among its key recommendations: "Further increase federal and provincial funding of childcare with a goal of making access to affordable high-quality childcare available to all children aged three and under. Extend kindergarten so that all four-year-old children have access to affordable pre-school education.”

In July 2017, the International Monetary Fund documented that the inclusion of more women in the economy would be an important source of economic growth in Canada. The IMF report noted that female labour force participation lags that of male participation by about 10 percentage points outside Quebec. It provided evidence that a higher female participation rate would result in increased labor productivity and economic growth. The report concluded that family policy changes, particularly public spending on early education and care, is essential to “realize women’s full potential in the work force.”

The same message was echoed by Bank of Canada Governor Stephen Poloz in a widely-reported speech (March 2018) in which he outlined the economic benefits of helping more women, young people, Indigenous Peoples, recent immigrants and Canadians with disabilities enter the job market. Such help could expand the labour force by half a million people and raise the country’s output by $30 billion per year or 1.5 per cent. He pointed to affordable, accessible, publicly-funded child care as a valuable tool to help achieve those results.

The report of the House of Commons Standing Committee on the Status of Women, Women’s Economic Security: Securing the Future of Canada’s Economy, identified child care as a first measure to “increase women’s access to the labour force and increase their economic security.”

Countless studies, surveys, research reports, and public policy documents on early learning and child care have been issued from the time the Report of the Royal Commission on the Status of Women was tabled in the House of Commons in 1970 to the present day. Together they demonstrate that significant public spending on early learning and child care is essential for economic growth, women’s equality and economic security, the positive development of children and the well-being of families. Although this evidence has been recognized by a broad and diverse cross-section of Canadian societyin support of a growing clamour for robust action by the Government of Canada, we have seenonly limited progress.

October 2018 will mark the third anniversary election of a federal government that promised to be responsive, to do better than the previous government on ELCC, and to make gender equality a priority area of concern. However:

  •  The Government of Canada continues to underfund early learning and child care (relative to our capacity as demonstrated by our GDP), leaving responsibility for provision and organization of ELCC to the provinces and territories. These, in turn, rely primarily on a child care “market” to deliver a supply of services that is insufficient in spaces, unaffordable and often of a level of quality too low to support children's healthy development. Ultimately, individual families are responsible for devising child care arrangements, with limited support from their governments.
  • Parents are forced to spend a disproportionate percent of income on user fees, forcing them (usually mothers) out of the labour force temporarily, reducing workhours, dropping out altogether, or having fewer children.
  • Public planning of ELCC services (apart from kindergarten) is still mostly non-existent. This contributes to numerous "child care deserts" in which demand for licensed child care far outstrips supply in large swaths of the country.
  • The almost-all female child care workforce is poorly compensated and neglected by public policy, making it very difficult to develop, improve and/or maintain high quality services.
  • Canada has few public policy restrictions on expansion of for-profit ELCC operations. This means that public funds allocated by governments can be used to generate private profits, sometimes taken off-shore—a fatal policy flaw that large big box global operators are poised to exploit.
  • There is an absence of federal leadership with respect to ELCC policy development, as well as inadequate long-term funding commitments, resulting in significant gaps with respect to access, particularly for vulnerable families, affordability, inclusion of children with disabilities, quality and the range of services offered to families. 

The federal government’s 2016 and 2017 federal budget allocations for ELCC are woefully inadequate to address the magnitude of these deficiencies. In 2017,child care advocates pointed out that the government’s commitment of $7.5 billion over eleven fiscal periods amounts to a minimal average annual allocation. At the end of this period, it will remain well below the accepted international benchmark for a country’s minimum annual spending of 1% of GDP (for services for 0-5 year olds)—exceeded by a number of OECD countries-- and well below half what the previous Liberal government proposed to spend more than a decade ago (in current dollars).

In 2017, the House of Commons Finance Committee agreed that the 2018 federal budget should provide sufficient funding to beginning to build a universal system. Further, the child care community urged that the federal government make its funding transfers to the provinces and territories conditional on specific and meaningful action plans to actualize the principles in the Multilateral Framework on Early Learning and Child Care to make licensed child care more accessible, more affordable for parents of all income levels, of significantly better quality and more inclusive of children with disabilities. 

However, the 2018 federal budget did not allocate additional funds for ELCC—a glaring and absurd omission in a budget purported to have gender equality as a focus. 

The problem is not only that the level of federal funding is inadequate; Canada is also suffering from the absence of robust federal ELCC policy direction. Thus, the Multilateral Framework agreements with provinces and territories, negotiated by the federal government, and the subsequent bilateral agreements with each province and territory concluded in the last year may very well fail to bring about the transformative changes in ELCC needed country-wide. 

For one, the agreements are based on the faulty premise that government interventions in ELCC should be targeted to the most vulnerable children and parent populations. This is contrary to all the research and evidence—reflected in the best international practices—that a universal approach yields better outcomes for children, families, economic equality, female labour force participation and economic growth than a targeted approach.

Additionally, the agreements do not set out clear, measurable objectives with respect to expansion of ELCC services, improvements in quality, inclusion of children with disabilities, working conditions or training for staff, Indigenous child care, or any other critical aspect of ELCC policy. Indeed, the provinces and territories are using the limited federal funds to do more of what they have always done-- supporting approaches that the research evidence shows do not represent best practices, for example, parent fee subsidies and/or tax breaks rather than funding services operationally to raise quality while also making ELCC more affordable for all parents.

The community's recommendations for the 2019 federal budget recognize that provinces and territories have constitutional responsibility for development and delivery of ELCC services. However, the Government of Canada also has obligations with respect to the rights and wellbeing of children, Indigenous Peoples, women’s equality, family supports, equitable access to services, and economic growth and prosperity.

Thus, we recommend that in 2019, the federal government increase spending on ELCC significantly and continue to increase it each year thereafter until the international benchmark of 1% of GDP is achieved.

We also urge that the budget provide for a distinct (ear-marked) allocation to support the Indigenous framework agreement on ELCC.

As well we recommend that the federal government use its spending power to negotiate new bilateral agreements with provinces and territories (replacing the current ones that will expire in 2020) to operationalize clear plans and set specific timetables for achieving evidence-based policy objectives.

In closing, we note the1984 statement from the Commission on Equality in Employment, chaired by Rosalie Abella, that argued that child care is a necessity and not a luxury-- an observation reiterated many times over the years, including by the current Government of Canada in its first budget. The Childcare Resource and Research Unit agrees with this statement and continues to search for the opportunity to work with policy makers to put ELCC solutions into practice.

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Entered Date: 
10 Oct 2018
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