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Truth Tracker: Could the Conservatives’ child care plan help create more spaces?

EDMONTON – Access to affordable child care has become a hot topic during the federal election campaign, especially for women, as party leaders vie for support from parents keen to return to the market post-pandemic work.

The Liberals, NDP, Bloc and Greens are all in favor of some form of national child care program, similar to the one that the government of Liberal Leader Justin Trudeau announced in this year’s budget, with promises to prioritize funding for badly needed child care spaces.

The Conservatives, for their part, have pledged to replace the Liberals’ program with a refundable tax credit of $ 4,500 to $ 6,000 per child, with the aim of covering up to 75% of family childcare costs. low income. . According to the party’s platform, the money would be paid out during the year to avoid families having to wait until the end of the year to receive the refund.

However, their proposal does not specifically mention a plan to directly create more child care spaces – one of the biggest problems facing the child care industry in this country.


This week, faced with questions about this flaw in her plan, Conservative leader Erin O’Toole said the money her policies injected into the child care system would help create these spaces.

“It’s a bit of an area that is not well understood, it’s going to create more space… just by providing more resources to families directly,” he said in an interview with CBC. “Is every dollar tied to a space? No. It has to do with allowing the family to make the decision.

In other words, the Conservatives’ plan is to stimulate the market enough to create more demand and, therefore, more space.


It is estimated that hundreds of thousands of new child care spaces are needed across the country to expand access to every family in need.

According to the latest Statistics Canada data, about four in ten parents who were using regulated or unregulated providers at the end of 2020 were having difficulty finding child care, with parents of children one to three years old being the most common. likely to report difficulties in finding childcare.

More than half of Canadian parents, 56 percent, said they were unable to find child care in their community and 43 percent had difficulty finding affordable child care.

But policies based on the simple argument of supply versus demand may not be enough to create these badly needed spaces.

“The first thing I would say is that there is a huge confusion that is started by politicians when they talk about programs to create child care spaces – they are not talking about programs to create child care spaces. , they’re talking about policy to increase demand, ”Vincent Geloso, professor of economics at George Mason University, told by phone.

“Any form of subsidy, whether it is the Liberal universal subsidy or the Conservatives’ targeted measures, are essentially shifts in the demand curve. “

Geloso says it is difficult at the federal level to keep promises of increased accessibility because municipal and provincial policies have much more influence in terms of costs and procurement.

“Regulations in Toronto, for example, restrict the supply of housing and, by accident, increase rents and child care costs. So in areas where there is less regulation, daycare prices are lower because it is easier to open to new locations, ”he said.

“So what the federal government can do is very, very limited because the only thing it can do is play with demand. The two policies are unlikely to produce the significant effects they promised in terms of accessibility. They won’t produce any effect, but they will produce a fairly small one. “

David Macdonald, senior economist at the Canadian Center for Policy Alternatives, says the tax credit does not imply an additional transfer to the provinces to build more space.

More importantly, he adds, without specifying where the money should go, it’s just as likely to result in higher fees.

“The problem with this kind of simplistic analysis is that the new money doesn’t have to go to spatial creation, [it] may as well go to higher fees, especially with private for-profit providers, ”Macdonald told via email.

“The BC example should be a warning in this regard, they have implemented a fixed fee reduction ($ 100 / month for preschoolers). However, average fees quickly increased to absorb some of what parents were receiving, which was especially true for cities with more for-profit providers.

The idea of ​​a refundable tax credit for childcare expenses is not new. In fact, three provinces already have them: Quebec, Ontario and Newfoundland and Labrador.

In Quebec, there are two parallel systems, a subsidized program that costs $ 8.35 per child per day and an income tax credit that covers up to 75% of costs for those paying market rates. The latter is very similar to what O’Toole offers.

“What we found is that the introduction of the tax credit actually increased the supply of market-based child care services, which turned out to be of much lower quality. and also very expensive, ”Morna Ballantyne, executive director of the children’s rights association Child Care Now, told by phone.

In addition to concerns about higher costs, advocates like Ballantyne – who supports a universal system, like the one proposed by the Liberals – fear that a market-based approach to child care will reinforce existing problems in child care. the system, although there are small improvements to the infrastructure.

“When you rely on the market to fund demand, you really rely on private and individual suppliers to basically set up. They will then count on the expenses of the parents to be able to keep the doors open, ”explained Ballantyne.

“Then they can’t respond to the one-time, more expensive child care provision. For example, what is necessary to meet the needs of parents who have atypical schedules or to meet the needs of children with special needs.


“As an economist, I can’t say that a grant wouldn’t create more demand because it’s basically a grant that does,” Geloso said. “But my claim is that the movement would be very small.”

Macdonald adds that the over-simplistic demand-versus-supply argument doesn’t always mean that the extra money will go to creating new spaces.

Finally, while Ballantyne argues that tax credits in Quebec have in fact increased the supply of market-based child care, she argues that the quality of child care is lacking in this type of policy.

“The market approach is actually what we’ve had in Canada all along … and it’s a complete failure,” she said.


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