Peter Shawn Taylor: Round two of ‘beer and popcorn’ on parties’ child-care plans

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In an election notable for the lack of significant policy differences between the two main parties — Erin O’Toole’s Conservatives having produced a big-spending Liberal-style election platform but with a blue cover — there’s one topic that mercifully offers voters a real difference of opinion. And harkens back to the much more interesting 2006 federal election.

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Recall that in 2006 Liberal Prime Minister Paul Martin offered voters a $5-billion, five-year child care plan modelled on Quebec’s and delivered via a series of federal/provincial agreements. Conservative leader Stephen Harper countered with his Universal Canada Child Benefit (UCCB), a $1,200 cash payment for every child under the age of six regardless of child care arrangements. That the Conservatives would allow parents to decide on the care of their own children in such fashion was infamously derided by Martin’s communications director Scott Reid as an excuse for parents to blow it all on “beer and popcorn.” Many parents took offence. Nearly a decade of Tory rule followed.

Fifteen years later, not much has changed. An incumbent Liberal government is once more promising to create a national child-care system with Quebec as its inspiration. All but three provinces have signed up for their share of $30 billion in federal funding over the next five years that is meant to get the average price at a childcare centre down to $10/day. The Conservatives have returned fire with another plan to send $1.2 billion a year directly to parents.

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And in another throwback to 2006, the Conservative plan has again been attacked by national daycare advocates as retrograde and insufficient, since it allegedly short-changes parents and fails to deliver sufficient “high quality” non-profit, institutional child care spaces. The leftist Canadian Centre for Policy Alternatives claims an “average family in 32 cities” will be far better off with Liberal subsidies than Conservative cash.

We’ll soon see if the 2021 federal election is one of those sequels that ends up the same as the original.

The Conservative platform proposes to convert the existing federal Child Care Expense Deduction (CCED) into a refundable tax credit that’s worth up to $6,000 per year for low-income families and declines steadily as family income rises. It is a decidedly progressive policy, hitting a minimum level of support for families earning over $163,000.

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As for the CCPA’s proposition that an “average family” in nearly every Canadian city will be better off with $10/day childcare, this depends on how you define “average.” Pre-COVID, approximately 60 per cent of Canadian children under the age of six were in childcare arrangements outside the parental home. Slightly more than half of those kids attended a formal child care centre; the rest spent their days in the care of relatives, friends or home daycares. This means less than a third of all children are in a position to benefit from the $30 billion to be spent over the next five years lowering the cost of existing daycare spaces to $10/day. The large majority of parents — both the 40 per cent who stay at home with their children and the sizeable remainder who pay for care outside formal centres — are ignored by the Liberal plan. Their “average” payout will be zero.

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Further complicating the equity of a national child care plan is ample evidence from Quebec that shows a disproportionate share of government-funded spaces are occupied by well-off families. A 2006 C.D. Howe Institute study found “the Quebec program heavily subsidized the cost of childcare for middle- and high-income families.” O’Toole’s plan may entail less money overall, but rather than helping millionaires pay for their kids’ childcare, it focuses assistance at the lower end of the income spectrum. And allows for broader participation.

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The Tory proposal should also attract interest from folks who consider Quebec to be the guiding light of childcare policy innovation. The link between the Liberals’ $10/day childcare plan and Quebec’s $8.50/day Centres de la petite enfance (CPE) is widely acknowledged; the 2021 federal budget even called Quebec a “pioneer” in the field. But, surprisingly enough, Quebec is also a pioneer when it comes to refundable childcare tax credits.

When Quebec unveiled its then-$5/day daycare system in 1997, it was intended to be entirely non-profit and government-funded. But demand for low-price, high-cost CPEs far exceeded supply and the resulting waiting list became a huge political liability. The solution, unveiled in 2009, was a refundable tax credit meant to attract new private-sector investment. Families could either receive a government subsidy through a CPE or get an equivalent tax credit and apply that to the cost of childcare at a for-profit centre.

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The tax credit was an immediate success. Within a year the non-subsidized, privately-owned daycare sector exploded from nearly 7,000 spaces to over 11,000. Today, it accounts for over 70,000 spaces. Beyond satisfying a wider range of parents, the Quebec experience also demolishes complaints from daycare advocates that tax credits have no impact on spaces. And the Tory plan is an exact copy of the Quebec tax credit, right down to the sliding scale payout.

Anyone who admires the Quebec model of child care has plenty of options this election. Beer and popcorn not included.

Peter Shawn Taylor is senior features editor of C2C Journal, where a longer version of this story first appeared.