Ontario’s childcare plan could help 40,000 parents into full-time jobs

This opinion article was written by Gordon Cleveland, Associate Professor Emeritus of Economics at the University of Toronto.

The Ontario Liberals recently announced a plan to offer free childcare for preschoolers — from the age of 2.5 years until they start kindergarten — to every family that wants it by 2020.

Premier Kathleen Wynne has also announced funding for new licensed childcare spaces in community locations — such as community centres, places of worship and Indigenous friendship centres — in support of this goal.

Many people find this approach surprising because childcare for infants and toddlers is much more expensive than care for preschoolers. They question how tackling preschool spaces first makes sense as the best way to improve childcare affordability.

"More than 80% of Ontario families cannot afford licensed childcare"

Indeed, Ontario’s NDP has vowed they will “do better” and make childcare affordable and accessible to children of all ages, all at once.

I am an economist at the University of Toronto who has researched childcare policy for the last 30 years. As the main author of the new study, “Affordable For All: Making Licensed Child Care Affordable in Ontario,” which was commissioned by the government of Ontario, let me try to explain why free preschool really does make the most economic and social sense.

A burden on mothers

Childcare is very expensive across Canada. A typical Ontario family could expect to pay at least CAD$15,000 ($11,700) annually for an infant’s care, CAD$13,000 ($10,100) for a toddler and CAD$10,000 ($7,800) for a preschooler. If the family lives in Toronto or some other cities, fees can be considerably higher.

Our study, which the Ontario Liberals’ plan is based upon, found that more than 80% of Ontario families with children of up to four years of age cannot afford the cost of licensed childcare. Many of those who can currently afford it are lower-income families lucky enough to obtain scarce subsidised spots.

On average, Ontario families spend over 23% of their after-tax household income on licensed childcare services, which amounts to 67% of a mother’s take-home pay. This is enough of a barrier to keep many mothers out of the labour force, and to compel others to cobble together part-time work or self-employment with unpaid care arrangements. In other words, the childcare affordability crisis puts a real burden on families, especially on mothers.

Helping more families

Since nearly all families cannot afford childcare, the solutions need to be comprehensive, not targeted. It’s not enough to provide assistance only to low-income families; Ontario already has a childcare subsidy system that does that, and it only helps a small minority of families.

If the government puts money into preschool childcare, it improves affordability for a very large number of Ontario families. There are more than 100,000 Ontario children currently using preschool childcare. There are another 60,000 to 100,000 likely to use it when it is made free. Licensed childcare is very well accepted as positive for children and families once children reach two and a half or three years of age. And far fewer families use infant or toddler care.

"It’s crucial for Ontario to avoid Quebec's missteps"

So if you want to make childcare affordable for the maximum number of Ontario families, starting with children at preschool age is the way to go. Think of it as moving the childcare affordability finish line. Right now, a child has to reach kindergarten before the crushing affordability burden diminishes. Making preschool childcare free moves the finish line back to two and a half years old. For every child in Ontario.

Avoiding Quebec’s mistakes

Another key factor stems from the experience in Quebec. Quebec started its childcare reforms in the 1990s with great plans to build a high-quality system, with most children using high-quality community-based childcare centres called CPEs (Centres de la petite enfance) at CAD$5 ($3.90) per day.

But the province made the mistake of offering these widely affordable childcare services before they had capacity to serve the explosion of demand. The Quebec government then had to allow lower-quality, for-profit childcare centres to provide many services. They also had to dramatically expand home childcare, a sector that often uses caregivers with little training or supervision.

Research studies found this childcare to be of relatively low quality. This created several problems for children and families. On top of all this, middle- and higher-income families got a disproportionate share of the good quality CPE places. So childcare is very affordable in Quebec, but not of great quality. And the highest quality services are not fairly distributed among income groups.

It’s crucial for Ontario to avoid these missteps.

More parents in employment

At present, Ontario has only 14,000 infant spaces, about 45,000 toddler spaces and 110,000 preschool spaces. In other words, there is only capacity for about 7% of Ontario’s infants and about 32% of toddlers but as much as 67% of preschoolers.

If infant and toddler childcare were made affordable tomorrow, there would be an instant Quebec-style crisis of too much demand and too little supply. By channelling the new funding towards preschool-age children, Ontario has a much better chance of building a well-managed, publicly funded system of childcare services.

Making preschool childcare free will dramatically improve affordability for Ontario families. It will lead to a predicted increase of 40,000 parents in full-time employment. And it will increase net tax revenues and economic well-being.

There will still be childcare affordability problems at infant and toddler ages. However, as licensed capacity is built for preschoolers, the government can require complementary increases in infant and toddler capacity. As this capacity increases, additional improvements to affordability should be made.

This article was originally published on The Conversation, and can be found here.

(Picture credit: Flickr/Queen's Printer for Ontario, 2013)