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Budget 2021: The Child Care Budget?

The Trudeau government’s next budget will be make-or-break for Canadian women and their families.  Expectations are high – and so are the stakes.

Child care advocates, feminist and business organizations, social policy think tanks, economist and financial institutions all agree that child care is essential to support women’s labour force participation and Canada’s post-pandemic economic recovery. There is an unprecedented consensus that child care should be a priority in this year’s budget and significant investments are needed to have real impact.

Parents across the country also agree. A recent Angus Reid poll found 84% of families with a child under 6 agreed that “we need a much bigger public investment in affordable quality child care options” and 83% supported “the idea of moving towards a national child care system in Canada”. 

Minister of Finance, Chrystia Freeland, has committed to building a Canada-wide early learning and child care system. She’s further gone on record stating “Canada will not be truly competitive until all Canadian women have access to the affordable child care we need to support our participation in our country’s workforce.”

Despite the strong consensus for investment in child care, what remains unclear is the strength of the federal government’s leadership role and funding tools -- and its willingness to leverage both to shape a national child care system for the future.

Child Care and COVID

This budget will be significant for the current child care sector. Child care across the country has been devastated by the pandemic: repeated lockdowns, reduced enrolment, higher and more expensive public health requirements, staff shortages and teetering financial solvency.  Families working from home, reduced employment, high-fees and fear of transmission in group settings have all contributed to the frailty of the sector. 

A recent report from the Canadian Centre for Policy Alternatives paints a bleak picture of the devastation. Most child care centres were closed as a result of legislated shutdowns in the first wave. However, even after re-opening in the fall of 2020, most child care centres across the country experienced significant enrolment drops, especially in Ontario.  Of the top 10 cities in Canada most affected, enrolment dropped between 35 and 60%. 

The Ontario Coalition for Better Child Care revealed Ontario Ministry of Education data that showed between March 2020 and 2021, 174 centres closed permanently while 116 new licenses were issued, resulting in a net loss of 58 child care centres – the first net loss of child care centres in over a decade.   A City of Toronto 2021 budget report  said “Supports of $142.5 million could be required from the other levels of government for the duration of the pandemic in order to protect existing capacity and meet the diverse needs of families.”  

Immediate, significant and continued operating funding is required to preserve existing child care services across the country – programs that are critical to Canada’s economic recovery. 

What could a national Early Learning and Child Care system look like for families?

As we emerge from pandemic impacts, Canada needs a new vision for a system of early childhood programs. What could it look like? Every community, large and small, urban and rural, in every province and territory, could have a range of   high-quality, not-for-profit, affordable early learning and child care (ELCC) services that support healthy child development,  encourage workforce participation and respond to unique community needs. 

Services could include: regulated child care centres and home care; provide part-time, full-time and non-standard hours and seasonal care; include kindergarten, pre-primary and before-and-after-school programs and child and family centres; and programs that are inclusive, culturally-responsive, and integrate children with different abilities. 

What does the Federal government need to do to create it? 

The federal government must recognize provincial governments’ jurisdiction for the management and delivery of child care services. However, as it has done in the past, the federal government can also use its “federal spending power” to support the development of a Canada-wide program with national objectives that promote equitable access to services across the country.  The existing Multilateral Early-Learning and Child Care Framework agreement could be a starting point. 

A comprehensive Canada-wide system would need key components: a strong policy framework with clear principles and objectives; significant, predictable and sustained funding; effective public administration; implementation plans with targets and timelines; transparent accountability mechanisms embedded in intergovernmental agreements and legislation. The federal plan must recognize the special status of Quebec, and reflect principles of self- governance, cultures, languages and traditions of First Nations, Inuit and Metis people and Indigenous communities. The new program should also recognize the important role that municipalities play in the child care system in Ontario, and promote a tri-lateral approach to negotiations and agreements. 

As history has shown us, the challenge for the federal government will be finding the right balance between the national interest and the interests of provinces and territories. But that balance cannot compromise on equitable access, program quality or public accountability.  Nor should the federal government, if confronted by provincial “hands-out and jurisdictional-elbows up” politics, accept false solutions rationalized with regional difference or personal choice arguments.  

The 2021 Child Care Budget

So, what should we see in the 2021 Federal Budget? The government of Canada should:

1. Commit to a Canada-Wide, Publicly-funded System of Early Learning and Child care Services for all Canadians  

  • Commit the federal government to building an Early Learning and Child Care system in partnership with provinces, territories, Indigenous communities (and municipalities in Ontario) with recognition of special status of  Quebec and First Nations governments 
  • Building on the Canada Multilateral Early Learning and Child Care Framework commit to a program which includes national objectives, bi-lateral agreements and funding conditions,  enshrined in legislation, that will create high-quality, affordable, public and not-for profit services, with equitable access and responsiveness to local communities

2. Fund and Stabilize the Existing Sector
Work with provinces, territories, and Indigenous communities and First Nations governments to:

  • Establish and invest $10M for a robust-capacity secretariat and inclusive stakeholder table
  • Immediately transfer $2.5B Stabilization Funding to preserve current services and mitigate the COVID pandemic impacts
  • Develop and finance workforce strategies to recruit/retain Early Childhood staff through equitable wages, benefits, training incentives and safe working conditions  

3. Expedite Intergovernmental Cooperation and Transparency
Work with provinces, territories, and Indigenous communities and First Nations governments to:

  • Establish transparent stakeholder consultation and intergovernmental negotiations tables with provincial, territorial and First Nations governments 
  • Work provincial, territorial, First Nations partners to expedite the development  of program principles and objectives, accountability and reporting mechanisms, funding and legal frameworks

4. Plan and Fund Growth
Work with provinces, territories, and Indigenous communities and First Nations governments to: 

  • Establish phased targets and outcomes, comparable indicators and funding for multi-year service plans to achieve equitable access, improve quality and increase affordability across Canada
  • Provide predictable, upfront and ongoing, inflation-protected funding transfers to achieve growth targets, with $2.5 billion additional funding per year ($10B annually by year four)
  • Provide adequate funding flexibility to provide capital funding for new facilities, operating and administration funding to expand services, increase salaries and reduce fees
  • Target additional funding for special needs children, accessibility, Indigenous programs, northern and remote communities, and workforce recruitment/retention strategies including equitable pay and benefits for Early Childhood staff
  • Restrict funding to investments in services – not tax benefits. 

Child care as a Commodity or Public Service?
Some provincial governments and political parties, inspired by market-models and social- conservative ideas, believe families should make, and pay for, private child care arrangements with the help of tax credits or cash bonuses. They also believe that child care, like other commodities, can be left to the marketplace. But tax breaks don’t create child care services, ensure quality or protect children - nor does the profit motive in human services. Most developed countries have taken a different path, making child care a basic public service, like education and health care.  

Only governments can plan, develop and fund a system of services that protects the public interest and promotes public objectives. A system with standards and oversight to make sure children thrive in safe, enriching learning environments; a professional workforce with pay and benefits that reflect the value of their work; and governance that ensures funds are spent effectively and accounted for publicly.  

The tragic fate of too many elders living in for-profit care homes during this pandemic should serve as a clarion call for all governments: Canada’s expanded, renewed system of child care services must be based on building a public system of high-quality, well-funded, non-profit services only.