With expectations of a surplus in next year’s federal budget, plans are beginning in earnest on how to spend it.
The NDP recently announced its plan for a universal national daycare program for families. Under the NDP plan, parents would pay only $15 a day for daycare under a system that seeks to emulate the popular program currently in place in Quebec.
I can certainly appreciate the underlying goal of universal daycare. Childcare is pricey and it is not uncommon to pay $700 to a $1,000 a month for the service. The financial pressures that these costs impose on single parents and low-income families seem unimaginable. Even with existing government subsidies, the cost of having even a small family of two or three children in daycare puts incredible strain on the family budget.
The average income for a Canadian single parent household in 2012 was $39,350 (about $2,700 a month after taxes) which doesn’t leave much money for rent, food or anything else once you’ve paid between $1,400 to $2,000 to put a couple kids in day care. It is easy to see how a plan that aims to get the family’s monthly daycare bill down to around $300 per child is an appealing policy.
Certainly in our culture the care of children is seen as primarily the obligation of the parents, but there is also a broader public interest in ensuring there is a labour force of the future. Without children who will pay for the care of tomorrow’s elderly?
The baby boomers have created a demographic time bomb that is scheduled to go off right at a time when today’s parents are already being squeezed between the twin pressures of student loan debt and rising housing prices.
The ratio of working Canadians to retirees is forecasted to drop from 4:1 to 2:1 over the next two decades. At the same time we face a future of rising health care costs, unfunded public sector pensions, a lack of retirement savings for other employees, a woefully inadequate Canada Pension Plan, and a retirement age that was set back when people lived to average age of 70. It seems likely – seniors being the consistent voters that they are – that the workers of tomorrow will be expected to pick up the tab for the care of retirees. As such, this is not the time to make having a child prohibitively expensive.
Having said all that, it is one thing to acknowledge that there is a problem, and another to agree on a solution. The NDP plan is certainly bold, ambitious and well-intentioned. There are more arguments in support of universal daycare than I can acknowledge within the limited scope of this column.
But, on balance, I do not think it is the right choice.
For whatever reason, ironically named “universal” programs fairly consistently suffer from a lack of supply, with many people left on the outside looking in. This is certainly the case in Quebec where parents face a shortage of spots and long wait lists.
Universal daycare is also a very blunt instrument and doesn’t make any effort to target those who truly need the help. Politicians like to appeal to “working families,” but the reality is that not all “working families” are the same. Certainly those families that are paying a crippling portion of their family income towards childcare should be given a financial break in one form or another.
But universal daycare also stands to benefit many families who simply do not need government help. There are many working families higher up the income scale with more than sufficient incomes to pay for their own daycare. In fact in Quebec, spaces are disproportionately secured by middle and high income families anyway.
An argument can be certainly be made that, at this point in history, it would be unfair that other Canadians – many of whom are dealing with various financial challenges of their own – be forced to subsidize the childcare of the well-to-do.
There is also the nagging issue of choice around which much of the political debate about childcare centres. The reality is that some parents want to care for their children at home and the NDP plan has nothing in it for them other than a continuation of the Conservative party’s inadequate $100 Universal Childcare Benefit. It is understandable that the NDP wants to give parents the choice of staying in the workforce, but at the same time should not pressure them into doing so.
Parents counting on seeing $15 daycare anytime soon probably should not get ahead of themselves. The NDP plan assumes that the provinces will cough up approximately 40 per cent of the cost of the program. The NDP is certainly not the first federal political party to promise big ticket items on the assumption that provincial governments will pitch in some cash, but they should also realize that most of the provinces are not anticipating surpluses in the way that the federal government is.
There is also the fact that after a month-long stock market correction and falling oil prices there is a distinct possibility that the surplus will not exist by the time the next election rolls around anyway. This may force parties like the NDP to dial back their spending plans.
Kyle Carruthers is born and raised Yukoner who lives and practises law in Whitehorse.