Universal child care subsidizes the wealthy

There are better ways to ensure daycare is available to families who need it

Kyle Carruthers

As a parent of two children, the cost of child care is a pretty common conversation piece in my day to day life. It is not cheap to get someone to care for your children all day while you’re at work.

We are privileged enough to be able to afford it. But for many others this isn’t the case, and if they were forced to bear the whole cost alone it would be absolutely devastating.

With the increase of households headed by a single parent or with both parents in the workforce it has become a significant social policy matter for governments in recent decades.

So what can be done?

I think it’s a good starting point to understand that child care is just plain unavoidably expensive. There isn’t really a whole lot that can be done to control costs. Profit margins are thin. Rarely is some capitalist daycare owner hoovering up profits and getting filthy rich on the backs of mom and dad.

The math is simple. You need to pay people to care for your children all day and there are limits imposed by law on how many children each child care provider can look after at a time.

Here in the Yukon, child care regulations require that there be one staff member for every four infants (children under 18 months), six toddlers and eight preschoolers (over three years old) in a child care centre.

The costs imposed by those limits are most obvious at the infant level. Even if parents are paying $800 or $900 a month for care — a hefty fee for most Canadian families to contend with — with minimum staffing ratios those fees barely cover the costs of the staff member charged with their care.

And that is just one cost that a child care centre would contend with. To start with, employees are entitled to breaks, lunches and vacations. Parental workdays vary, thus extending the number of hours the centre needs to be open and staffed for drop-off and pickup. Ultimately the centre needs to maintain even more staff than those ratios suggest.

There is the long list of expenses any organization needs to contend with — rent, insurance, janitorial services, administration, supplies, heat, electricity, and extra expenses.

There is also the issue of vacancy. Children come and go, often with little notice, leaving spots open temporarily and putting a real squeeze on revenues. Providers also need to deal with the demand for part time services which are logistically challenging.

As kids get a little older the staff ratios ease but the practical need for space increases, meaning higher rent costs.

Daycares must comply with a long list of rules, all of which cost money to comply with. If the centre serves food it has to meet certain standards. To ensure that the early developmental needs of children are met the government requires that a certain percentage of staff have higher levels of certification in early childhood education. As in all other things higher levels of certification attract higher levels of compensation.

So if childcare is unavoidably expensive how are parents to manage?

In the Yukon, the government offsets the cost of child care in a number of ways. Child care centres are eligible to receive a direct operating grant from the territorial government to help with some of those expenses. A means-tested childcare subsidy is offered to parents who fall below a certain income threshold — which at its maximum level can cover most of the cost of child care.

There are also the various supports offered at the federal level. Child care expenses are deductible up to $8,000 per child per year which can mean a significant return at tax time. There is also the Child Care Benefit — a tax-free, means-tested benefit created after the election by the federal Liberals rejigging of various pre-existing programs — that provides up to $6,400 a year per child to cover child care expenses.

There is certainly room for improvement. There are never enough spaces. And despite the various subsidies available, affordability is still a challenge for some families. But I think the mix of policy tools used by governments represent a reasonable approach to a challenging issue.

Moving towards a universal public child care system is a wildly popular policy plank on the left here in Canada and was something that the federal NDP called for in the last election.

It is not one I support.

The wait lists for Quebec’s $7-a-day public system shows that it fails to address one of the most vexing challenges facing Canadian parents when it comes to childcare — supply.

Creating such a system at this point would only shift public money to high-income families who, under the current system, bear much of the cost of raising their own children. Making the system affordable for those who need it most can be done in other ways.

I am not one to slavishly prefer market solutions, but it is difficult to see how government would do a better job managing this industry than the private and non-profit entities doing it now. The choice inherent in our current system — where parents have the flexibility to choose childcare that reflects their own needs and wants — is desirable as well.

Providing support to those parents struggling to pay their child care bills in the form of cash subsidies would seem to be a more efficient use of public money than — to borrow an apt cliché — throwing the baby out with the bathwater.

Kyle Carruthers is a born-and-raised Yukoner who lives and practises law in Whitehorse.

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