How much do you really know about child care in Canada?

by Jennifer Robson

Three things to know about child care in Canada:

1.    Most but not all families use child care.  Among those with preschool-aged children, about 60% of families rely on some form of child care, whether a daycare centre, homecare, a nanny, a relative or other options.

2.    The Child Care Expenses Deduction lets parents deduct child care costs from their income for both federal and provincial income taxes.  The ceiling on the deduction is about to be increased by $1,000, the first increase since 1998 but still not enough to keep up with inflation.

3.    The Universal Child Care Benefit is a federal monthly taxable income benefit paid to parents with children.  It was introduced after the 2006 election, and after cancelling the 2005 federal-provincial agreements on child care. The UCCB is about to be increased by $60 per month for kids under 6.  It’s paid at a flat rate per child, regardless of family income or actual child care costs.  Based on 2011 tax data, $1 out of every $4 of UCCB goes to a parent with less than $100 a week in income but it’s almost certain these families had another primary breadwinner.

Three myths about child care in Canada:

Myth #1: There are only enough licensed child care spaces for 1 in 5 Canadian children.

Reality:  That estimate counts only centre-based spaces and leaves out licensed home care.  For children ages 1-4 years (the peak daycare years), outside Quebec, the ratio of kids to spaces is 2.9:1, not 5:1.[1]  If we believe that the 40% of families who aren’t using any child care are doing so by preference, then the ratio drops even further to 1.7:1.

Myth #2: We need federal policy to create quality, affordable child care spaces.

Reality:  Child care and early learning are areas of provincial jurisdiction.  Provincial legislation governs the licensing and regulation of child care. Provincial and/or local governments are also in charge of child care subsidies and publicly-operated child care centres.  Federal funding, through both the block Canada Social Transfer and the National Child Benefit Governance and Accountability Framework, does contribute to a range of early learning and care programs in all provinces and territories.

Myth #3: The Quebec model is a success to build on across the country.

Reality:  Quebec’s universal child care program has been found to increase maternal employment and government income tax revenues, but it hasn't improved school-readiness for children, and seems to have had some decidedly mixed impacts on other indicators of child development and parental well-being.

Jennifer Robson is an Assistant Professor at Kroeger College, Carleton University.   She teaches courses on public policy, politics and research methods. Her research interests include tax policy, household financial behavior and poverty in Canada.

---

[1] Author’s calculations based on Census data and data in “Public Investments in Early Childhood Education and Care in Canada 2012”, published by Employment and Social Development Canada.