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Ottawa will have to sell provinces on daycare

Even as the Region of Waterloo was announcing plans to close the Elmira Children’s Centre by Aug. 20, the federal government was going all in on daycare, pledging in the budget to spend $30 billion over the next five years. The goal is to drive down the cost to parents to no more than $10 a day.

Some kind of universal daycare has been discussed for decades. Billions have been spent, though not in any uniform way. Now, the Trudeau government plans to deliver on a comprehensive plan, convinced the benefits – including to its own re-election hopes – outweigh the costs to an already massively indebted national account.

As with all its spending, the government refers to daycare spending as an investment that will create jobs and foster economic growth, encouraging more women to join the workforce. There have been plenty of studies to that effect. The plan may face a hurdle in that it relies on the provinces to take part, taking on some of the costs. That may not be workable for cash-strapped governments, or for those not keen on such spending.

Quebec already has a universal subsidized low-cost child care system, so the new money it will receive from Ottawa will help offset some of its costs. For every other province, taking part will mean coming up with more money. That may work easier with, say, British Columbia’s NDP government than with Doug Ford’s Ontario.

As critics have pointed out, provinces have plenty of reasons to be wary of Ottawa’s proposal to split the costs 50/50. The risk is that once the program is firmly established, the federal government may begin pulling back from its 50-per-cent position, as history indicates is likely given the experience with the likes of housing, welfare and, most notably, health care.

Deficits abound at both the federal and provincial levels, and Ottawa has more revenue levers, and the ability to download costs. Experience says that will happen, bringing higher taxes and more liabilities for provinces.

For now, however, it’s the rosy early days of a freshly minted budget promise.

Ottawa must now negotiate individually with the provinces. The initial goal is to cut in half the cost of daycare by the end of 2022. After five years, the target is $10 a day child care that will cost the federal and provincial governments $8.3 billion apiece to operate each year.

Minister of Finance Chrystia Freeland said the goal is to reduce the burden on parents of daycare costs, making the job market accessible to more people. She notes care expenses can run nearly as high as rent or mortgage payments in some cities, so the household savings could be significant.

In the region, for instance, the median cost of daycare is $1,150 per month. A $10 per day program would greatly reduce that cost to individual families.

Those savings have never been at issue: spreading out the cost to every taxpayer reduces the impact on users of such programs. The real debate has been about the fairness of such a universal program, a battle that quickly becomes ideological.

Those on the right have argued against any involvement, saying child rearing is a personal responsibility, not a government issue. Countering that from the left have been proponents of universal daycare akin to the school system.

It’s the latter argument the government is now making. Just as we all pay for schools whether or not we’ve got children, or our children have left school, a universal daycare system provides a societal benefit that warrants public spending.

The next step is to convince the provinces. And to hope voters agree, in keeping with the cynical view that this measure, like much of the 2021 budget, is about positioning the government for the next election.

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