The truth about wasteful daycare funding
The City of Toronto is asking you, Canadian taxpayer, to pay for most of its new, expansive daycare plans. But Toronto actually has a surplus of daycare spaces.
Municipal politicians have adopted a plan that calls for the creation of 30,000 daycare spaces over the next decade with funding requirements as high as $2.6 billion. Provincial and federal taxpayers will be asked to foot 80 per cent of the bill.
However, Toronto has a surplus of more than 4,600 daycare spots. And that surplus is growing. Thanks to a Freedom-of-Information request filed with the city, think-tank Cardus has learned that Toronto’s daycare surplus has grown by 89 per cent since 2009. If you take out 2017, since we’re only partway through the year, Toronto’s daycare surplus has still grown by 45 per cent. What’s going on? City officials will tell you that the empty spaces exist because parents can’t afford them. That’s true in some cases but it’s not the full story. (And where true, it would seem increasing subsidies, not building spaces, is the appropriate response.)
Polls show parents prefer one parent be able to stay home. If that’s not possible, they choose a relative. Next choice? A local neighbourhood home care centre that’s small and accessible.
Regardless of where you live, there will be a tug-of-war among Canada’s cities over child-care funding. Ottawa is plunking down $7.5 billion over a decade for the purpose. As decision-makers consider how (and where) to spend that money, there are some important questions to ask.
Parents prefer another parent or relative look after their children, followed by neighbourhood homes. Governments prefer more jobs — for the bureaucracy and for mothers of young children — to increase gross domestic product and the tax base. So they choose institutional, centre-based daycare spaces. If this is the case in Toronto, it could be true in Halifax, Winnipeg or Vancouver.
A better alternative is to offer money to families, not centres or spaces. That allows parents to make choices without being told the kind of care they’ll use.
Highly-subsidized spaces don’t reflect demand, they distort it.
One study makes this point. The Licensed Child Care Demand and Affordability Study done in Toronto found that the city would have to subsidize daycare spaces substantially before parents would increase their use. Once the created demand is high enough, they then need to build more daycare centres, which they then ask everyone in Canada to pay for. It’s beneficial for government. But is it beneficial for you?
There are policy options to help parents and families get the child care they need. We won’t find them, however, if the only road we take involves government making choices for parents.