Private sector is essential to a national childcare plan
For Melanie Ross, necessity is the mother of entrepreneurship as well as invention. After working in the childcare sector in Toronto for several years, she moved back home to northern Ontario to begin a family in 2006. “I looked around at the local childcare options and realized there was nothing that could satisfy my needs,” she recalls.
Ross had a specific vision of her ideal childcare in North Bay, about 350 kilometres north of Toronto. She wanted room for her kids to run around, plenty of wholesome meal options and a flexible, part-time schedule that would allow her own parents to care for her children a few days a week. “Everything I looked at had this very narrow definition of childcare,” she says. “It had to be full-time, five-daysa-week or nothing. And that didn’t seem proper to me.”
Dissatisfied with the options on offer, Ross decided to create her own. When her youngest son was just four months old, she opened Friends Forever Childcare in North Bay. Four years later she bought an existing childcare centre in Timmins, a remote mining town 400 kilometres farther north. She also operates a home agency that co-ordinates a network of 27 daycare providers who work from their own houses.
In chronically underserviced northern Ontario, Ross is providing over 300 licensed, much-needed childcare spaces. She has a clear vision of the services she wants to deliver, and her clients seem to appreciate her commitment to outdoor play, schedule flexibility and meal-time choice. Outside the pandemic, Ross’ centres are habitually full and profitable.
So why does the Trudeau government — a feminist government, we are so often reminded — want to exclude this successful female entrepreneur from its $30-billion, five-year national childcare plan? Precisely because she is profitable.
The single biggest item in a 2021 federal budget filled with eye-wateringly large expenditures is the new Canada-wide Early Learning and Child Care system, which commits Ottawa to lowering average childcare fees to $10-a-day nationwide by 2025-26 and simultaneously expanding capacity to handle the tidal wave of demand such a price cut is expected to set off. But there’s a catch. The budget says any money set aside for expansion is “to support primarily not-forprofit sector childcare providers.”
For decades it has been commonplace for advocacy groups, academics and unions to argue that for-profit operators cannot be trusted to deliver reliable, high-quality childcare. The same arguments are often made, with the same political intentions, in regard to nursing homes. But if the Trudeau government intends to indulge these vocal opponents of the private sector, it will be doing great harm to its own plans and the best interests of parents across the country. Rather than a problem, the profit motive is provably indispensable to Canada’s childcare system.
Across the country, the private sector accounts for an estimated 28 per cent of all childcare spaces. In British Columbia, Alberta and Atlantic Canada, for-profits comprise a clear majority. For this reason, any reduction in prices must include commercial childcare operators out of sheer necessity. The math simply won’t work otherwise. The same holds true for Ottawa’s growth
plans, as Quebec demonstrates.
The budget cites Quebec, which currently provides $8.50-a-day childcare, as the “pioneer” and model for Ottawa’s planned $10-a-day scheme. If so, it is difficult to reconcile the Quebec experience with the federal budget’s intention to “primarily” support the non-profit sector.
Of the 307,490 licensed childcare spaces in Quebec, official provincial figures reveal only 98,014 are non-profit Centres de la petite enfance (CPES) so beloved by the federal government. The remainder comes courtesy the private sector, including privately-owned centres that receive direct government subsidies, subsidized home daycares run by individuals for profit, and licensed private sector operators whose clients are eligible for tax credits. Twothirds of Quebec’s childcare spaces thus operate on a money-making basis. Further, almost all the expansion in the past decade or so has come from the private sector.
When Quebec first launched its $5-a-day childcare program in 1997, it relied almost entirely on non-profits for reasons of ideological purity. A moratorium was even declared on licensing new for-profit operations. But unionized, strike-prone CPES proved incapable of meeting parental demand and waiting lists quickly became lengthy and contentious. A disproportionate share of the coveted, highly-subsidized CPE spots were filled by high-income families, a clearly perverse outcome.
Successive provincial governments came to realize the private sector was essential to meeting parental demand. In 2003, Quebec lifted the moratorium on new for-profit centres. And in 2009 existing tax credits for parental childcare expenses
were increased to be roughly comparable to government subsidies for CPES. The response was dramatic. Between 2009 and 2019 the tax credit-fuelled private-sector component of Quebec’s childcare system expanded tenfold from, 7,000 spaces to over 70,000, a rate of growth the cumbersome non-profit sector simply cannot match.
Quebec’s experience demonstrates it is impossible to create a timely supply of new spaces while relying “primarily” on the non-profit sector. You can either expand the system or you can restrict participation by the private sector for political reasons. You can’t do both.
Beyond providing necessary capacity, the private sector is also a crucial supplier of innovation in an industry notoriously resistant to change. Like Ross, Karen Eilersen also decided to open her own childcare centre after becoming a new mother and finding herself dissatisfied with the choices available in her hometown of Barrie, Ontario, about an hour’s drive north of Toronto. “There were very few childcare centres in Barrie in 1998. And the ones that weren’t full, I didn’t want to put my children in,” she recalls, noting all the centres that failed to meet her standards were non-profits. Eilersen decided instead to open Discovery Child Care on a two-acre property in Barrie. Today it boasts a “Forest School” accreditation with most of its programming taking place outdoors. “Our whole philosophy is on connecting kids with nature,” she says, “We are quite different from most childcares.”
Amanda Munday faced a similar frustration. An ambitious tech industry administrator before having children, she found it difficult to get her career back on track after two maternity leaves. What Munday wanted was an affordable way to work part-time in an office environment in downtown Toronto. And when she couldn’t find it, she realized it was up to her to create it. The result was The Workaround, a unique, parent-friendly co-working space that opened in 2018.
Located in a former bank on Toronto’s busy Danforth Ave., The Workaround offers working mothers and fathers dedicated office space that can be rented by the day, week or month with professional childcare included on-site. “As soon as I opened, I realized I had found a market that existing non-profit daycares were not able to service,” says Munday.
Entrepreneurs such as Ross, Eilersen and Munday offer compelling evidence of how the profit motive fills niches ignored by traditional non-profit childcare providers. This creative disruption will be lost forever if Ottawa’s national childcare plan successfully sidelines the private sector.
In addition to allocating $30 billion to build a “primarily” non-profit system, the federal budget also — and without irony — commits $147 million to a Women Entrepreneurship Strategy. “Canadian women entrepreneurs are important to Canada’s economic success, but women face unique and systemic barriers to starting and growing a business,” the budget states.
Given that most childcare centre owners are women, Munday calls the budget’s claims to be helping female entrepreneurs “a joke.” And not the funny kind. “If I was considering opening a new childcare centre, I would be worried,” she fumes. The federal government “is putting a whole bunch of money into creating a system that could potentially push a lot of women out of entrepreneurship.” How’s that for creating systemic barriers?
The most charitable view of the Trudeau government’s promise to “primarily” fund the not-for-profit childcare sector is that it’s meant as a pander to noisy left-wing advocacy groups allergic to the private sector. If so, it’s a cheap shot that does a disservice to many hardworking female business owners. If, however, Ottawa intends to do more than just signal virtuously, then such a policy should be considered not just rude, but deeply problematic.
Quebec’s experience clearly demonstrates the impossibility of expanding a lowfee, high-demand childcare system without a dominant presence by the private sector. If Ottawa aims to follow the lessons of Quebec — rather than its mistakes — it should immediately abandon its stated preference for non-profit delivery and encourage as many entrepreneurs as possible to enter the market. The alternative will be interminable waiting lists with the best spots snagged by wealthy, well-connected families.
Beyond limiting growth, discouraging private-sector involvement will also leave the entire childcare sector less responsive to parental needs. As the offerings of Ross, Eilersen and Munday make plain, entrepreneurial talent and drive are the source of such crucial innovations as flexible scheduling, greater meal-time diversity, unique outdoor education opportunities and clever co-working office facilities with professional childcare attached. The non-profit sector won’t deliver this sort of change for the better.
We should be celebrating our childcare entrepreneurs, not treating them like dirty diapers.
AS SOON AS I OPENED, I REALIZED I HAD FOUND A MARKET THAT EXISTING NON-PROFIT DAYCARES WERE NOT ABLE TO SERVICE.