Learn from Quebec: B.C. can afford $10-a-day childcare, say economists
CCPA study shows more mothers in workforce would grow economy, cover large part of program costs.
A $10-a-day childcare program in this province would largely pay for itself through the considerable boost to provincial and federal government revenues from more women participating in the workforce, according to a new study.
“Universal childcare is entirely affordable for B.C., either as a federal-provincial partnership or a B.C.-only program like the one in Quebec,” said Iglika Ivanova, a senior economist at the Canadian Centre for Policy Alternatives and author of Solving BC’s Child Care Affordability Crisis: Financing the $10 A Day Plan.
The CCPA study builds on research by economist Pierre Fortin that found large and almost immediate economic and fiscal benefits from the provincial childcare plan launched in Quebec in the late 1990s. It enabled more women with young children to return to work, which boosted Quebec’s economy and generated significant returns from higher tax revenues, reduced social assistance for families with children, and lowered reliance on other income-tested benefits.
Similar large economic benefits predicted in B.C.
“It’s not unreasonable to expect the $10-a-day childcare plan in B.C. to produce similarly large economic benefits,” says Ivanova. Her research finds that if B.C.’s experience were similar to Quebec’s, it would significantly increase the workforce participation of mothers of young children, grow B.C.’s economy by $3.9 billion per year, and generate about $1.3 billion in revenues for the provincial and federal governments.
The study models implementation of the $10 A Day Child Care Plan, an integrated early education and childcare system proposed by B.C. childcare experts. Over a 10-year period, the plan would reduce fees to $10 a day (waived for families with incomes under $40,000 a year), create enough spaces for all families who want them, and increase the quality of care.
The cost of the $10 A Day Plan has been pegged at $1.5 billion, $200 million more than the increase in provincial and federal tax revenues it would generate.
Without federal participation, B.C. would need to raise a larger amount — approximately $870 million per year — because the boost in federal tax revenues could not be counted in the provincial financing plan. The study shows how these remaining funds could be raised using a series of modest tax reforms, staged in gradually over a 10-year period, with the costs shared fairly among all British Columbians:
• Making the temporary top income tax bracket permanent and adding a new one for the richest British Columbians raises $475 million and makes the income tax system more fair;
• Modest corporate income tax increases raise $270 million, and reflect the benefits of childcare for businesses;
• Small personal income tax increases raise $140 million, amounting to only $20-$80 per year for the vast majority of British Columbians.
Current tax credits don't create new child care spaces
“Canada invests very little in early childhood education and care, and so does B.C.,” says Ivanova. “The federal and provincial governments provide childcare tax credits, but these only make a dent in the costs, and do nothing to create new childcare spaces.”
“Under the proposed financing plan, families with young children would save thousands of dollars, and mothers who want to work would be able to,” says Ivanova. “For the rest of us, pitching in a little is a bargain for what we’d get with quality affordable childcare: healthy child development, improved social inclusion, more gender and income equality and economic prosperity.”
Lynell Anderson, with the Coalition of Child Care Advocates of BC, one of the groups that developed the $10 A Day Plan, says the choice is clear.
“We can continue to watch families struggle with high parent fees and long wait lists, settling for unregulated childcare with no monitoring or oversight, not to mention women having to give up their paid work and career goals," she said. "Or... we can choose from a range of equitable and affordable financing options to implement the $10-a-day childcare plan."
"Given the substantial and widespread benefits at stake, even in the short term, we can’t afford not to make this investment.”