Expensive government child care is not a winning solution
By Lethbridge Herald Opinion of May 8, 2021.
There is a big difference between making something affordable and playing a shell game with the costs.
Unfortunately, the federal government is choosing the latter with its new child care program.
The 2021 federal budget allocated $ 30 billion over the next five years for a national child care program in an effort to cut costs for parents. This will be in addition to the $ 27 billion in direct payments parents already receive each year.
The budget says “it is time for the rest of Canada to learn from Quebec’s example”.
We should indeed learn from Canada’s experience with government-run child care centers.
And the first lesson is that these program costs tend to mount up quickly.
Since Quebec implemented its government child care program, costs have gone from $ 300 million in 1997 to over $ 2.7 billion this year. Even after accounting for inflation, that’s a six-fold increase.
Newfoundland and Labrador shows a similar picture. The government’s child care costs have tripled in the five years leading up to the increase in its subsidy per child.
Federal government debt will hit $ 1.2 trillion this year. If we couldn’t afford a federal day care program before COVID-19 when the deficit was $ 20 billion, which makes Finance Minister Chrystia Freeland think we can afford an expensive program and likely to inflate after simply posting a $ 354 billion deficit?
This expensive program should not be confused with a free meal for Canadians. It may save parents money today, but those savings will mean a big bill for their children and grandchildren.
There are more issues with government child care than just the finances.
About 55,000 children were unable to access a daycare space in 2019, according to the Auditor General of Quebec. This is despite all governments since the program was introduced adding thousands of new spaces every year.
As it is, there are about five kids trying to fit into every four taxpayer funded places. Due to this scarcity, people had to get creative to bring their kids to one of these places.
Thus, each year, approximately 30,000 Quebec children can bypass the government’s centralized space allocation system, according to the Auditor General of Quebec. They were able to do it because their parents know the right people.
Meanwhile, thousands more are on waiting lists due to a lack of social capital. At the very least, this problem highlights why taxpayers should not subsidize child care services for wealthy families.
Government can play a role in making child care affordable, but a large, overly bureaucratic program is not the way to go.
Affordability is determined by two things: how much something costs and how much money people have in their pockets.
And it is on the latter that the government should act. After all, income taxes, sales taxes, carbon taxes, and all other types of taxes are a family’s biggest annual expense. In fact, taxes are about 45%. 100 of a family’s budget, according to the Fraser Institute.
By taking less money out of families’ pockets up front, the government can improve affordability in all aspects of life, including child care.
And although Prime Minister Justin Trudeau has promised not to raise taxes, Budget 2021 introduces a series of new taxes and tax hikes, including higher tobacco taxes, a vaping tax, sale for digital services and a tax on luxury goods.
All this on top of recent alcohol and carbon tax hikes, as well as future carbon tax hikes and a second carbon tax. Not to mention the frightening tax hikes that lie ahead if the federal government does not have the courage to curb spending.
Although affordability and child care are major concerns for all families, putting in place an expensive government child care program and keeping the next generation with the tab is not. a winning solution.
Franco Terrazzano is the federal director and Renaud Brossard is the Quebec director of the Canadian Taxpayers Federation