Ontario is working on a new “pay what you want” subsidy program for low-income parents looking to provide their children with daycare—and it could get to $10 per day care by 2023, partly funded by a carbon tax. But that is a long way away in a province where daycare rates top $20 per hour. And in a province where childcare is relatively affordable, the average infant daycare cost is actually more than $15,000 a year.
Right now, a father earning Ontario’s minimum wage of $15.40 an hour would have to spend $1,285 per month on childcare if he and his wife were to send both of their children to daycare, according to the Canadian Centre for Policy Alternatives. Of course, costs vary by location, which is why Ontario, which has the highest cost of living in Canada, also intends to encourage cities to explore co-working spaces or “free-enabling” zones so working parents can get more value for their workers’ time. But while the program’s progress is being cheered by advocates, costs could become a barrier. On Monday, Ontario NDP leader Andrea Horwath announced she would not support the plan if it resulted in substantial cuts to funding for existing children’s programs.
And even though Ontario’s all-day daycare program was instituted in 2010, and a new generation of parents with pocketbooks continues to get higher-quality childcare, there is still a backlog of 35,000 unfilled spots. Childcare costs in Ontario have more than tripled in the past 10 years, and the wage has a lot to do with it, like Ontario’s high cost of living and low minimum wage. And even if per-unit costs drop to the Canadian rate of $5.60 per hour, they will still be higher than in nearby jurisdictions.
Parents in Australia have voted to allow the government to raise their daycare rates 10 percent annually as long as 30 percent of revenue comes from taxes on the industry. Their $5.18 per hour rate may not even be adequate.
Reform leaders like Elizabeth Warren and Alexandria Ocasio-Cortez are proposing something similar: a $15 minimum wage and universal childcare as part of their agenda. In a country with the second-highest cost of living in the world, the challenge is obvious. Other countries have recognized this and tried to grapple with the problem differently. One new solution is seeking ways to house more subsidized workers in communities with lower costs while leveraging other social services for financial sustainability. This policy would also have to support at least high-quality childcare so that families could not justify an expensive premium for a school that would help their children in their academic and life skills.
What do you think? Will Canada move in this direction? And if not, what has worked elsewhere?
Gerry Rubin is the co-author of “Raising the Next Generation: Why Tax Reform and Childcare Reform Are Necessary for Our Children” (ISBN: 978-13963-6357-6), which will be released on March 12.