The cost of living is up, along with inflation and mortgage interest rates. The good news is that saving on childcare is no longer as much of a pipe dream, thanks to the $10-a-day childcare plan introduced by the Canadian government. It is now offered across the country, and parents are already saving more on childcare expenses.
When childcare is too expensive, many parents are forced to choose between their careers and childcare. Parents, especially moms, often drop out of the workforce in order to care for their children. However, when high-quality childcare is publicly accessible and affordable, parents may be able to make different decisions about their careers – and on their own terms.
What is the $10-a-day childcare plan?
The Canadian federal government created and introduced the $10-a-day regulated childcare plan on a national level. It has been in process for a few years now, and all provinces and territories are on track to offer it soon. The goal of this program is to help young families with affordable childcare. The cost of childcare can be really high, and affordable options can help make saving and re-entering the workforce on their own terms easier for parents.
Since 2016, the federal government has supported this program with almost $40 billion in investment. Of this, around $30 billion was invested as part of Budget 2021. Employment and Social Development of Canada (ESDC) aims to create 250,000 new spaces for affordable childcare by March 2026.
In May 2024, the Government of Canada enabled $625 million in additional funding for provinces and territories in order to build more childcare spaces. Budget 2024 includes a $1 billion Childcare Expansion Loan program, which will help fund even more spaces, especially through public and not-for-profit childcare service providers.
Savings for families
The $10-a-day childcare plan aims to support the development of accessible and high-quality childcare. By reducing costs and creating more affordable spaces, this program aims to provide a solution to the years-long waiting lists that many parents currently face.
The estimated savings from this plan varies by city but often falls between $5000 to $10,000 a year. Parents in some provinces and cities may end up saving even more. Some estimates are:
- $19,790 in Toronto, ON
- $11,376 in Vancouver, BC
- $7,416 in Fredericton, NB
- $14,322 in Iqaluit, NU
- $8,877 in Halifax, NS
- $13,700 in Alberta
- $8,500 in Ontario
- $6,000 in Nova Scotia
- $14,300 in Nunavut
Benefits for families
Minister of Finance Chrystia Freeland acknowledged the high cost of childcare: “Young families who don’t yet have access to affordable childcare spaces are paying nearly a second rent or mortgage payment for unregulated childcare. This is unfair to today’s generation of parents, including Millennial parents, who need and deserve the relief of $10-a-day spaces.”
When childcare is more affordable, it also becomes more accessible. Families not only end up saving but are also able to consider career decisions that may not have been possible otherwise. Parents, especially moms, are able to re-enter the workforce sooner. They can restart their careers, as well as contribute to the nation’s economy. It keeps more money in the pocket of young parents, which is better for the children too.
In 2023, core-aged mothers of children under six in Canada had a record 79.7% labour force participation rate. There is a possibility of adding an additional 240,000 people to the workforce through this program. Parents who have put their careers on hold due to a lack of affordable childcare are likely to benefit the most from this program.
Economic benefits
Investing in childcare support has the potential to benefit Canadians as a whole. The broader economy sees a return between $1.50 and $2.80 for every dollar invested in ECE.
The $10-a-day childcare program is successfully running in over half of all provinces and territories, as of March 2024. Some, like Quebec and the Yukon, had already successfully implemented this program on a provincial level before the country-wide plan took shape. In Quebec, women with children under the age of three have one of the highest employment rates in the world. In fact, by simply introducing affordable childcare, Quebec’s GDP increased by 1.7%.
Effects on workers, pay and the childcare Industry
Under the new $10-a-day childcare plan, 40,000 ECE (Early Childhood Education) workers are to be added to the workforce. There are plans to improve working conditions, in part by creating new childcare spaces that can provide high-quality services. The Canadian government also plans to increase hourly wages for ECEs to $23.86, taking it from one of the lowest to one of the highest starting wages in the country. Currently, there are not enough qualified ECE workers to address the shortage. Consequently, many licensed childcare operators are not operating at full capacity, even though they may have space in their facility to accommodate more children.
Many childcare service operators also feel that the program is underfunded and that they cannot keep up with inflation, since signing up for this program meant that their fees were frozen at the amounts they were at when they signed up. They cannot charge additional funds to the parents, nor is the government subsidy sufficient to make up the difference. On top of this, there are also thousands of dollars of expenditure for the centres to be audited, in order to meet program requirements and prove their continued qualification for the program.
Over time, waitlists have grown dramatically, and the introduction of this program seemed to spur it on further. At this point, many children age out of the program while being on the waitlist the entire time. By incentivizing ECE as a profession, investing in new spaces, and supporting existing centres, the $10-a-day plan may be a boon for many younger parents.
Key takeaways
The $10-a-day program aims to make high-quality childcare more accessible and affordable. The Canadian government recognizes that the cost of childcare is too high, and parents sometimes need to choose between advancing their careers or taking care of their children.
By introducing a more accessible childcare program, the government wants to help young families increase their savings and have the ability to enter or re-enter the workforce. Since 2016, the federal government has invested almost $40 billion towards this program. As a result, parents are seeing around $5,000 to $10,000 per child, per year. It could also prove beneficial for Canada as a whole – the economy could end up saving 1.5x to 2.8x return on investment on ECE.
While there are some growing pains with the program, the federal government seems to be taking measures toward ensuring the $10-a-day childcare program is a success.
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