RED DEER, Alta. Oct. 27, 2016/ Troy Media/ – A confluence of headlines outlining dangers to the Canadian economy have a common thread: economic stress.
We read about high levels of household debt, unemployment, schools forced to deal with children living with stress at home, and declining birth rates leading to worries about who is going to power the economic engine when seniors retire.
More than ever, it takes two full-time incomes just to keep the roof over our heads.
Signing trade deals, building pipelines or pushing debt-funded infrastructure projects won’t fix this.
Not when taxes eat up half of a two-income family’s pay, and certainly not when paying for child care eats up another 22 per cent, as a recent Organization for Economic Co-operation and Development (OECD) study shows.
Why does the government need to tighten regulations on mortgages? Because young families can get in over their heads on mortgages, should interest rates rise someday – and eventually they will.
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During a period of rapid, inflationary growth, a generational surge in the 1970s and ’80s meant thousands of new families had kids.
We wanted to raise our kids in a house. A starter home cost a bit more than double the median salary of a single worker and was rising quickly. Today, that cost can reach – or surpass – 10 times the Canadian median income.
In the late 1970s and early ’80s, mortgage rates spiked above 20 per cent. And even though most mortgages totalled less than $75,000, young families were in over their heads.
The numbers have changed but that same potential exists today.
When my wife and I started having children, we survived on one income. That was because after paying taxes on a second income, plus child care costs, the second bread winner got very little bread for her labour. (Then as now, most stay-at-home parents were females.)
Today, I can’t see how everyday working families could possibly keep home and family on one regular income. The cost of a mortgage isn’t the only reason. The cost of child care is also a big factor.
According to the OECD, Canadian families pay more for child care than just about anyone in the developed world – up to 22 per cent of family income. The Liberal government’s much-vaunted family support program barely touches that.
If a second working parent essentially works for no take-home pay, what’s the incentive to work?
Not only is there a disincentive to work (and pay taxes), there’s also a disincentive to have children. If populations can’t be sustained by natural growth, and if we can’t pass our culture on to a sufficiently large next generation, what changes can we expect in our national makeup?
Almost all other nations in the OECD solve this with generously subsidized child care – costing 10 per cent or less of family income in many countries.
If two incomes are required for a Canadian family, and if a nation wants to benefit from educating women into career paths, we must subsidize quality child care for them.
Would we rather tell women not to bother getting a good education because their labour will only be eaten up by student debt, taxes and child care costs?
Would we rather see families default on mortgages in large numbers, or see the costs of our own homes plummet as fewer and fewer young families can afford to buy a home?
Would we rather signal to young people that having children is too much of a burden?
Would we rather rely on immigration alone for a stable population?
We’re always told that our people are our greatest resource. But in Canada, half of our child-producing population seems only to be a resource for governments, banks and daycare operators.
In my retirement, I’ve become a grandparent day home operator. It’s a lot of work for the money (yes, I’m being paid). But the pay is substantially less than what regular daycare for three children would cost.
Not every young working family has that alternative. And I can’t see how the federal government believes its new national support plan for young families fills any gap at all.
That unfilled gap – as much as the lack of a new pipeline, or a trade deal with Europe or infrastructure projects that never seem to materialize – is what holds back economic growth.
We’re not making best use of our best resource: our young people.
Greg Neiman is a freelance editor, columnist living in Red Deer, Alta. Greg is included in Troy Media’s Unlimited Access subscription plan.
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