The folly of embracing universal daycare

Quebec’s experience with government-subsidized daycare should serve as a warning for B.C.

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Vincent GelosoThe recent British Columbia provincial budget makes it clear that the government is forging ahead with plans to pursue universal government-subsidized daycare. But B.C. is not the first to go down this path and there are lessons to be learned.

While the 2018 budget didn’t explicitly call for $10-a-daycare – a key plank in the NDP’s election campaign platform – Finance Minister Carole James took initial steps to that end, announcing more than $1 billion in new spending on daycare over three years.

Twenty years ago, Quebec introduced universal government-subsidized daycare and that experience provides valuable lessons for B.C. Unfortunately, Quebec’s experience should be viewed more as a warning than a blueprint.

For starters, Quebec’s program has proven costly with the provincial government spending $2.3 billion last year, or $9,772 per child. That’s approximately double the cost per child (after accounting for inflation) from when the program was introduced in 1997.

Still, advocates claim that government-subsidized daycare will pay for itself. But the best available evidence suggests that, while the daycare subsidy in Quebec did increase maternal participation in the labour force, it didn’t do so on a large enough scale to result in an increase in tax revenue to cover the cost of the program.

And Quebec’s employment rate in 1997 among women aged 25 to 44 was lower than in any Canadian province today. When Quebec implemented subsidized daycare, the employment rate of women of childrearing age was 69.7 per cent, compared to 83.1 per cent in 2017. B.C.’s current rate is 78.8 per cent. So because B.C. would not start from the same low employment rate as Quebec in 1997, the gains in labour participation will likely be much smaller.

Beyond dollars and cents, what’s the effect of subsidized daycare on child development outcomes?

Some proponents argue these programs enhance a child’s readiness for school, leading to long-term gains in the development of skills and knowledge, and better socio-economic outcomes as adults.

But the research is varied. Studies finding impressive gains from daycare participation draw from analyses of small programs aimed at high-risk children who are most likely to benefit. There remain important questions about whether the benefits can be generalized.

The evidence from Quebec should certainly give us pause about that particular model. The gains achieved in school readiness appear to be negligible and, troublingly, there’s evidence of significant negative effects on non-cognitive abilities such as social and other ‘soft’ skills.

These warnings aside, there’s another fundamental question about the government’s plan to create additional daycare spots in B.C.: Is it even necessary?

A recent study examined daycare services in B.C. and found the provincewide average daycare vacancy rate was approximately 30 per cent (as of 2016), indicating a surplus of spots. Even in the densely-populated Lower Mainland, the average vacancy rate in the Vancouver and Richmond areas was 24 per cent.

While the vacancy rate is lower for some groups of children (infants and toddlers), the evidence doesn’t point to a widespread daycare space shortage. In cases where the obstacle to access for families is cost, the appropriate policy response would be to offer targeted financial support, not create a universal system with additional daycare spaces.

Ultimately, parents know what arrangement works best for their families. While some children may thrive in a daycare environment, the Quebec experience suggests that a one-size-fits-all approach is costly and unlikely to be effective.

Instead of following Quebec’s lead, the B.C. government should consider policy options that provide resources directly to families to help cover the costs of whatever individual approach to daycare works best for them.

Vincent Geloso is author of the Fraser Institute study Subsidized Daycare—What British Columbia Can Learn from Quebec’s 20-Year Experiment. available at www.fraserinstitute.org.


b.c. quebec daycare

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