The Costs and Benefits of a National Child Care System in Canada

by Monica Townson

The following is taken from the Executive Summary of The Costs and Benefits of a National Child Care System for Canada.

Canada faces a crisis in child care. The problem has been studied for almost 15 years now. From the Royal Commission on the Status of Women in 1970, to the Royal Commission on Equality in Employment in 1984, reports have urged the government to act. But in 1984, when almost half a million mothers of pre-school children had full-time jobs in the work force, there were only 172,000 licensed day care spaces across the country. The vast majority of children who need child care services are denied access to quality, licensed care.

Some of the recent studies have pointed out that our child care system in the 1980's is at the same stage of development as education in the 1850's or health care in the 1920's. Day care is under provincial jurisdiction and availability and quality of care varies from one province to another and even from one community to another. We have no national policy on child care.

The Canadian Day Care Advocacy Association (CDCAA) has recommended that "the federal government develop a comprehensive plan with long-term and short- term goals, for the implementation of universally accessible, publicly funded, high quality affordable day care." But some people have opposed public funding for child care because they say "it would cost too much." Yet, until recently, no one had ever really sat down to figure out what a national, publicly-funded child care system would cost. And those who say the country couldn't afford it usually overlook the benefits such a system could bring with it.

Economists have sometimes tried to use cost-benefit analysis to help policy-makers decide whether or not to implement a social program. But it's not easy to do, because you have to put a dollar value on the benefits to see if they outweigh the costs. And many of the benefits of social programs cannot be measured in dollar terms.

A universal, publicly-funded child care system would have major benefits for Canada's children and their parents: it could bring enhanced early childhood development for our children; make it possible for mothers who are in the work force while their children are young to develop stable and continuous work patterns, which would improve their lifetime earnings and help them to accumulate a decent pension for their retirement years; improve productivity of parents, who wouldn't have to worry about the child care arrangements they have made for their children while they are at work; and make child care services available to all children who need them, regardless of socio-economic status.

All these benefits are difficult to measure in dollar terms, so they often get overlooked in discussions about child care.

There are other, spin-off benefits and cost savings that can be measured or at least estimated. A national child care system would create jobs. That would lower the unemployment rate and mean savings in unemployment insurance benefits. And that's just one example.

To figure out what a publicly- funded system would cost, we have to answer a number of questions. How many children would have to be accommodated? Would the system provide for all children, or only those whose parents are in the work force? What should be the ratio of staff to children for the various age groups? And what wages would the staff get? How much should be allowed for administrative costs, and how much for the capital costs involved in expanding the existing system?

The cost of the system would vary quite a bit, depending on what combinations of assumptions are chosen. But with the help of a computer model, it is possible to cost out a range of different options, so that policy-makers can see what the possibilities are.