B.C. Finance Minister Carole James visits a Victoria daycare on the eve of her first budget, allocating $1 billion over three years to expand child care, Feb. 19, 2018. (Tom Fletcher/Black Press)

Quebec daycare subsidies offer warning for B.C., study says

Over-55 women more likely to join paid workforce than young mothers

B.C. is following in the footsteps of Quebec 20 years ago, rolling out a subsidized daycare program to help mothers get back into the paid workforce.

A new study by the Fraser Institute compares the Quebec experience to B.C., where the new NDP government has embarked on a 10-year plan to provide universal daycare. Using Statistics Canada and other data, it finds that the employment and other benefits of subsidizing child care may not be what the B.C. government expects.

Quebec established $5-a-day universal daycare in 1997, when the employment rate for mothers was just under 70 per cent. That has risen to 83.1 per cent by 2017. But B.C. is starting with a maternal employment rate of 78.8 per cent, so the room for employment growth is substantially less in B.C., the study concludes.

Increased workforce participation was the basis for the B.C. NDP’s promise in its 2017 election platform that heavily subsidized daycare would pay for itself over the long term, through greater income tax revenue to the province.

Statistics Canada data show that in the 20 years of the Quebec program, employment among women aged 55 and over rose almost twice as much as employment by women of child-rearing age, 25 to 44.

The study also found greater employment increase among women 25-44 in Atlantic Canada, which did not have a subsidized daycare program. That may have been due to the federal Conservative government’s tightening of Employment Insurance rules in the region, a policy reversed by the Justin Trudeau government.

Finance Minister Carole James announced in her February budget that B.C. is committing $1 billion over the next three years, to provide 22,000 new licensed daycare spaces and add more training spaces for early childhood educators.

RELATED: New spaces a step to universal child care

The bulk of the B.C. NDP commitment, $630 million, is to subsidize parents and licensed daycare providers. For parents, the per-child subsidy ranges from $330 to $1,250 per month, reducing as income rises and falling to zero for households with a gross income of $111,000 per year.

“Policymakers in B.C. should heed Quebec’s warning, and instead consider providing resources directly to families to help cover the costs of whatever individual approach to daycare works best for them,” said Vincent Geloso, a Fraser Institute researcher and author of the study, Subsidized daycare – What British Columbians can learn from Quebec’s 20-year experiment.

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