NCPA - National Center for Policy Analysis


April 11, 2006

Canada's politicians disagree on one of the nation's major issues: how best to support families with children, says the Fraser Institute. The liberals favor a universal day care program, while the conservatives favor a program that supports parents.

The liberals' program would cost $5 billion for a national system of early learning and child care, and an additional $6 billion for new child care spaces. However, this approach would not satisfy the needs of Canadian families. For example:

  • When asked to rank their preferred child care arrangement on a scale of one to five, on average, Canadians picked formal day care centers last, and said they would rather have their children cared for by a partner, a parent or other relative.
  • A similar child care program introduced by Quebec crowded out private and informal childcare alternatives, because the program only cost five dollars per day.
  • The neediest children make up less than 20 percent of total enrollment, and furthermore, they tend to go to lower quality day cares than children from upper income families.
  • By contrast, the conservatives' $10 billion program would give an annual $1,200 cash allowance to parents, regardless of which means they choose to care for their children.

However, taxpayers must ultimately finance this multi-billion dollar entitlement program. A more sensible and less bureaucratic solution would be to simply cut marginal tax rates, leaving working Canadians better off.

Source: Sylvia LeRoy, "Child Care Choices," Fraser Institute, February 2006.


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