On the Conservatives’ so-called Choice in Child Care Allowance plan

Earlier today at a rally for Ottawa-South Conservative star candidate Allan Cutler (former mid-level bureaucrat-turned-whistleblower employed within the Sponsorship Program bowels of the federal Public Works and Government Services Canada), Conservative leader Stephen Harper announced his party’s new national child care plan. It is two-fold. One is the “Choice in Child Care Allowance” and the other is the “Community Childcare Investment Program”. The first would give all parents $1,200 per year in cash (before taxes, which Liberal candidate and Minister of Social Development Ken Dryden estimates would amount to a paltry sum of $1,000 per year after taxes) to use for child care purposes. For instance, a family whose parents both work could use it to put towards a space for their child at a daycare or share it with a grandparent who agrees to look after their kid while they work. Or, a stay-at-home mom could use it for food, clothing, and toys for the child that they look after twenty four hours per day, seven days per week.

My take: the only option where this after-tax amount of $84 per month would be beneficial for working parents is if they have a willing grandparent or other close family relative that is able to look after the child daily. Otherwise, with professional child care estimated to cost $25 per day ($175 per week, $700 per month, and $8,400 per year), $3 per day under the Conservative plan clearly will not be helpful – even when combined with the current National Child Tax Benefit and childcare expense income tax deductibility.

Further, it’s bad on three more fronts. Because the Choice in Child Care Allowance is not tied in any way to income, it amounts to a huge tax refund for high income families earning more than $70,000 per year. This takes away precious revenues away from government social programs that benefit lower-income families. Secondly, because the $1,200 is based on a per child basis, it could potentially encourage an explosion in pro-creation, causing families to pop babies out at a rate one per year until they have six or seven kids. And finally, it adds more government bureaucracy because of the need to hire more staff to administer yet-another-benefit program. Rather than simply increase the existing Canada Child Tax Benefit, this plan appears to be ideologically motivated as the CCTB was the brainchild of Finance Minister Paul Martin the mid-90s and the Conservatives want their own “give-money-back-to-the-people” program they can tag for themselves. It’s a publicity stunt at its worst.

The second plank of the Conservative child care strategy is its $250-million per year initiative (the “CCIP”) to create workplace child care programs partnering with not-for-profit child care providers by providing companies with a $10,000 tax credit per space. That will amount to 25,000 spaces per year, they claim.

My take: I don’t have statistics back this up or anything, but I know there are more than 25,000 children in need of child care in Canada presently so this program appears to be woefully underfunded before it even gets off the ground. Further to this, Trinity-Spadina NDP candidate Olivia Chow said it doesn’t create any net new child care spaces. Moreover, while workplace child care programs are good, I’m not sure giving a company a huge tax credit of $10,000 per space created is the best, most efficient use of tax revenue. Consider Minister Dryden’s earlier estimate on CBC Newsworld’s “Politics” broadcast that it costs about $8,000 per year to create and fully fund a child care space. It would be better if the federal Department of Social Development partnered directly with for-profit and not-for-profit child care providers and gave them this money directly. Do the quick and easy math and you’ll see this amounts to immediate savings of $50,000,000 annually under my child care idea versus the Conservative strategy.

Coming up soon: I’ll take my readers on a cross-country journey to what I expect to be intriguing ridings to watch on election night, what ones could be nail-bitingly close races, which ones have star candidates competing in them, and what ones could will get downright nasty. I’ll profile one riding per day until election day – broken up only in the event of a major breaking story on the campaign trail. Stay tuned.

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2 thoughts on “On the Conservatives’ so-called Choice in Child Care Allowance plan

  1. 1) What is wrong with offering a supplement to existing childcare programs? What about workers in rural areas who need to rely on family/neighbours to provide daycare services?
    2) Is $1200/year enough to tempt people into having more children?
    Doesn’t Canada need more people since our birthrate isn’t keeping up with the deathrate?
    3) Should the federal government even be involved in daycare? Shouldn’t it be a local issue like garbage collection?

  2. David, you are quite right about child care possibly being an issue for local government to handle (and fund). However, because it’s so expensive, I believe it should one of those issues (like transit, road infrastructure, and affordable housing programs) that should be cost-shared between all three levels of government and, where appropriate, partnered with the private sector.

    As far as your first question goes, there’s nothing wrong with it unless it takes money away from existing programs.

    $1,200 *may* be enough to tempt people into having more children and that may be positive. However, I think it would be far better to raise allowable immigration quotas substantially and, by extension, provide Canadian accreditation to foreign post-secondary education credentials held by new immigrants and having them simply write a Canadian equivalency and competency exam in that area.

    Ciao,
    Doug

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