Is the Federal Daycare Program Achieving Its Stated Goals?

In its April 2021 budget, the federal government announced plans to spend up to $30 billion over five years to create 250,000 childcare spaces by 2026 with a subsidized fee of $10 a day.
The stated goals were three-fold: to provide more jobs in the childcare industry; to enable parents (especially mothers) to join the labour force in greater numbers; and, to provide better care for young children.
This paper looks at whether the government is achieving its first two goals.
As of June 2023, the introduction of the federal day care program has had little impact on the trend of employment in the childcare industry.
For example, in June 2023 there were 175,913 people employed in child care in Canada. This figure is almost exactly what the projected employment of 181,100 people would have been if the average annual growth of 5.9 percent a year from 2004 and 2020 had continued through 2023.
There is also little evidence that the federal government is achieving its goal of boosting the labour force participation of women with children.
The total labour force participation rate for women was 61.5 percent in September 2023 compared to a high of 61.7 percent in 2015.
And recent increases in the size of the female labour force were concentrated in Quebec and among women with adolescent children, both groups that are unaffected by the new federal program.

Auteur:

Senior Fellow, Fraser Institute