A University of Manitoba sociology professor’s new report that recommends "progressive pricing" for licensed child care is one of the smartest proposals presented in a long time to revamp early childhood learning in Manitoba.
As the Pallister government rethinks how to deliver child care, it should take a long, hard look at this report.
The most attractive part of Susan Prentice’s proposal is that it realigns child-care fees to better reflect Manitobans’ ability to pay, including raising them for those who can pay more. Right now, the province mandates a flat, maximum fee that, for the most part, charges families the same regardless of income. Only very low-income parents are eligible for a direct government subsidy. Those subsidies have been eroded over time.
"Parents have to be heartbreakingly poor to qualify for a maximum subsidy in Manitoba," Prentice writes in her 35-page report "Progressive Pricing: Making Childcare More Affordable in Manitoba," released this week by the Canadian Centre for Policy Alternatives.
Manitoba still has among the lowest child-care fees in the country, which have increased only three times since 1991. But 58 per cent of families with kids in child care still shell out 10 per cent or more of their income on fees, the report found. Higher-income families have benefited the most from the flat-fee scheme.
A family with an income of $150,000, for example, pays the same daily rate of $20.80 for pre-school children as a family that earns half that or less. Meanwhile, low-income parents who live well below the poverty line are forced to pay a $2-a-day fee, which can add up to more than $1,000 a year for a single mother with two kids. Unaffordable fees discourage low-income parents from entering the workforce. They also add to social assistance costs and reduce taxation revenue.
The result of this outdated system is that it’s not only unaffordable for many families, it’s priced well below what higher-income families can and should pay. Years of frozen fees (they haven’t gone up since 2013) have robbed daycare centres of much-needed revenue; so have operating grants that haven’t increased since 2016. The result is grossly underpaid staff (who earned an average of $17 an hour in 2018-19), deteriorating quality of care and few resources to create new child-care spots.
By trying to make child care affordable for everyone, governments have made it universally worse. It’s a flawed system. Prentice’s solution goes a long way toward addressing that deficiency.
"Under progressive pricing, there would no longer be a blanket dichotomy of either full fees or subsidy," writes Prentice. "Instead, there would be a spectrum of parent fees ranging from free… up to a new and higher maximum daily fee."
Naturally, the devil is in the details. Prentice offers three scenarios that include charging fees based on a range of five to 10 per cent of a family’s income, including raising the maximum fee to $27.20. Whether that’s the appropriate range is open to debate (as are Prentice’s recommendations to regulate pricing in private centres that don’t receive government grants). But the principle of basing fees on ability to pay is a sound one.
Progressive pricing is not Prentice’s preferred option. The longtime child-care activist makes no bones about the fact she believes child care should be a fully funded, universal program — like public education — where parents pay no fees at all, regardless of income.
But she’s also politically savvy enough to recognize that in practical terms, that’s not going to happen — at least not in the short to medium term. Instead of proposing something she knows no government — regardless of political stripe — will implement, she’s advancing a very doable and politically palatable plan that could address affordability and quality of care.
It’s a reasonable compromise that may not make everyone happy, especially those who insist on an immediate move to a fully universal system. Higher-income parents forced to pay more may not like it (even though higher fees would be partially offset by generous tax write-offs), and the government would have to increase operating grants to centres. But properly implemented, it could result in a vastly improved, more accessible child-care system.
This is good public policy. It should be the starting point for a new discussion on how to revamp early childhood learning in Manitoba.
Tom has been covering Manitoba politics since the early 1990s and joined the Winnipeg Free Press news team in 2019.