Child care becoming unaffordable for many

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In the early 1970s, Manitoba broke ground with an important child-care policy innovation: a set maximum daily fee. Set fees have been a cornerstone of Manitoba’s early-childhood care and education legislation and regulations ever since. But under a proposed set of regulatory changes, this policy protection will be weakened.

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Opinion

Hey there, time traveller!
This article was published 10/08/2020 (786 days ago), so information in it may no longer be current.

In the early 1970s, Manitoba broke ground with an important child-care policy innovation: a set maximum daily fee. Set fees have been a cornerstone of Manitoba’s early-childhood care and education legislation and regulations ever since. But under a proposed set of regulatory changes, this policy protection will be weakened.

A maximum fee means predictable costs for parents and known revenues for facilities. It also makes budgeting much easier for the hundreds of citizens on the boards of directors of Manitoba’s non-profit child-care centres, as they don’t have to wrestle over charging themselves higher costs. Manitoba was decades ahead of the next province to establish a set fee — not until Quebec launched $5-per-day care in 1997 did another province follow our lead.

Flat maximum daily fees work because the province has also always provided grants to support child-care operations. Manitoba parent fees make up at least 60 per cent of the revenue in the sector, and government grants cover the remainder. Under Premier Brian Pallister, government operating grants have been frozen since 2016. Facilities are starved for funds, and the situation is worsening under COVID-19.

At a time when the chronically under-funded child-care sector is struggling to keep afloat, the austerity-focused provincial government is not increasing public dollars. Instead, under suggested changes, Minister of Families Heather Stefanson would allow child-care fees to be completely unregulated in the growing share of child-care programs that receive neither full nor partial provincial operating grants.

For 18 months, the province has quietly and informally permitted something similar.

In a December 2018 letter, the province suggested that any child-care facility that did not receive an operating grant for all of its spaces could charge more than the maximum fee “in order to increase revenue and ensure financial viability and sustainability.” This is the government’s way of defining the lack of adequate operating revenue as a problem to be solved by raising parent fees, rather than by increasing public funding.

While Manitoba’s fees are the second-lowest in the country (only Quebec is more affordable, at less than $9 per day), fees nevertheless take a big chunk out family budgets. Parents of preschoolers pay $20.80 per day and parents of infants pay $30 per day to attend nearly all child-care centres — for annual costs of $5,408 to $7,800 respectively.

The 2016 Manitoba Commission on Early Learning and Child Care raised concerns about parent affordability. It reported that a middle-income family with two children attending a licensed child-care centre would pay 22 per cent of its net family income in fees — an alarmingly high cost.

Many economists have argued that child care is unaffordable if it consumes 10 per cent or more of a family’s income. This is sadly the case for many Manitoba parents. In our research, we estimate that 40 per cent of low-income families using licensed care in Manitoba are paying more than 10 per cent of their income.

Some critics have dismissed concerns about affordability of child care by pointing out that very low-income parents can receive a fee subsidy. Today, fewer than 18 per cent of Manitoba parents using child care qualify for any fee help. A single-parent family has to be about $10,000 below the poverty line to receive a maximum subsidy. Even then, they are charged more than $500 per year per child to attend child care.

Moreover, parents who receive fee help can only use programs that charge the regular daily maximum fee. If more facilities exceed the normal fee, subsidized families will have fewer options.

COVID-19 has upended the economy, provoking what many are calling a “she-cession.” Nationally, the pandemic has pushed women’s labour force participation down to its lowest level in three decades; in Manitoba, 11,000 fewer women were employed full-time in June 2020 than in June 2019.

Policies to ensure affordable and accessible child care are crucial to enabling women’s employment: as the Royal Bank of Canada has warned, without child care, women are more likely to “fall out” of the labour force.

Ottawa is stepping up to help provinces with child-care costs under a 10-year multilateral agreement. The federal government transfers more than $15 million per year to Manitoba to help promote affordable quality child care. The funds are slated to dramatically rise over the next few years. In mid-July, the federal minister of families, children and social development announced even more dollars for child care would be forthcoming.

Nationally, experts agree that we need to act quickly to help restore the economy — and this means ensuring parents can afford child care. An economic recession is no time to deregulate some child-care fees; instead, this crisis calls for provincial leaders to adequately fund the infrastructure that supports parents.

Interested citizens can review the proposed child-care regulations and provide online feedback until Aug. 12 at https://reg.gov.mb.ca/detail/2937833.

Susan Prentice is professor in the department of sociology and criminology and Harvey Stevens is a professional affiliate in the department of economics at the University of Manitoba.

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