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A new report shows childcare costs are rising faster than inflation, straining pocketbooks and raising questions about whether billions in new federal spending will make daycare more affordable for those who want it.

Toronto remains the most expensive city for childcare, where median daycare costs families about $21,096 a year.

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The cheapest spaces are in Quebec, where provincially regulated and subsidized daycare has a median cost of $183 a month, or $2,196 a year.

The annual report on childcare fees, released today from the Canadian Centre for Policy Alternatives, also finds for the first time that childcare costs in some rural parts of the country are not all that different from the high prices facing parents in many large cities.

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“You can categorize your issues in childcare—there are not enough spaces, the quality is very variable—but affordability is a pervasive issue across the country,” says Martha Friendly, co-author of the study and executive director of the Toronto-based Childcare Resource and Research Unit. “It’s not getting better and we still have yet to see if any of the [federal] interventions are going to be enough to really address the issue.”

Feds promise help

The Liberals have vowed to make childcare affordable for those who need it and can’t afford it.

Federal coffers will dole out $7.5 billion over 11 years, beginning with $500 million this year and increasing to $870 million annually by 2026 in order to fund services in provinces and territories.

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The money could potentially create 40,000 subsidized spaces by early 2020 at a cost of $1.3 billion. The government knows not all the money will be spent on subsidizing spaces, but could be used for professional development for childcare workers.

The government is also working on a separate childcare plan with Indigenous groups that would reflect the needs of First Nations, Inuit and Metis.

In some First Nations reserves in Ontario, the report found, parents didn’t pay anything for childcare, suggesting that direct operational funding from the government makes fees much more affordable.

David Macdonald, a senior economist at the policy centre who co-authored the study with Friendly, says it isn’t clear to him that the new federal spending will make a big dent in daycare costs. Making childcare more affordable requires governments to set fees and provide operating grants to defray costs, he says.

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“That may not be what governments think is the case, but the data clearly shows a direct path between setting fees and affordability,” Macdonald says.

The House of Commons finance committee hints at the same issue in its budget wish list released last week. Among the recommendations for spending items in the 2018 budget was a request to provide the money needed to create an early learning and childcare system.

None of the money can flow without funding agreements with provinces. So far, three provinces and one territory have three-year spending deals in place.

A spokesman for Social Development Minister Jean-Yves Duclos says the Liberals may allow some provinces to carry over spending beyond 2020, but restrictions are tight to prod provinces into delivering services as soon as possible.

“We have an expectation that provinces and territories will deliver on the commitments they made,” says spokesman Mathieu Filion. “Delivering on the plans is how we’ll make child care better in Canada.”

Originally published on Advisor.ca
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