Cold Hard Wonk

No sentiment but politics

The Future Is Now

Posted by JJ in Federal Elections, Golden Tacks (Tuesday December 13, 2005 at 12:04 am)

And children, as we know, are the future.

At last, the NDP’s child-care proposal is unveiled. Setting aside the BQ’s position (Quebec’s program is already running), and assuming we’ve got three choices at the moment, we now have information from all three contending parties. Let’s review:

  • Roughly 2.2 million children under 6 years of age in Canada
  • Canada can’t create a daycare program (except for federal employees) — it can only fund provincially-controlled programs
  • Creating a space in childcare costs money, but so does maintaining a space — funding must constantly rise to constantly sustain and raise the number of spaces available
  • Only Quebec currently has a universal daycare programme:
    1. It costs $7/day to participate, plus additional charges for materials, food, and other “extras”
    2. There aren’t enough spaces to meet demand
    3. The program costs the government $15,000/child per annum

And what are the parties offering?

Extending the current $1 Billion/annum program for a further number of years
Creating a national daycare program
Offering $1,200/annum per child under 6 to families
Offering $250 Million per annum to businesses and community groups to create new daycare spaces
New Democrats
Spending $1.8 Billion in 2006, to increase by $250 Million each year thereafter to create roughly 1 childcare space per $10,000 spent
Offering low-income earners an additiona $1,000 child tax credit

What to think?

The Liberal proposal is already being undertaken. The same amount of money being extended won’t increase spaces beyond present levels unless additional money is spent. If the average cost of a space is $10,000/child to the government (which the figures from Quebec suggest is low), then the cost of providing a national program would reach $22 Billion dollars per annum, split between federal and provincial governments. Even assuming only a half-participation rate, the result is still a massive investment, of which there is no sign. Moreover, such a program would only reach the levels of the Quebec program, still requiring roughly $1,750/annum from parents per child, plus additional “materials” fees. In addition, there is no sign of provincial willingness to participate in a program as grandiose and costly as a national daycare program comparable to the healthcare system would be — more limited targeted creation of spaces seems possible.

Overall likelihood of increasing spaces:
virtually nil with currently proposed funding — simply continuing funding will only support spaces already created under the current program
Overall likelihood of providing universal access:
nil without massive funding and beyond federal power
Overall likelihood of funding:
high — no change in funding from present levels
Overall likelihood of achieving presented objective
low — ambitious claim which the solid proposals do nothing to advance

The Conservative plan offers significantly more money on an annual basis. The annual cost would come to $2.6 Billion (lowered somewhat by the prospect of taxation on the same amount), and the Conservatives have promised to maintain existing Liberal transfers to the provinces for daycare, so perhaps $3 Billion/annum is a fair figure. Despite this, the amount provided won’t even reach the minimum parent contribution level for the Quebec system (roughly $1,750/annum), not to mention extra fees. As a result, the $1,200 isn’t likely to create any spaces — it’s not enough money. The $250 Million per annum for new spaces, if in addition to the Liberal program, would produce additional spaces, but at a comparable cost of $10,000/space, only 25,000, and that only once — subsequent years would not add to funding levels.

Overall likelihood of increasing spaces:
high, but only once and by about 25,000
Overall likelihood of providing universal access:
nil — annual cash to families is too low to support it
Overall likelihood of funding:
high — current budget surplusses provide ample opportunity for expansion of federal spending, but may be threatened by tax cuts
Overall likelihood of achieving presented objective:
high, but not much in the way of objectives to meet — no promise beyond fixed cash and low number of daycare spaces

The NDP proposal offers a steady annual increase in funding, tied directly to the creation of new spaces, by 25,000 spaces per year at an annual additional cost of $250 Million. As long as all assumptions as to cost are correct, this proposal offers more money than the Liberal program and less than the Conservative, but is directed specifically to the creation of spaces. This can be achieved only if provinces agree to the terms. In addition, they promise a tax credit to low-income earners of $1,000 per annum. Such an amount falls well below the Conservative offering which is, itself, insufficient to cover even the cheapest program’s requirements.

Overall likelihood of increasing spaces:
high, based on annual projections and narrowly targeted spending and goals
Overall likelihood of providing universal access:
nil without massive funding and beyond federal power
Overall likelihood of funding
high in the short term, but promise of annual escalation is hard to account for — long-term viability may be low
Overall likelihood of achieving presented objective:
moderate — a modest claim which depends on both provincial participation and satisfactory future funding levels for success (former fairly likely, given limited scope, latter unlikely)

And to conclude:

No program can achieve, as proposed, universal access to child care — the comparisons to healthcare and talk of a national daycare program don’t mean that. At best, these proposals will create or maintain a very limited number of spaces designated as not-for-profit whose benefit will be almost entirely for lower-income earners. The Conservative plan is different in this respect as its funding for space creation is available to groups which might create spaces for parents in other income categories — perhaps not the most efficient allocation of limited public resources for the purpose.

On the whole, only one proposal genuinely creates additional spaces, sets specific achievable goals, and restrains the hyperbole, and that’s the NDP proposal. Reviewing it, it seems constructed in direct response to the Conservative proposal, but revises and avoids most of its flaws. Most importantly, it combines additional spaces, an appreciation of the limited options available with the money on call, good judgement as to its allocation and supplemental assistance to those in need. Basically, its parts mesh well, support one another, and seem workable.

The major obstacle to its long-term success, annual increases in funding, would not, admittedly, emerge for some time; but any proposal intending to actually increase available spaces will come up against the same obstacle. Whether it remains affordable will depend on restraint in other areas of spending.

What was a suspicion in the wonk’s earlier post has been confirmed. The best childcare proposal really is that of the NDP. It may not be surprising — the real surprises are the limitations of the other two parties’ proposals. But it just might do what it says it will, and that’s no bad thing.

If your decision is over child care, the NDP seems the way to go.

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