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Lindsay McGinn’s child care costs were reasonable. She paid $23 a day for her daughter Amina to be in a subsidized day care space in Ottawa.
Amina turned two in January, around the same time McGinn gave birth to the family’s second child, Isaac. Three weeks after Isaac arrived on Jan. 4, the family lost Amina’s subsidized care under municipal rules that say a family with one parent at home on parental leave can’t have a second child in a subsidized day care space.
McGinn is doing a master’s degree at the University of Ottawa. Her husband works full-time. They can’t afford $75 a day for a full-cost spot at Amina’s day care, which is the average rate for a day care spot in Ottawa. Instead, Amina goes to a home day care two days a week and her grandparents take her an extra day or two a week to a playgroup.
“I’m not even getting any EI for this pregnancy so we’re really down to bare bones. I understand the rationale: I’m going to be at home. There are other people waiting for a subsidy,” McGinn says. “My friends with jobs can afford to keep their older kids in day care part-time. I’m happy to have (Amina) at home, but for her, she loves day care.”
If the price were right — maybe even lower than $23 a day — Amina could stay with her friends at her day care centre.
Keeping the daily cost of child care as low as possible is a centrepiece of the NDP’s campaign platform heading into the 2015 vote. NDP Leader Tom Mulcair has tied his party’s hopes to the campaign pledge of a federally funded child care program. It’s a costly promise in more ways than one.
What parents pay now
The average cost of a child care space in Canada is about $11,000 a year. The numbers, however, vary by province and by age group: Spaces for children up to 18 months of age cost as much as $20,000 a year and pre-schoolers aged three to five run an average of $8,000 annually.
Click on graphic to enlarge:
Quebec has the lowest fees in the country, thanks to its popular $7-a-day taxpayer-subsidized system. Even when rates rise next year to a maximum of $20 a day, Quebec will have the cheapest infant rates and will be second to Manitoba for the cheapest rates for toddlers (between 18 months and three years) and pre-schoolers.
Just as costs vary by province, so does affordability, which is most stark in the National Capital Region.
A study from the Canadian Centre for Policy Alternatives compared a woman’s income and the amount parents pay for child care, on average, in each city. (The study looked at pre-tax income from women age 25 to 34, which roughly represents child bearing years.) In the National Capital Region, the study found that about 26 per cent of a working woman’s income in Ottawa goes towards child care versus 3.7 per cent for a woman in Gatineau. In other words, an Ottawa woman needs to work about three months to cover one year of child care, while in Gatineau it takes about two weeks to do the same.
Child care in Ottawa accounts, on average, for about 20 per cent of an overall household’s after-tax spending, compared to 3.7 per cent for families in Gatineau, according to a Citizen analysis using data from the Canadian Centre for Policy Alternatives study and data from Statistics Canada about household consumption.
“My wife has a good job, I have a good job, we have resources, but what we were paying at the start, our day care payment was more than our mortgage payment,” says Chris Pulfur of sending his daughter, Maya, to day care. “We knew it would be expensive, but that was a bit of a shock.”
Generally, most of the child care bill covers wages for employees. In non-profit centres, where data is more easily available, between 80 and 85 per cent of expenses are for staff salaries. The costs are generally higher in non-profit centres, where staff are usually unionized and have early childhood education degrees or designations.
(Those wages have, on average, stayed flat for over a decade, after inflation is worked in, according to the Childcare Resource and Research Unit in Toronto.)
“They do incredibly important and exhausting work,” said Rebecca Hall of the day care workers who watch over her 22-month-old daughter, Eliza. “Why are we not recognizing them as being important contributors to our society?”
“They need better people working in better day cares and that’s where the government can make a difference,” Hall said.
Related
Of the remaining 15 to 20 per cent of a day care budget, the top two spending items are for food and occupancy costs, each at about four per cent of total expenses.
Parent fees also help non-profit and for-profit centres run a budgetary surplus. Non-profits generally bank for a surplus of up to about five per cent. For-profit centres generally have a 15-per-cent profit margin. The prices parents pay in either profit or non-profit are generally the same, which in Ontario means the median cost for a full-time space for a child four and under is about $8,124, according to a Statistics Canada’s October 2014 report on child care in Canada.
If the NDP gets its way, the party would decide how much of a surplus (or profit) taxpayers would fund. Many party supporters would rather a federal program not fund for-profit centres at all. Those who have been consulted on the the NDP plan say the party plans to allow existing for-profit centres access to federal grants, but cut off funding to any for-profit centres that spring up once the program is in place.
What parents could pay
The NDP wants to charge parents up to $15 a day for child care. The wording of the pledge leaves the NDP with the option of using a means-tested scale to determine how much parents should pay.
If a parent paid the maximum, they would dole out about $3,900 per child a year, or about one-third of the $12,200 annual average cost of a space calculated under the NDP plan. (Experts suggest that under a universal day care program, parental fees should cover between 20 to 25 per cent of the cost of a child care space, lower still if the child comes from a low-income family.)
At $3,900 a year, a family with a toddler in child care would save almost $8,000 a year. Two-income households wouldn’t benefit as much as single-income households under the NDP plan. The savings for a two-income home with a toddler in care would free up about 17 per cent of the family’s after-tax income, compared to freeing up about 22 per cent of the after-tax income in an single-income family.
Rebecca Hall reads to her daughter Eliza, in their Ottawa home.
How parents – or some others – will pay for it
Early last fall, there was space in the federal government’s fiscal framework to handle potentially billions more in spending, given expected increases in tax revenues, and a balanced budget from years of spending cuts.
That space shrank when the Conservatives increased universal child care benefit monthly payments to $160 per child under six, and promised income-splitting for qualifying families, at a cost of about $2 billion annually. Then the price of oil slid, and the fiscal cupboard suddenly looked rather empty.
Now, “is there fiscal room to do (a child care system) without raising taxes more? It depends on how much you want to undo,” said Kevin Milligan, an economist at the University of British Columbia who has been an adviser to the federal Liberals.
Getting rid of one or both promises would free up approximately $5 billion, but neither opposition party is ready to do away with the child care benefit. Income-splitting is more likely to go.
That still leaves a $3-billion gap.
The NDP has said this won’t come from families, however; instead, it would target corporate tax rates, shifting them from the current 15 per cent to closer to the 22 per cent they were when the Conservatives took office.
There are other options, such as raising consumption taxes, but this would hit families as well as businesses. For instance, a one-per-cent increase in the GST would raise about $7 billion in additional federal revenues annually, which would more than cover the $5-billion federal bill — assuming there were no change in consumption habits.
The NDP could focus on corporate taxes, but economists disagree about whether raising corporate income tax rates generates more revenue.
Those who advocate for lower corporate taxes argue that there isn’t a direct correlation between corporate tax rates and revenues. Corporate tax revenues are instead tied to the amount of profits that corporations generate: “When governments lower or increase corporate tax rates, there isn’t this one-for-one impact on revenues,” said Charles Lammam, an expert on tax policy from the Fraser Institute.
Those who argue for higher tax rates say that the amount corporations pay now is a smaller portion of profits than they were prior to 2009 when the corporate tax rate was higher, despite a larger economy and greater corporate profits. Toby Sanger, an economist with the Canadian Union of Public Employees, wrote in an online post in November that it was “pure fiction” that corporate tax cuts pay for themselves by increasing government revenues.
Finding the money to pay for the NDP plan is critical because creating a system that costs families less doesn’t mean that overall day care costs will remain steady. In fact, they could go up.
“When you start pouring tons and tons of money into the system … there’s going to be strong pressure upwards” on costs, said Gordon Cleveland, an economist at the University of Toronto. “The issue of rising costs is an important one and no one is addressing it yet.”
Hall said she hopes child care becomes a key issue in the 2015 federal election.
“There needs to be far more attention paid to the burden on young parents,” Hall said. “It’s such an important issue and I don’t think you realize that until you become a parent.”
jpress@ottawacitizen.com
Twitter.com/jpress
Defining quality
As much as funding is important, quality is a central issue in a child care program. There are a few benchmarks researchers use to measure quality.
查看原文...
Amina turned two in January, around the same time McGinn gave birth to the family’s second child, Isaac. Three weeks after Isaac arrived on Jan. 4, the family lost Amina’s subsidized care under municipal rules that say a family with one parent at home on parental leave can’t have a second child in a subsidized day care space.
McGinn is doing a master’s degree at the University of Ottawa. Her husband works full-time. They can’t afford $75 a day for a full-cost spot at Amina’s day care, which is the average rate for a day care spot in Ottawa. Instead, Amina goes to a home day care two days a week and her grandparents take her an extra day or two a week to a playgroup.
“I’m not even getting any EI for this pregnancy so we’re really down to bare bones. I understand the rationale: I’m going to be at home. There are other people waiting for a subsidy,” McGinn says. “My friends with jobs can afford to keep their older kids in day care part-time. I’m happy to have (Amina) at home, but for her, she loves day care.”
If the price were right — maybe even lower than $23 a day — Amina could stay with her friends at her day care centre.
Keeping the daily cost of child care as low as possible is a centrepiece of the NDP’s campaign platform heading into the 2015 vote. NDP Leader Tom Mulcair has tied his party’s hopes to the campaign pledge of a federally funded child care program. It’s a costly promise in more ways than one.
What parents pay now
The average cost of a child care space in Canada is about $11,000 a year. The numbers, however, vary by province and by age group: Spaces for children up to 18 months of age cost as much as $20,000 a year and pre-schoolers aged three to five run an average of $8,000 annually.
Click on graphic to enlarge:
Quebec has the lowest fees in the country, thanks to its popular $7-a-day taxpayer-subsidized system. Even when rates rise next year to a maximum of $20 a day, Quebec will have the cheapest infant rates and will be second to Manitoba for the cheapest rates for toddlers (between 18 months and three years) and pre-schoolers.
Just as costs vary by province, so does affordability, which is most stark in the National Capital Region.
A study from the Canadian Centre for Policy Alternatives compared a woman’s income and the amount parents pay for child care, on average, in each city. (The study looked at pre-tax income from women age 25 to 34, which roughly represents child bearing years.) In the National Capital Region, the study found that about 26 per cent of a working woman’s income in Ottawa goes towards child care versus 3.7 per cent for a woman in Gatineau. In other words, an Ottawa woman needs to work about three months to cover one year of child care, while in Gatineau it takes about two weeks to do the same.
Child care in Ottawa accounts, on average, for about 20 per cent of an overall household’s after-tax spending, compared to 3.7 per cent for families in Gatineau, according to a Citizen analysis using data from the Canadian Centre for Policy Alternatives study and data from Statistics Canada about household consumption.
“My wife has a good job, I have a good job, we have resources, but what we were paying at the start, our day care payment was more than our mortgage payment,” says Chris Pulfur of sending his daughter, Maya, to day care. “We knew it would be expensive, but that was a bit of a shock.”
Generally, most of the child care bill covers wages for employees. In non-profit centres, where data is more easily available, between 80 and 85 per cent of expenses are for staff salaries. The costs are generally higher in non-profit centres, where staff are usually unionized and have early childhood education degrees or designations.
(Those wages have, on average, stayed flat for over a decade, after inflation is worked in, according to the Childcare Resource and Research Unit in Toronto.)
“They do incredibly important and exhausting work,” said Rebecca Hall of the day care workers who watch over her 22-month-old daughter, Eliza. “Why are we not recognizing them as being important contributors to our society?”
“They need better people working in better day cares and that’s where the government can make a difference,” Hall said.
Related
- The child care conundrum Part 1: Will a universal system pay off?
- The child care conundrum Part 2: What's government really spending?
Of the remaining 15 to 20 per cent of a day care budget, the top two spending items are for food and occupancy costs, each at about four per cent of total expenses.
Parent fees also help non-profit and for-profit centres run a budgetary surplus. Non-profits generally bank for a surplus of up to about five per cent. For-profit centres generally have a 15-per-cent profit margin. The prices parents pay in either profit or non-profit are generally the same, which in Ontario means the median cost for a full-time space for a child four and under is about $8,124, according to a Statistics Canada’s October 2014 report on child care in Canada.
If the NDP gets its way, the party would decide how much of a surplus (or profit) taxpayers would fund. Many party supporters would rather a federal program not fund for-profit centres at all. Those who have been consulted on the the NDP plan say the party plans to allow existing for-profit centres access to federal grants, but cut off funding to any for-profit centres that spring up once the program is in place.
What parents could pay
The NDP wants to charge parents up to $15 a day for child care. The wording of the pledge leaves the NDP with the option of using a means-tested scale to determine how much parents should pay.
If a parent paid the maximum, they would dole out about $3,900 per child a year, or about one-third of the $12,200 annual average cost of a space calculated under the NDP plan. (Experts suggest that under a universal day care program, parental fees should cover between 20 to 25 per cent of the cost of a child care space, lower still if the child comes from a low-income family.)
At $3,900 a year, a family with a toddler in child care would save almost $8,000 a year. Two-income households wouldn’t benefit as much as single-income households under the NDP plan. The savings for a two-income home with a toddler in care would free up about 17 per cent of the family’s after-tax income, compared to freeing up about 22 per cent of the after-tax income in an single-income family.
Rebecca Hall reads to her daughter Eliza, in their Ottawa home.
How parents – or some others – will pay for it
Early last fall, there was space in the federal government’s fiscal framework to handle potentially billions more in spending, given expected increases in tax revenues, and a balanced budget from years of spending cuts.
That space shrank when the Conservatives increased universal child care benefit monthly payments to $160 per child under six, and promised income-splitting for qualifying families, at a cost of about $2 billion annually. Then the price of oil slid, and the fiscal cupboard suddenly looked rather empty.
Now, “is there fiscal room to do (a child care system) without raising taxes more? It depends on how much you want to undo,” said Kevin Milligan, an economist at the University of British Columbia who has been an adviser to the federal Liberals.
Getting rid of one or both promises would free up approximately $5 billion, but neither opposition party is ready to do away with the child care benefit. Income-splitting is more likely to go.
That still leaves a $3-billion gap.
The NDP has said this won’t come from families, however; instead, it would target corporate tax rates, shifting them from the current 15 per cent to closer to the 22 per cent they were when the Conservatives took office.
There are other options, such as raising consumption taxes, but this would hit families as well as businesses. For instance, a one-per-cent increase in the GST would raise about $7 billion in additional federal revenues annually, which would more than cover the $5-billion federal bill — assuming there were no change in consumption habits.
The NDP could focus on corporate taxes, but economists disagree about whether raising corporate income tax rates generates more revenue.
Those who advocate for lower corporate taxes argue that there isn’t a direct correlation between corporate tax rates and revenues. Corporate tax revenues are instead tied to the amount of profits that corporations generate: “When governments lower or increase corporate tax rates, there isn’t this one-for-one impact on revenues,” said Charles Lammam, an expert on tax policy from the Fraser Institute.
Those who argue for higher tax rates say that the amount corporations pay now is a smaller portion of profits than they were prior to 2009 when the corporate tax rate was higher, despite a larger economy and greater corporate profits. Toby Sanger, an economist with the Canadian Union of Public Employees, wrote in an online post in November that it was “pure fiction” that corporate tax cuts pay for themselves by increasing government revenues.
Finding the money to pay for the NDP plan is critical because creating a system that costs families less doesn’t mean that overall day care costs will remain steady. In fact, they could go up.
“When you start pouring tons and tons of money into the system … there’s going to be strong pressure upwards” on costs, said Gordon Cleveland, an economist at the University of Toronto. “The issue of rising costs is an important one and no one is addressing it yet.”
Hall said she hopes child care becomes a key issue in the 2015 federal election.
“There needs to be far more attention paid to the burden on young parents,” Hall said. “It’s such an important issue and I don’t think you realize that until you become a parent.”
jpress@ottawacitizen.com
Twitter.com/jpress
Defining quality
As much as funding is important, quality is a central issue in a child care program. There are a few benchmarks researchers use to measure quality.
- The ratio between children and staff: The lower the ratio, the better the opportunities for children in a child care setting. For example, in most provinces, infants — those under age two — have a ratio of approximately one staff for every three infants. The ratios grow as children age.
- Qualifications: The higher the level of training for the worker, the higher the educational outcomes for those in child care. There is an under-supply of early childhood educators in Canada, says Toby Sanger, an economist with the Canadian Union of Public Employees
- Wages: As a guideline, quality early childhood educators earn about $21.50 per hour, with a benefits package of about 20 per cent of wages. The average wage in Canada, however, is about three-quarters of the quality benchmark: According to the Childcare Resource and Research Unit, the average salary in Canada for daycare staff reached about $16.50 an hour in 2012 — the most recent numbers available — up from an inflation-adjusted $15.36 an hour in 1998. In Quebec, the average salary increase ranged between 37 per cent and 40 per cent over the past 15 years.
- Ownership structure: Some research has suggested non-profit child care centres have better learning and development outcomes than for-profit centres.
查看原文...
