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October 19, 2022

Child Care Policy in Canada: Yesterday, Today, and Tomorrow

Gordon Cleveland reflects on progress in child care policy and next steps.

October 19, 2022

Gordon Cleveland, PhD­

In 2021, the Government of Canada made the expansion of affordable child care in Canada a policy priority, with a mandate letter for the Minister of Families, Children and Social Development tasking her with building “a Canada-wide Early Learning and Child Care system that reduces parent fees, creates more high-quality spaces, recruits and retains skilled educators, and ensures all kids get off to the best possible start.”1

Since then, the federal government has signed agreements with all provincial and territorial governments to build a national, community-based system of quality child care as part of its 2021 Budget commitments2 – a public service like education or health, delivered largely by not-for-profit enterprises. With $30 billion of federal funding by 2026, the goal is to make licensed child care available across the country for an average fee of $10 per day.

Our understanding of the importance and significance of these commitments, as well as the contexts in which these changes occur, is strengthened by looking back at some of the progress – and lack of progress – that has been made over the last several decades. History gives us perspective. Reviewing how child care and family benefits have changed since 1986 can help us plan policy changes for the present.

In Early Learning and Child Care in Canada: Where Have We Come From, Where Are We Going?, published today by the Institute for Research on Public Policy (IRPP), I reflect on what has happened with regard to child care services and child-related benefits since 1986 and share insights on how to move forward.

Since 1986, we have seen these changes:

  • a growth in the number of child care spaces: now seven times as many across Canada;
  • a shift in the types of child care arrangements used by employed mothers: 50% now use centre-based care;
  • increased availability and hours of kindergarten: now full days for most children aged four to five years old;
  • an increase in the proportion of mothers who are employed: there has been a substantial increase in labour force participation;
  • increased child care fees: rates are higher, even after accounting for inflation, except in Quebec and Manitoba;
  • decreased staff–child ratios: fewer staff per children in Alberta and too few staff per child in Quebec for younger children, although there has been little change elsewhere;
  • more child care subsidies: but they occupy a smaller proportion of government expenditures;
  • a shift to direct operating funding to child care: virtually 100% of funding in Quebec and an average 50% in other jurisdictions is now direct operating funding;
  • expanded child care expenses deduction: the claim limit has been raised from $2,000 to $8,000 for young children, in response to increasing child care fees;
  • expanded maternity and parental benefits: dramatically improved from 15 weeks of maternity benefit and no parental benefits to benefits that can exceed a year; some provisions to encourage gender equity, but more to do;
  • increased compensation for child care educators: wage enhancement funding from governments has somewhat increased child care staff wages from their low starting point, but the progress has been very modest compared with average hourly earnings of other workers; and
  • increased federal child benefits: federal child benefits are greater than they were in 1986; the Canada Child Benefit now provides between $5,000 and $7,000 per child (depending on age) to families with low incomes and some amount of child benefits to nearly all families – these benefits have had an impact on child poverty and have been a very significant boost to the finances of families with very low incomes.

In sum, federal child benefits and maternity and parental benefits are much improved since 1986. However, while the availability of child care spaces and kindergarten hours have greatly improved, child care fees, child care quality, and the compensation of qualified child care educators are either little improved or worse than they were, according to these indicators.

Next steps for expanding and strengthening child care

Achieving $10 per day child care across Canada needs to be undertaken in conjunction with addressing shortages in spaces and recruiting and retaining sufficient early childhood educators. It is not clear that the funding allocated will be sufficient to bring fees down to $10 per day in high-cost jurisdictions such as British Columbia, Alberta, and Ontario. Complementary changes in parental benefits could help reduce the need for infant child care.

The report provides four recommendations for governments:

  1. Expand not-for-profit and public child care facilities. Provincial and territorial governments can provide substantial capital grants or loan guarantees to not-for-profit and public operators to ensure and accelerate a planned and coordinated expansion of child care. In large jurisdictions, specialized development agencies could be established to design, plan, and build not-for-profit and public centres. Governments could also take steps to encourage the delivery of more child care services by municipalities, colleges, and school boards.
  2. Increase the wages of early childhood educators. With little improvement in pay for child care educators in more than 30 years, wages will likely need to rise substantially to recruit and retain enough qualified early childhood educators to meet demand and maintain or improve staff–child ratios.
  3. Increase funding to be able to meet stated goals. No one has yet addressed whether $9 billion per year is sufficient to provide universal child care in all jurisdictions at only $10 per day, especially those where child care fees have been particularly high for years (e.g., B.C., Alberta, and Ontario). It likely isn’t without a cost-shared federal–provincial supplementary financing program for high-fee jurisdictions. This approach would provide additional revenue to governments, which benefit from the increased labour force participation of mothers.
  4. Close gaps in maternity and parental benefits across Canada. There is a stark difference in the coverage and generosity of maternity and parental benefits between Quebec, which has the Québec Parental Insurance Program (QPIP) since 2006, and the rest of Canada, which relies on federal Employment Insurance (EI). Some of this gap could be addressed by making changes to ensure that parents outside Quebec who do not currently qualify for paid leave through EI receive income benefits during the first year of their child’s life.

To learn more, read Early Learning and Child Care in Canada: Where Have We Come From, Where Are We Going? in full at the Institute for Research on Public Policy website.

Dr. Gordon Cleveland (PhD) is an Emeritus Associate Professor of Economics at the University of Toronto Scarborough and a member of the Expert Panel on Early Learning and Child Care Data and Research. He is also president of Cleveland Consulting: Early Childhood Education and Care Inc.


  1. Government of Canada. 2021. Minister of Families, Children and Social Development Mandate Letter. https://pm.gc.ca/en/mandate-letters/2021/12/16/minister-families-children-and-social-development-mandate-letter
  2. Canada, Department of Finance. 2021. Budget 2021: Recovery Plan for Jobs, Growth, and Resilience, 101. https://www.canada.ca/en/department-finance/news/2021/04/budget-2021-a-canada-wide-early-learning-and-child-care-plan.html