BC can afford $10 a day child care: study shows more mothers in workforce would grow economy, cover large part of program costs

July 9, 2015

(Vancouver) A $10 a day child care program in BC would largely pay for itself through the considerable boost to provincial and federal government revenues from more women participating in the workforce.

“Universal child care is entirely affordable for BC, either as a federal-provincial partnership or a BC-only program like the one in Quebec,” says Iglika Ivanova, a senior economist at the Canadian Centre for Policy Alternatives and author of Solving BC’s Child Care Affordability Crisis: Financing the $10 A Day Plan.

The CCPA study builds on research by economist Pierre Fortin, which found large and almost immediate economic and fiscal benefits from the provincial child care plan launched in Quebec in the late 1990s. It enabled more women with young children to return to work, which boosted Quebec’s economy and generated significant returns from higher tax revenues, reduced social assistance for families with children, and lowered reliance on other income-tested benefits.

“It’s not unreasonable to expect the $10 a day child care plan in BC to produce similarly large economic benefits,” says Ivanova. Her research finds that if BC’s experience were similar to Quebec’s, a $10 a day child care program in BC would significantly increase the workforce participation of mothers of young children, grow BC’s economy by $3.9 billion per year, and generate about $1.3 billion in revenues for the provincial and federal governments.

The study models implementation of the $10 A Day Child Care Plan, an integrated early education and child care system proposed by BC child care experts. Over a 10-year period, the plan would reduce fees to $10 a day (waived for families with incomes under $40,000 a year), create enough spaces for all families who want them, and increase the quality of care.

The cost of the $10 A Day Plan has been pegged at $1.5 billion – only $200 million more than the increase in provincial and federal tax revenues it would generate.

Without federal participation, BC would need to raise a larger amount – approximately $870 million per year – because the boost in federal tax revenues could not be counted in the provincial financing plan. The study shows how these remaining funds could be raised using a series of modest tax reforms, staged in gradually over a 10-year period, with the costs shared fairly among all British Columbians:

  • Making the temporary top income tax bracket permanent and adding a new one for the richest British Columbians raises $475 million and makes the income tax system more fair;
  • Modest corporate income tax increases raise $270 million, and reflect the benefits of child care for businesses;
  • Small personal income tax increases raise $140 million, amounting to only $20-$80 per year for the vast majority of British Columbians.

“Canada invests very little in early childhood education and care, and so does BC,” says Ivanova. “The federal and provincial governments provide child care tax credits, but these only make a dent in the costs, and do nothing to create new child care spaces.”

“Under the proposed financing plan, families with young children would save thousands of dollars, and mothers who want to work would be able to,” says Ivanova. “For the rest of us, pitching in a little is a bargain for what we’d get with quality affordable child care: healthy child development, improved social inclusion, more gender and income equality and economic prosperity.”

Lynell Anderson, with the Coalition of Child Care Advocates of BC, one of the groups that developed the $10 A Day Plan, welcomes the release of the study. “Our choices are clear,” says Anderson. “We can continue to watch families struggle with high parent fees and long wait lists, settling for unregulated child care with no monitoring or oversight, not to mention women having to give up their paid work and career goals. Or, this study shows that we can choose from a range of equitable and affordable financing options to implement the $10 A Day Child Care Plan. Given the substantial and widespread benefits at stake, even in the short term, we can’t afford not to make this investment.”


For interviews with Iglika Ivanova, contact Sarah Leavitt at sarah at policyalternatives.ca or 604-801-5121 ext 233. Sarah can also arrange interviews with Lynell Anderson, CPA, CGA, at the Coalition of Child Care Advocates of BC.

For interviews with early childhood educators in communities outside of the Lower Mainland, contact Emily Mliekso, Executive Director, Early Childhood Educators of BC, at 778-994-8001 or executive.director at ecebc.ca.