Full-time licensed child care in most Canadian cities is struggling under the financial burden of COVID-19—registering a dramatic drop in enrolment while for profit centre parent fees remain unaffordably high, according to a new study by the Canadian Centre for Policy Alternatives (CCPA).
Sounding the Alarm: COVID-19’s impact on Canada’s precarious child care sector finds high fees in for-profit centres in Winnipeg. Across Canada there is a strong correlation between declining enrollment due to COVID-19 and cities with high parent fees as well as those with high unemployment, further reinforcing the importance of public funding in child care.
“Child care centres offering lower fees because provincial governments fund them are holding their own during the pandemic, as we see in the set fee system in Quebec,” says senior economist and report co-author David Macdonald. “Our survey shows that cities with higher fees saw bigger drops in enrolment. It’s clear that relying on exorbitant parent fees to fund services that should be part of the social infrastructure is what got us into this mess in the first place. Canada’s economic recovery is at risk without more, and different, support.”
The most important shift uncovered by this survey was the dramatic drop in enrollment in full time licensed child care in most cities. In Winnipeg there was a 27% enrollment drop due to COVID in for-profit centres and 20% in non-profit centres.
“The only way to stabilize this situation and prevent loss of child care spaces in the future—which women will need to re-enter the post-pandemic workforce—is through sustained, substantial public operational funding,” says report co-author Martha Friendly. “We’re sounding the alarm: the federal government must prioritize funding and full transformation of child care now, before it’s too late.”
Among the report’s findings:
Operational provincial funding enables lower set fees for parents. Set fees are lowest in Quebec (at $181 a month), which provides the most substantial operational funding. Set fees in Manitoba are the second lowest in the country.
Manitoba’s relatively lower fees are due to the current funding model for child care, with licensed non-profit centres funded by provincial operating grants and parent fees.
In every city but one, parent fees are higher in the for-profit sector than in the not-for-profit sector. In nine of 25 cities for which data were available, for-profit fees were at least 25% higher.
The study finds that market infant fees in Winnipeg are $1,700/ month—almost as high as infant fees in Toronto and 2.6 times higher than non-profit infant fees. For-profit centre fees in preschool centres in Winnipeg are $933/ month. In contrast, non-profit infant fees in Winnipeg are $651/ month and $451/ month for preschool-age children.
The recently tabled Manitoba Bill 47 “The Early Learning and Child Care Act” opens up the door to public funding for private, for-profit child care centres in Manitoba. The current legislation stipulates that provincial funding goes only to non-profit centres. If this legislative change is passed, then public funding would go to private child care centres charging extremely high fees.
Evidence shows that in the child care sector, competition between market actors will not drive down prices. For profit centres are generally shown to pay poorer wages to staff, who are predominantly female.
Manitoba’s parent fees are currently frozen, as are operating fees for child care, which has severely constrained revenue for non-profit centres. A report published by CCPA Manitoba, Progressive Pricing: Making Childcare More Affordable in Manitoba by Susan Prentice outlines a model whereby low income parents would receive free child care and parents living above the poverty line would pay a set proportion of their net income on childcare.
Sounding the Alarm: COVID-19’s impact on Canada’s precarious child care sector will be available for download on the CCPA website. The full report is based on data from a survey involving 11,000 phone calls, representing a sample of 53% of regulated full-time centre-based and regulated family child care in Canada.
For interviews contact: Alyssa O’Dell, CCPA media and public relations officer, at 343-998-7575 or [email protected].
The CCPA is an independent, non-profit charitable research institute founded in 1980.