Options for the Creation of an Affordable Licensed Child Care Program in Manitoba provides important data and analysis to create equity in child care fees, which is one pragmatic first step towards the creation of a quality, universal, public child care program in Manitoba and Canada.
In spite of the Manitoba child care program having maximum per diem rates for licensed care that are among the lowest in the country, 24 per cent of families using child care in Manitoba are paying more than 10 per cent of their after-tax/disposable family income on licensed care.
The reasons for one quarter of families facing unaffordable licensed care are several. First, the current formula used by the program to calculate parent fees does not cap parent fees at a maximum fixed per cent of their family income. Thus, lower income families can and do pay more than an affordable per cent of their disposable income on licensed care. Second, the family income thresholds used in the current formula for determining eligibility for full and partial subsidy have been increased only twice since 1999 and have fallen in real terms leaving more lower income families out of reach of subsidies. In 2007/08, 35 per cent of children in licensed care were receiving subsidized care. By 2019/20, that had fallen to 17 per cent.
By contrast, higher income families have enjoyed increasingly less expensive licensed care because the maximum daily fees have been increased only three times since 1991 by much less than the cost of living. Expressed in 2020 dollars, the maximum daily fee has fallen from $31.56 to $20.80 for full day preschool care. As a result, the licensed child care system in Manitoba has become more expensive for lower income families and less expensive for higher income families — the exact opposite of what good public policy would dictate.
This report proposes changes to the current licensed care fee structure would result in, lower fees for lower income families and expand the labour force to the extent that the additional provincial tax revenues and parent fees would pay for the higher operating grants required by the new affordable fee structure.