Who would benefit from a universal child care program?

As announced in the April 19 federal budget the Liberals will try, once again, to implement universal child care across Canada.

image: HuffPost Canada

They have been promising it for decades but never delivered. In 2005, Prime Minister Paul Martin’s minority government pledged to start a program worth $5 billion over five years. Never happened.

This time, Ottawa is pledging $27.2-billion over five years. The catch is that the provinces, having jurisdiction over child care, must cooperate.  If they do, that would make them partners in a 50/50 sharing arrangement.

The difference between then and now is COVID-19. The Liberals, determined not to waste a pandemic, are back into big government and on a spending spree.

A strong federal government contrasts both Liberal and Conservative governments of the last three decades when balanced budgets in vogue. In his budget speech in 1995, then Finance Minister Paul Martin said:

“We are acting on a new vision of the role of government in the economy. In many cases that means smaller government. In all cases it means smarter government.”

The new Finance Minister, Chrystia Freeland, isn’t much worried about the size of government. In her budget speech, she said the COV ID-19 pandemic has “brutally exposed” something women have known for a long time: “Without child care, parents – usually mothers – can’t work.”

A universal child care program across Canada would be modeled on Quebec’s. The goal would be to bring child care down to about $10 a day.

It worked in Quebec. Before the child care program was put in place, Quebecois women’s participation in the workplace was below that of the rest of Canada. Now it’s above the rest.

So, who would benefit from a universal child care program? Not younger women aged 15 to 24. Relatively few women in that age group are mothers. Their participation in the workforce has been hit by woes of the retail sector. Child care wouldn’t be a big factor in getting them back to work.

Participation in the workforce for older women in the 25 to 54 age group wouldn’t be affected. Participation rates for them have recovered, and are even slightly higher than before the pandemic hit.

Those most affected are parents, mainly mothers, who when the pandemic hit were forced to work from home at reduced hours and to care for children not in daycare or in school.

Statistics don’t capture the stress of parents still working but juggling the care of children who are at home and learning online.

As Quebec’s experience has demonstrated, a universal child care program can pay for itself over time in two ways. It would put people to work, not only in the child care sector but by allowing previously unemployed parents to enter the workforce. Those workers will now be paying taxes that contribute to the cost.

Also, Canada can pull out of the massive debt just as we did after World War II by “growing out of debt.” As the economy grows, the debt burden relative to the GDP shrinks.

Bold government initiatives define what it means to be Canadian. When we describe the differences between ourselves and Americans, Canadians proudly point to our universal health care.

Universal child care could also be a defining feature of what it means to be Canadian –compassionate and concerned about the good of others.

Canada’s new economic reality

 

As Canada emerges from the Dark Decade, we need to get back on track with a modern economy.

The Harper government’s plan to make Canada an “energy superpower” was a disaster for a number of reasons. The plan reversed our progress as an industrial nation; it insured that Canadians would become the highest per capita emitters of CO2; it failed to anticipate the vagaries commodity markets.

lumberjack

As long as we are hewers of wood and drawers of oil, we are just a colony of economic powerhouses. Mel Watkins identified this failed strategy as the “staples trap” in 1963.

“The tendency for the country to tilt its economic resources and policies in support of one particularly in-demand staple or another that, inevitably, leaves the economy struggling when the staple falls out of favour (David Parkinson, Globe and Mail, July 2, 2016).”

Watkins, now 84, looks back on the Dark Decade: “We bet the farm on oil prices staying high and rising, but that hasn’t happened and, it would seem, is unlikely to in any near future. We need to go back to the 1970s when there was genuine debate in Canada about industrial policy transcending staples.”

Back then, after World War II, Canada had shifted its workforce from agriculture to factories. By 1999, the high-value sectors of automotive, aerospace, transportation, electronics and consumer goods employed 60 per cent of the workforce. At the same time, the resource-sectors of agriculture, energy mining and forestry together only employed one-quarter.

What seduced Canada back into the staples trap? In a word: globalization. We gleefully sent manufacturing jobs to low wage countries with low environmental standards. Exports of metal ores doubled since 2000. Energy exports increased by 55 per cent at the same time as auto exports fell by 11 per cent. Economist Jim Stanford sums it up:

“The global commodities boom shifted Capital and policy attention towards extractive industries. Canada’s economy has been moving down, rather than up, the economic value chain.”

We’ve these cycles before where expansion in one part of the world triggers a global commodities boom. This time it was the modernization of China that triggered the boom. In the past it was the reconstruction of Europe and Japan after the war, and before that it was the rise of the U.S. as an industrial power.

Parkinson looks to future: “For the oil and gas business, the long term prospects look even more grim. The growing global momentum for green energy looks poised to steadily erode demand for fossil fuels over the coming decades. We may one day look back on the oil-price collapse of 21014-15 as the beginning of the end for the industry.”

During the Dark Decade, Canada invested heavily, not only in political resolve to exploit the dirty tar sands, but in the human and financial capital needed to dig the stuff up. It will take time to shift gears but Canada must shed its colonial mentality. It’s happening. Enbridge has invested $1 billion in wind-energy. Alberta has budgeted $3.4 billion for renewable energy.

B.C.’s government still has grandiose dreams of a fossil-fuel economy with liquefied natural gas. While Premier Clark hasn’t yet admitted it, that plan is history.