During last year’s provincial election, the NDP promised to introduce $10-a-day daycare. Now Premier John Horgan has announced a pilot project to examine the feasibility of keeping that promise.
The government has chosen 53 daycare sites for a test run, which include a mix of for-profit, not-for-profit and home-based sites. Eight are on Vancouver Island. About 2,500 kids will receive this subsidized care, at an estimated cost of $60 million over the next 18 months.
This is a huge benefit to low-income families, yet it has the potential to be enormously expensive — perhaps prohibitively so.
The benefits are obvious. Some working parents pay as much as $1,500 or more per month to have their children cared for. Now this will drop to around $200 for those families whose care is being subsidized.
If the program is made universal, and that’s what was promised, it will be a major step toward reducing child poverty. Unfortunately, it’s difficult to see how this can be done.
According to B.C. Stats, there are about 230,000 pre-school kids in our province. We don’t know exactly how many of these are in daycare, but nationwide, about 50 per cent of families use daycare. That would translate into 115,000 children in B.C.
These are rough estimates. But using the government’s own figures for the pilot project, it might cost in the region of $1.5 billion to offer a universal program. This coincides with an estimate provided by private consultants.
There are numerous uncertainties here. The federal government has agreed to fund the experimental project for two years. But will it pay the much larger sum associated with a universal program? And will it do so indefinitely?
Who can say? But Ottawa has a track record of funding start-up programs, and then off-loading the cost to the provinces.
Again, if a universal program is created, we can be sure the number of families using daycare will expand significantly. That can only push the price higher.
The financial implications don’t stop there. Currently, some employers offer free or subsidized daycare to their workers.
Yet, when the new program is introduced, it seems likely they will step aside and let the province pick up the tab. This is one of those unintended consequences that tend to dog government policies.
And what about grandparents who mind their grandchildren while the parents are at work? Will they be granted a subsidy? It would seem only fair, but again, at what price?
There are some offsetting factors. Advocates point out that single mothers with young kids who currently cannot take a job will be free to do so if daycare becomes affordable.
That will reduce the income-assistance budget and give the economy a boost.
Likewise, they cite studies showing that creating more employment opportunities for daycare workers will also generate growth. That’s true.
The problem is, taking $2 billion out of the economy to create these jobs will force taxpayers and companies to tighten their belts. And that could kill at least as many jobs as the new program creates.
We can all agree this project is well-intentioned. But rolling out the pilot before you’ve done your homework is not just unwise, it has the potential to be cruel.
What happens if, as seems likely, a full-scale program turns out to be hopelessly expensive? Will the government abandon the promise of a universal system, but keep the existing 53 sites in operation? Or will it close those as well?
Either way, hopes that have been raised will be dashed.
Horgan might say he is keeping his word. And so far, he has made a start.
However, it was unwise, bordering on reckless, to launch a program that has not been costed, and that might lead to an embarrassing demise.
