The new day care policy

MARC CLARK December 14 1987

The new day care policy

MARC CLARK December 14 1987

The new day care policy


It has grown slowly, but insistently, into a major political issue. While the number of women in the workforce continues to grow, the number of good, affordable day care spaces has failed to keep pace. Of the 1.6 million Canadian women with children under six years old, almost one million hold jobs. But licensed day care spaces stand at just 220,000. Last week the federal government unveiled a $5.4-billion program designed to redress the balance. During the next

seven years, Ottawa will give parents $2.3 billion in tax breaks and offer the provinces up to $3 billion to subsidize and expand day care services. Said Health and Welfare Minister Jake Epp: “This is the most important social program that this government has yet brought forward.”

Epp’s announcement marked a turning point in the protracted struggle among feminists, conservative women’s groups, provincial officials and federal ministers to shape the first new national social program since the introduction of medicare in 1968. Indeed, so varied and intense were the pressures on Epp that one veteran federal bureaucrat jokingly likened him to a child’s inflatable punching doll—“the ones that go in a different direction every time you punch them.”

But when the program finally

emerged, feminists and day care advocates charged that it did not go far enough toward solving the basic problem: the chronic shortage of quality affordable day care spaces. Of the $5.4 billion, only $400 million was earmarked for the creation of more day care spaces. That sum, Epp said, would add 200,000 individual spaces to the 220,000 now available. But government figures show that there are 1.2 million children under six years of age who need care, and their number

is growing. Said Margaret Mitchell, the New Democratic Party’s health critic: “The federal government has missed the opportunity to meet the needs of over half a million Canadian children.”

Epp’s program is a three-legged package of tax breaks, grants to provinces—under the Constitution, child care is a provincial responsibility— and a special fund of $100 million for research. Even Epp’s critics praised the minister, a former high-school teacher from Steinbach, Man., for setting up the special fund. Its goal: to assist research and pilot projects aimed at such thorny problems as the day care needs of shift workers or working parents in rural areas, and the difficulties of integrating handicapped children into the day care system. Said Mitchell: “That fund is going to be very important, and I urge

groups across the country to apply immediately.”

Families would be able to choose one of two tax breaks worth $2.3 billion: a new child tax credit or an increased tax deduction. The tax credit will likely account for 90 per cent of the new expenditures. Under the current tax credit scheme, families with incomes of up to $24,000 receive an annual $524 rebate for each child. The new plan would increase that by $100 in 1988 and a further $100 in 1989. The tax credit declines in value as earnings rise— dropping off completely at about $45,000. But critics charged that the increase is insufficient.

For David and Glynis Lumley, two University of British Columbia students with a three-yearold daughter, Brianne, in day care, the tax credit offers little comfort. “Even paying $340 a month, we spend more than $4,000 a year on day care,” said David. “An extra $100 is nothing.”

But Epp staunchly defended the tax credit measures. They are intended, he said, to recognize the expenses of parents who choose to stay at home to raise their children or for those whose day care providers do not issue receipts— unlicensed day care services or babysitting relatives. “Not every parent wants to put their child in day care,” Epp noted.

“That’s fine for Toronto or Montreal or Winnipeg, but that’s not the universal experience.” Epp’s comments underlined a long-standing feud between feminists, who have pressed for federally funded day care centres, and conservative women’s groups, such as REAL Women of Canada, which have lobbied for tax breaks for women who choose to stay at home with young children.

The second tax proposal was equally controversial. Parents with child care receipts—usually from licensed day care centres or professional nannies— currently can claim a deduction of up to $2,000 per child from their taxable income. Epp would double that to $4,000 for each child who is under 7 or who has special needs; for older children, the deduction would remain at $2,000. In addition, Epp would re-

move the current annual limit of $8,000 per family.

But because tax deductions are tied to tax rates, the increase will be of greatest benefit to high-income earners. Married professionals John Conway and Linda McMullen said that they expect Epp’s plan will save them about $4,000 of the $14,000 they pay each year to keep their two children in a Vancouver day care centre. Said Conway: “Only people like us who can afford to shell it out and wait to get it

back will benefit.” Sociologist Katie Cooke, author of a 1986 study for the federal government on day care, noted that parents who can. provide receipts from a day care centre will get a tax break. But if they fail to find space in a day care centre, they will have no receipts.

The government program would also provide grants of up to $3 billion to the provinces to help subsidize existing day care centres and increase the number of commercial and nonprofit day care spaces. The bulk of the money—$2.6 billion over seven years—would go to subsidies. Ottawa would use the remaining $400 million to pay 75 per cent of the cost of set-

ting up new day care spaces in the nonprofit sector. Federal and provincial officials planned to meet this week to begin setting a formula for sharing the funds. Epp said that he expects the cost-sharing program will be in place by next summer.

For their part, most provincial social service ministers, who gathered in Ottawa last week to discuss the new program with Epp, responded favorably. Manitoba minister Maureen Hemphill said that the $2.3 billion allocated to tax breaks for parents would have been better spent providing more day care spaces. But Ontario’s John Sweeney said that the program lived up to his expectations —and he called for a quick resolution of the cost-sharing formula. Quebec’s Monique Gagnon-Tremblay said that it was “very flexible and respects the jurisdiction of the provinces.” Indeed, some critics complained that the program provided too much flexibility: by failing to set a single national standard, the disparity in services among provinces would be further aggravated. But Epp was unmoved, saying that he would not—and could not —impose national standards on day care centre operations. “No government program solves everybody’s problems,” he said.

At the very least, Epp’s day care package was a step toward solving one of the Conservative party’s central problems. The long-awaited policy is the final major initiative on the Tory government’s agenda. Party strategists consider that most of the others—deficit reduction, a constitutional accord, tax reform and free trade— have been successful, but are dry and lacking in voter appeal. A good child care program, they reasoned, would allow Conservatives to portray themselves as a government of compassion. Epp said he is convinced that, within the “political realities” and budget constraints of the day, he has accomplished that goal. The final verdict, as always, will belong to Canadian voters.