Canada Program

By Sierra Lloyd (’25)
 

On March 26, 2024, the Canada Program hosted a special event with the Honorable Karina Gould, Leader of the Government in the House of Commons in the Canadian Cabinet. The well-attended event, held at Harvard Kennedy School and in collaboration with the Harvard Business School, was titled “Supporting Caregiving for a Thriving Economy” and addressed Canada’s recent Early Learning and Childcare Initiative, a national program subsidizing accessible and universal childcare for children aged one to six.

Before this childcare program, daycare in Canada consisted of a mix of public, nonprofit, and private strategies. Costs were exorbitant, and in some cases, parents would have to pay as much for childcare as they would earn going back to full-time work. This meant parents who wanted to rejoin the workforce couldn’t do so. Journalist Rachel Pulfer described Gould’s childcare initiative as a “game changer” for many women such as herself. 

While universal subsidized childcare is new nationwide in Canada, it is long established in Quebec, a province which began their program in 1998 for a parental fee of $5 a day. Following its implementation, Quebec experienced a significant increase in women’s workforce participation, raising income tax revenue to more than cover the costs of the childcare program. But having lowered daycare rates too quickly, demand quickly exceeded supply. In designing the nationwide policy, Gould and other ministers learned from Quebec’s mistakes and didn’t lower fees so dramatically at the outset. The finalized initiative lowers fees across the country to an average of $10 a day by 2026, and lowered fees 50 percent in the first year. 

In 2015, candidates for the New Democratic Party ran on a platform for $15-a-day childcare without receiving much interest from voters. By 2021, following the COVID-19 pandemic, affordable childcare was much more of a priority for the public at large, including for grandparents to whom the burden of care often fell as parents worked from home. 

The Early Learning and Childcare Initiative is designed to make the parents of young children more economically productive and increase the number of dual-income households across all provinces. This will contribute to Canada’s overall economy and is projected to increase government revenue by a 50–80 percent rate of return. 

Because Canada is a federal country, in which most social programs are delivered at the provincial level, getting all provinces on board has been the challenge. Canada’s diverse population also presents challenges to ensure that remote communities, indigenous nations, and programs for disabled children benefit as well. British Columbia, one of Canada’s big four provinces, was the first to implement the new initiative, followed by Nova Scotia. This pressured others to join. Differences across provinces—in daycare worker wages, daily cost, and other factors—is helped by each province having access to similar resources for their population’s childcare program. For example, all except Ontario and Alberta raised the minimum hourly wage for daycare workers. Manitoba instituted a sliding scale daily rate for childcare based on family income, but people need to apply to be eligible. In Gould’s experience, the best model has daycare centers add up their costs, subtract income from the $10/day charge to parents, and look to the government to cover the funds that come up short.

Today, Canada boasts the highest female workforce participation rate in its history. Increasing the number of people who can afford childcare means increasing the demand for childcare in the economy—which in a standard economic model would mean increasing prices. It would be interesting to see economic models on whether the increase in income tax revenue will continue to account for increasing costs associated with the childcare program. Perhaps this initiative could also increase the number of children women in Canada decide to have, in a demographic transition point of relatively low fertility rates. The fact that Canada’s federal government could use Quebec as a smaller-scale model of how universal childcare could work as a public policy was fortunate, for both the policy’s efficiency and insight into its ultimate impact. 

Sierra Lloyd (‘25) is an undergraduate student at Harvard College. Lloyd is a student of Antonia Maioni, 2023–2024 William Lyon Mackenzie King Visiting Professor of Canadian Studies in the Canada Program.

Caption

Left to right: Karina Gould, Antonia Maioni, and Rachel Pulfer. Used with permission by Antonia Maioni