Gender and Work,  Public Sector Work,  Research

$10-per-Day Child Care Plan Already Boosting Canada’s Economy

November 24, 2024 /

In 2021, Canada’s federal government announced a new $10-per-day national early learning and child care (ELCC) program, which began rolling out in 2022. It has increased the number of regulated child care spaces in Canada, and significantly reduced (by over 50%) average fees paid by parents.

Economic research has long highlighted the economic benefits of accessible, quality ELCC, in at least three broad categories:

    • Economic activity and employment associated with the direct operation of ELCC services.
    • Improved labour force participation, employment, and incomes for parents of young children (especially women).
    • Improved lifetime achievement for children who received high-quality early child education (including superior outcomes in education, employability, earnings, and health).

While it is still early in the new program’s history, it is clear major economic benefits are already being generated. A new report, Powering Growth: Economic Benefits from Canada’s $10-per-day Early Learning and Child Care Program, by Jim Stanford (Director of the Centre for Future Work) quantifies those benefits, including:

    • Significant job-creation: Employment in ELCC has grown by 40,000 positions since 2019. This sector has been the sixth largest source of new work in Canada since 2019.
    • Earnings: Increased funding under the new program, combined with complementary agreements around wage grids, training, and workforce retention, are supporting increased wages for ELCC workers. Average weekly earnings have increased 28% in the last five years.
    • Hours of work: Another sign of improving job quality in the ELCC sector is the growing prevalence of full-time work. Average hours grew by 6% (or almost 2 hours per week) between 2019 and 2024.
    • Aggregate earnings: ELCC workers will earn over $8 billion in wages and salaries in 2024 (up almost two-thirds from under $5 billion in 2019), supporting stronger consumer spending in many thousands of households.
    • Female labour force participation: Female labour force participation has grown notably, supported by the expansion of ELCC services. Since 2019, core-age (25-54) labour force participation by women has grown by 1.4 percentage points (translating to 110,000 additional workers.
    • Female full-time work: Accessible ELCC services allow more women to work full-time hours. The share of core-age women working full-time has increased by 2 percentage points since 2019, equivalent to adding another 65,000 women to the labour force.
    • GDP growth: Direct GDP in the ELCC sector will exceed $11 billion in 2024, a strong increase from 2019. Further GDP gains are also produced by supply chain purchases by ELCC centres (including construction and renovation of facilities), downstream consumer spending by newly-hired ELCC workers, and the output of incremental female workers engaged in paid work thanks to more accessible, affordable ELCC services. All told, $32 billion in additional GDP was generated in 2024 from the combination of increased direct ELCC production, indirect (upstream and downstream) spin-off jobs, and increased female labour supply. The expansion of ELCC services likely prevented Canada from experiencing a ‘technical recession’ in the second half of 2023.
    • Fiscal benefits: Federal and provincial governments collect a significant share of incremental GDP through various tax channels (including income, sales, and corporate taxes). The enhancement to national output arising directly and indirectly from expanded ELCC services has thus already contributed several billion dollars to annual government revenues.
    • Inflation: The average cost of child care services to Canadian consumers declined 28% between 2021 and 2024 – in contrast to the 13% increase in overall consumer prices experienced in the same time. As the biggest ELCC cost reductions were being introduced in 2022 and 2023, ELCC price cuts measurably reduced national inflation.

Please see the full report for detailed evidence on these varied channels of economic benefits already visible from the introduction and expansion of the $10-per-day program. Canada’s economy is already benefiting from this important program.

Ce rapport est également disponible en français.

Jim Stanford is Economist and Director of the Centre for Future Work. He divides his time between Sydney, Australia and Vancouver, Canada. Jim is one of Canada’s best-known economic commentators. He served for over 20 years as Economist and Director of Policy with Unifor, Canada’s largest private-sector trade union.