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Interesting read:

Federal government crushing private-sector child care in Ontario

Appeared in the Hill Times, October 1, 2024
Federal government crushing private-sector child care in Ontario
The Trudeau government’s national $10-per-day child-care program continues to produce widespread shortages in Ontario, and its exclusion of the private sector is a major reason why.

In a recent letter to the federal minister responsible for child care, the Peel Regional chair said the federal quota that limits participation of private for-profit suppliers is “restricting the creation of new child care spaces.” According to the letter, the Trudeau government’s quota “has led to a waitlist of more than 2,000 child care spaces that cannot be approved due to this artificial limitation.”

In a separate letter to the Association of Municipalities of Ontario and Federation of Canadian Municipalities, the chair said federal restrictions “are contributing to a shortage of available child-care spaces for children and families” and resulting in families being unable to access child care.

While the federal restrictions don’t actually ban private for-profit providers, they limit their access to the federal program. And private operators—while willing to supply more child care—cannot properly compete in a sector now awash in public funds without equal access to funding. Thus the shortage of more than 2,000 spaces.

While labour unions, activist groups and non-profit organizations have fearmongered about private for-profit child care, economic analyses have shown for-profit organizations tend to be better governed, better focused and more efficient than non-profits because the profit requirement imposes discipline that demands high quality and efficiency. Simply put, a level playing field encourages competition, and competition is better for families than a monopoly of providers all following the government-preferred operating model.

A level playing field would also allow for-profit providers to step in and serve families to eliminate (or at least reduce) child-care shortage, as in Peel Region. Notably, many other parts of Ontario are also suffering from dire shortages due to the government takeover of the child-care sector.

In Kawartha Lakes, the average child-care wait list is now a shocking 6.4 years long, up from 3.7 years before Ontario joined the Trudeau government’s child-care program. In the Region of Waterloo, the wait list more than doubled since the program’s announcement to 9,200 children; in Niagara Region, the wait list has increased 76 per cent.

Even if provincial targets for child-care spaces are reached, massive shortages would persist. The County of Wellington, for example, has a provincial target of 1,721 new child-care spaces from 2022 to 2026, but currently has 7,800 children on wait lists. The city and county of Peterborough is expected to add 485 spaces by 2026, but 3,600 children are on wait lists there.

These shortages are no surprise. The Trudeau government is pouring billions into subsidizing child care, artificially inflating demand, while imposing control on the revenue and operations of child-care operators, depressing supply. Add in the Trudeau government’s discrimination against for-profit suppliers, and the shortages get even worse.

Earlier this year, Andrea Hannen, executive director of the Association of Day Care Operators of Ontario, told the federal Standing Committee on the Status of Women that “Canada’s childcare entrepreneurs are asking whether they have a place in Canada’s national childcare program or in the future of childcare at all” given the federal government’s hostility towards private for-profit providers. “Child care entrepreneurs,” she concluded, “are being targeted for extinction through the nationalization of Canada’s child care sector.”

The Trudeau government’s program has been disastrous—both for child-care entrepreneurs being pushed out of the sector and families now unable to access the child-care services they need.

Author:
Matthew Lau
Adjunct Scholar, Fraser Institute

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