Amidst a shortage of childcare spaces, the government is spending more on diversity, equity, inclusion initiatives.
Amidst a shortage of childcare spaces, the government is spending more on diversity, equity, inclusion initiatives.
T he Trudeau government’s takeover of Canada’s childcare sector, initiated in 2021, has been a mess from coast to coast. So bad have been the results to date that the auditor general of Canada is now planning an audit.
Worsened quality and widespread shortages are already well-documented outcomes of the Trudeau government initiative. What is not so well-documented is how many taxpayers’ dollars for childcare are now being consumed by bureaucracy, unions (as the governmentalization of childcare increases the unionization of its workforce), activists, and lobbyists, instead of being used to provide actual childcare.
It’s not exactly a secret that, when government gets involved in running something, not all the dollars end up being spent as efficiently as they might be. When a new scheme draws in lot of extra money and an extra layer of government, there is tremendous potential for waste.
As some background: Provincial and municipal governments have long been involved in childcare in Canada. But with the Trudeau government’s national program for heavily taxpayer-subsidized government-regulated day care, billions of dollars more every year are now sloshing around three levels of government before they make it to actual families or childcare providers.
Begin in Ontario, where the additional billions in federal money is disbursed to the provincial government, and then downloaded from the province to 47 municipal governments. Take Peel Region (population about 1.5 million) as an example. Andrea Mrozek, a researcher for the Canadian think tank Cardus, estimated last year that, based on Peel’s 2023 budget, 40 new full-time municipal bureaucrats will be hired there to administer childcare. That’s on top of however many federal and Ontario provincial bureaucrats will be added.
Mrozek also cited an Ontario government memo noting that, in 2023, childcare funding to municipalities would include $26 million for administration of the federal program, $85.5 million for a “one-time transitional grant” for administration, plus another $4.5 million for administering childcare wage enhancements and home-care grants.
These significant administrative costs are not unique to Ontario. To take another example, in Cranbrook (population about 20,000) in British Columbia, the city recently issued a 26-page request for proposals earlier this year to hire a consultant to help it access provincial childcare grant money.
To repeat: Taxpayers are now paying for consultants to move money around between levels of government; meanwhile, the city of Cranbrook declares it has a “desperate need for childcare” based on an assessment earlier this year showing it has a shortage of childcare spaces. Stories from elsewhere in British Columbia similarly confirm shuffling money between governments to be a messy and taxpayer-unfriendly affair.
Moving then to another province, in Nova Scotia, Trudeau has declared his intention “of moving to a fully not-for-profit and publicly managed system.” The results so far include widespread shortages and about the destruction of about 1,000 private childcare spaces in recent years.
The most recent update on the federal and provincial childcare spending plan in Nova Scotia is most telling. It allocates over $390 million to subsidize existing childcare spaces and workers, $52 million to create new childcare spaces, over $30 million “to implement an inclusive early learning and child care strategy” focusing on diversity and equity, and $23 million for administration.
In other words: Amidst a shortage of childcare spaces, the government is spending more on diversity, equity, inclusion, and administration (over $53 million total) than on new childcare spaces ($52 million).
Additional administrative costs resulting from the governmentalization of childcare are those costs downloaded onto childcare operators themselves, torpedoing their bottom lines, exacerbating the effects of government revenue controls, and ultimately reducing childcare supply.
Mrozek reports that in Ontario, many childcare operators “report spending significant hours weekly applying for grants and replying to both municipal and provincial requests for information. Some report having duplicate inspections from both levels of government.” In Alberta, day-care operator Krystal Churcher, who chairs the Association of Alberta Childcare Entrepreneurs, says her government-imposed administrative burden works out to $28 per child per month, on top of an annual $30,000 audit cost.
Private operators who must contend with government intrusion into their operations must simultaneously fight activists and unions just to access grant money available to their government-run and non-profit competitors — money without which the private operators would now be uncompetitive. In Ontario, about 140 activist groups, unions, and other non-profits recently sent a letter to the provincial government to try to restrict private for-profit operators from being able to access public funding in an industry now awash with it.
Many of these activist groups lobbying for greater government control of childcare and the restrictions on the private sector are — surprise! — taxpayer-funded. To name just three anti-business activist signatories, Better Child Care Ontario Inc ($203,186), Child Care Now ($186,688), and the Childcare Resource and Research Unit ($143,505) all received transfer payments from the federal Department for Women and Gender Equality in 2022–23.
Given the huge sums of money involved — the federal government alone committed $30 billion over five years to its national day-care program in its 2021 budget — and the fact that the government is not a model of financial transparency, it is not easy to track where all the childcare spending is going.
Increasingly, however, analyses and anecdotes are piling up to show how bureaucrats, unions, and activists are the ones benefiting from the government takeover. Meanwhile families who need childcare, entrepreneurs in the childcare sector (overwhelmingly women), and taxpayers will receive rather less, whether in services or value, than they might, however optimistically, have hoped.