Childcare services in Quebec: spending explosion

How expensive is a place in one of the subsidized childcare centres of Quebec?  The answer is : quite a lot. Ever since the inception of the program in 1997, spending as exploded while the number of available places have not (sources are the ministry of finances, the ministry of family and childcare and the Treasury Board).  Somehow, somewhere, there must be some overhead costs! This is quite indicative especially if we take into consideration that Pierre Lefebvre of the Université du Québec à Montréal compared the existing tax credit for childcare to the subsidized childcare services. Who benefits? The richest and the poorest only, everyone stuck in-between are worse-off with this policy. Everyone between 26,000$ and 75,000$ are considerably worse off.

In 2010, I took data from the Statistiques Fiscales des Particuliers for the year 2007 (latest available at that time) and checked how many people by income category had claimed the federal transfer for children aged between 2 and 6 and I replicated the tax credit that Lefebvre compares with in order to mimic a monthly transfer modulated to income. The transfer would represent 75% of the cost of childcare for the lowest level of income and would progressively drop to 26 % after 85,000$ and remain there. Such an estimation cannot be a “ballpark” one, but it does yield a saving of over 581 millions dollars for 2010.

Such a policy would contain out of control costs in the system while also allowing supply to match demand more easily. Moreover, poorer households would be directly targeted by the transfer rather than being declined the service or being stuck on waiting lists.

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