LAU: Liberals’ $10-a-day daycare disaster — why Canada’s child care plan gets a failing grade

Matthew Lau is a Toronto-based writer who specializes in business, politics and economics.In March 2021, Prime Minister Justin Trudeau’s Liberal government committed $30 billion over the next five years to providing Canada with $10-a-day childcare. Proponents claimed this huge expense would dramatically improve the lives of hard-pressed parents and their children, while encouraging more mothers to get into the workforce. Now it’s time for a report card. Mom and Dad better sit down. The news isn’t good. Parents are frustrated by waiting lists that stretch for years. Daycare operators say they are being strangled by bureaucracy. Overall quality is declining. Surveys show that widespread daycare space shortages are actually preventing parents from returning to work after parental leave. And this expensive federal program has proved to be dramatically unfair. It turns out the biggest beneficiaries are well-off families who were already using daycare; low-income families have largely been shut out.The original goal of the Canada-Wide Early Learning and Child Care (CWELCC) program was to create 250,000 new childcare spaces at an average price of $10 per day by March 2026. Five years in, neither goal has been reached. The latest figures from Ottawa reveal only 122,788 new spaces have been opened, while average fees vary widely: from $10 in some provinces to over $28 in others. Accessibility is the biggest issue. According to Statistics Canada, in 2019, 36% of parents said they had trouble finding child care for their children; last year, this figure was up to 50%. Evidence from daycares across the country bolsters this statistical data. .“I hear horror stories every day working in centres; people calling and begging for spaces,” Marianne Ellis, senior program manager with childcare operator Chances, told a legislative committee in Prince Edward Island in 2024. “There’s people that have been on [a wait list]…before they were even pregnant, and they still don’t have a space by the time the child is a year old.”In Orillia, Ontario, some facilities have temporarily closed their waitlists because they’re so long that any kids added to them will likely be in public school before a spot opens up. A poll in Manitoba last year showed that 52% of families had to delay a parent’s return to work because childcare was unavailable, up from 41% in 2016, before the federal Liberals launched their national childcare program. Declining care quality is another problem. The goal of charging parents $10 for a service with a market value of $50 to $60 per day in most major cities requires significant government intervention. But along with the subsidies provided to childcare centres to lower their fees comes a web of bureaucratic controls. In some provinces, childcare has essentially become a government-controlled enterprise. Childcare centres participating in the government system have responded to this financial and managerial squeeze by cutting programs and staff, which reduces the quality of care. Anya Kerr, who runs childcare centres in Alberta and Ontario, explains that “the unique needs and expenses of centres in remote areas cannot be met” under the existing system. As Kerr put it, “We’ve already had to make cuts to our quality programs, services for families, and nutrition costs, which goes against our founding philosophy.” British Columbia (BC) was the first province to roll out $10-a-day daycare with its ChildCare BC program in 2018, three years ahead of the federal initiative. As such, it had a long head start on the rest of the country. Yet the situation appears most dire in that province. According to StatCan, in 2025, BC had the most expensive average daily daycare costs in the country at $28.55 per day. And a staggering 68% of BC families who use childcare reported difficulty finding a daycare spot for their children. .In February, the provincial government imposed a moratorium on further expansion of ChildCare BC due to its high costs and unfairness. Ample evidence suggests the program is not helping the province’s neediest parents. In 2024, for example, UBC researchers had to abandon plans to study the effects of $10-per-day childcare on low-income single mothers after they could only find 13 such families actually receiving the benefit. The vast majority of the cheap spaces are in the hands of middle and upper-income families.When the Liberals’ national $10-per-day daycare was introduced in 2021, proponents argued it would free new mothers from parenting and spur their entry (or re-entry) into the workforce. Some even claimed heavily subsidized daycare would “pay for itself” as additional federal and provincial tax revenue from these mothers’ extra income would easily cover the total cost of the subsidies. Now, after five years, it is possible to test those claims. The C.D. Howe Institute recently put the federal CWELCC program through a rigorous cost/benefit analysis. Its conclusion: rather than paying for itself, the pricey program has generated a net loss of $16 billion. The reason for this huge negative rate of return is tied to the essential unfairness on display in BC. The families making the greatest use of heavily subsidized daycare are not the families who most need it. The bulk of CWELLC benefits are going to “households already using regulated childcare, particularly high-income families, [who] were simply able to substitute government-subsidized care for the market-priced care they were already paying for,” the report states. As for the promise of more mothers in the workforce, “Maternal workforce participation has increased only modestly.” Child development outcomes are similarly characterized as exhibiting “minimal to no additional gains.” Rather than continue with the Liberals’ extremely expensive universal, subsidized daycare model, the C.D. Howe report suggests the government prioritize measures that help “low-income, less-educated, or single-parent households with preschool-aged children.” And this is best accomplished, it says, with “an income-tested, refundable tax credit … to increase flexibility and support families using non-subsidized care.” In other words, it’s time to end the $10-a-day daycare experiment and shift to something cheaper, better, and fairer. Matthew Lau is a Toronto-based writer who specializes in business, politics and economics. The original, longer version of this story first appeared at C2CJournal.ca.

LAU: Liberals’ $10-a-day daycare disaster — why Canada’s child care plan gets a failing grade

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