Universal childcare would generate up to $ 29 billion a year in tax revenue, a new report says

According to a new report, a universal childcare system spanning Canada would generate $ 17 to $ 29 billion in annual government revenue and pay for itself easily in the long run.

Published Wednesday by the Center for Future Work, the report finds that the combination of jobs created by an expanded childcare system and increased labor force participation by women could add more than $ 100 billion to Canada’s GDP. . The report suggests that building an affordable national childcare program is Canada’s best path to post-pandemic economic recovery.

“It’s an expensive program, and people will look at the cost of it and say, ‘Wow, that’s too much money,'” said economist Jim Stanford, who wrote the report. “This is where we have to compare it to the benefits that will be generated.”

In the September speech from the throne, the federal government pledged to make a “significant, long-term and sustained investment to create an early learning and childcare system across Canada.”

Childcare advocates welcomed the commitment, but program details are yet to be revealed.

Using Norway’s universal childcare system as a model, Stanford assumes that the Canadian system will provide enough space for 92% of all Canadian children between the ages of one and five. Other than that, the report makes no assumptions about the design of the system, nor does it set an exact price on the costs to build it. But Stanford said that even if Canada adopts the most ambitious proposals that have been made – with costs estimated as high as $ 70- $ 80 billion over 10 years – the report notes that the long-term economic benefits would still outweigh them.

Stanford estimates that a national childcare system would create more than 200,000 new jobs in early learning and childcare, and another 80,000 new jobs in the “upstream and downstream” industries, including 8,000 jobs. of construction needed to build or upgrade childcare facilities. He estimates that the increase in work provided by women in the primary parental age cohorts – from 25 to 50 – will amount to as many as 725,000 additional workers, in terms of both women entering the world of work and an increase in the number of hours worked .

Stanford, who writes an occasional column for the Star, said that while the benefits of childcare are well established, the fact that the system “will literally pay for itself” was not fully appreciated.

“I guess I want to try to give some broad numbers on this to make it more concrete for people, including our political leaders.”

In Quebec, which already has low-cost universal childcare and the highest participation of women in the workforce of any province, research shows that their childcare system is “profitable” for the government. Every $ 100 spent by the province produces $ 104 in provincial tax revenue and $ 43 for federal coffers.

Stanford said building a national childcare system would contribute both to the urgent need for immediate economic recovery in the wake of the COVID-19 pandemic and to strengthen Canada’s economy in the long term. This combination of short and long-term benefits makes it a “no-brainer,” he said.

The pandemic, which has disproportionately harmed women’s employment, underscored how crucial childcare is to economic stability, said Kate Bezanson, a sociology professor at Brock University, consulted by Stanford.

“We understand that without a substantial investment in childcare we have to face the prospect of a gender regressive recovery,” Bezanson said in an interview. “This is a recession that has been marked by significant losses for female employment, especially those with young children. We can’t invent it any other way. “

Bezanson referred to a recent study by the Women’s Budget Group in the UK which found that investing in a “care-led recovery” – for both children and long-term care recipients – would create 2.7 times more. jobs compared to the same investment in a more conventional construction-driven recovery.

“There is an emerging dialogue about the need to use a social infrastructure approach to address this particular moment,” he said.

Long-term benefits from the “advanced skills and abilities” of children who otherwise would not have received vocational early learning and childcare are not included in Stanford’s core calculations. This leads to an increase in high school graduation rates, better employability, higher career earnings, and even a reduction in health care and crime costs, he said.

“International experience and historical experience confirm that when investing in the development and well-being of young children, society is much stronger as a result,” he said. “It takes time for those effects to be felt, but they are really important.”

Carmina Ravanera, a research associate at the Institute for Gender and the Economy at the Rotman School of Management, said it took the pandemic to highlight the need for universal childcare because care work is mostly played by women and is historically underrated.

“This is something that can be changed with a national childcare program,” he said.

Ravanera, who co-authored a separate report for YWCA Canada on a feminist economic recovery plan, said we should view universal childcare as a long-term investment, rather than simply an expense.

Not only are there clear economic returns, he said, but it also creates a “healthier and more educated young population and a stronger workforce for the future.”