Quebec’s subsidized daycare imposes real costs on taxpayers, limits choice for parents

Quebec’s Daycare Program: A Flawed Policy Model

Main Conclusions

• In 1997, Quebec instituted a system of subsidized daycare, providing daycare spots at a daily rate of $5 per day regardless of parental income. Despite some modest reforms, this “universal” daycare program retains its original structure.
• Quebec’s system is expensive. The government spends over $9,000 per child served, for a total cost of approximately $2.6 billion in 2014/15.
• Nevertheless, Quebec’s daycare system has been held up by some as a model for other provinces: advocates argue increased maternal labour-force participation generates tax revenue that offsets program costs and that the program produces beneficial child development outcomes.
• These claims should be treated skeptically. The resulting tax revenues from increased maternal labour-force participation likely do not offset the full cost of Quebec’s program. What’s more, the effects upon labour-force participation in Quebec cannot easily be generalized to the rest of Canada and daycare based on Quebec’s model would likely have significant fiscal costs if adopted elsewhere.
• Evidence for long-lasting child development gains from subsidized daycare is mixed. Troublingly, studies from Quebec show the program has contributed to significantly worse health and social development outcomes.
• Although the program is often described as “universal”, Quebec has not solved the problem of access and waiting times despite very high levels of government spending. Lengthy wait times remain in many areas, and children from higher income families are more likely to obtain a place in daycare.