Canada is heading to elections. It’s opportunistic in order to try and acquire a majority government. We have 2 main parties (to various degrees of left/right) and then some supporting smaller parties (both hard left). There’s a cadence here of a few steps left, a few steps right. Keeps some semblance of balance and generally the country keeps path. We went through the global recession with tight fiscal control, and then the recent social uprisings with liberal social values. I find myself aligning more to centrist values, so depending on the election cycle, the edges of either of the parties platforms.
One particular item announced in the competing platforms is child care. This is an odd topic for those who don’t have kids, or never had. Sort of like schools when you’re an adult, or hospitals when you’re young. Anyhoot, the standing government (left) has set up agreements nationally to introduce a $10/day day care program. There’s a lot of money behind this, and the gist is that the provinces will be able to pay out for day care services (and meet their criteria).
The other party (right) wants to scrap that program and institute a credit program that covers 75% of fees to parents, up to $6000 annually. This gives parents the flexibility to select personalized services (not regulated) or homestead parents.
Day Care is one of those things where it’s a tough choice for a parent. Licensed day cares provide stability (except perhaps in Quebec) with known hours, a structured system, and lots of kids/supervision. Unlicensed day cares provide tons of flexibility, much smaller groups (if they are not underground), and the added risk of the provider being available (if they get sick, it closes). We opted for an unlicensed one, through reference, and it was a great experience for the kids.
Right, so now the math.
Day Care Costs
Depending on where you live, the costs change dramatically. I was recently paying $60/day for it. Some pay a lot less. On average, it’s not too far from $1000 a month for infants, and $900 for toddlers. So let’s say $950/month. That’s $11,400 a year.
The $10/day play comes up to $3,600 a year. The 75% credit should be $2,900(8,500 off), but it caps at $6,000 credit… so you’re paying $5,400. That’s a solid difference.
Anecdotally, where I live the daily costs are ~$70/day, which is $25,000 a year. The first plan would cost me $3,600 a year, the 2nd would cost me $19,000 a year.
Credit vs Subsidies
The core value behind both concepts is about choice. Credits give people the choice to select the item they want, which would then potentially drive market innovation or variety, with it’s inherent risks. Subsidies instead put the power of choice in the government’s hands, and ensure that the options present meet a certain “base level standard”.
Many services are subsidized – nearly the entire agricultural market. This ensures some level of food price stability, as the providers are ensured a certain amount of return. This can get out of whack something fierce with effective lobbying – the US beef and corn markets are just astounding.
Credits make sense when there’s a complex supply chain and the market is not domestic, or if the item itself is not applicable to the general population. Like a home office credit pre-pandemic. It shifts the burden to the citizen to manage their finances, and the “rich” with decent lawyers can take major advantage of credits to offset income.
The challenge I find in political platforms today is that they are less about the practical aspects, and more about the ideological mandates. Platforms are complex beasts, there are dozens of items listed in each, and some will resonate, and some won’t. New parents are going to grasp on one part, while retirees will look at something else. The urbanite has a much different set of goals as someone who owns a farm. Finding the balance between both is next to impossible, or perhaps so difficult that it’s ignored.
What is going to happen instead, with a 32 day election period, is that we’re going to have a half dozen sound bites on ideological items, and the actual platforms won’t be considered. The good news is that this will all be over relatively quickly.