Want to Spend 8 Billion on Childcare?

The International Monetary Fund says Canada could spend that and get more back in return

If you have a child in daycare, you know it’s expensive. If you have more than one child in daycare, you might, literally, be working just to pay the daycare costs.

You work because, in 3 years, they’ll be in school and you want to keep your position; you don’t want to have to hit the pavement again to get a new job in 3 years.

Or, maybe, looking at how little you’d have left after paying for care, you decided NOT to go back to work after having children. But, if care wasn’t so expensive, would you have stayed at your job?

The International Monetary Fund has released a report that says Canada could spend 8 billion dollars annually on childcare subsidies and get every penny and more back. The report is called Women are Key for Future Growth: Evidence from Canada.

$8 billion is about 10 times more than the government plans to spend per year.  The IMF says that spending 8 billion would cut daycare fees by 40% and the 150 000 highly educated women who are, right now, at home, would be able to go back into the work force. From the income taxes and economic growth that would result, the government would get back $8 billion.

Page 27 of the report says:

If they [educated women staying at home now] all enter the labor market and start paying taxes, that would raise GDP by 2 percentage points, which would in turn raise federal income tax revenues by about Can$8 billion, fully compensating the cost of the program. In other words, the program would be fully financed in a federal government perspective. Importantly, to achieve the policy goal of enhancing work incentive, access to subsidized child care fees should be conditional on employment.


The IMF looked at Quebec, where they have a provincial daycare subsidy program, and found that the gap between men and women in the workforce, and the gap in wages, is smaller than in the rest of the country.

Read more on the story CLICK HERE and CLICK HERE for the official report (it will pop up as a PDF file).

What do you think of the IMF’s idea?

Some parents don’t want to work while their children are small, and that is fine. But, some parents WANT to work but can’t afford daycare, while others HAVE to work and the cost of care is a huge struggle.


(Title image from Flikr)