Economic Growth

New childcare legislation secured in Canada after COVID-19 highlights need for change

A child drawing on a wall with chalk.

With the new deal, Ontario families should see a significant reduction in childcare costs. Image: Unsplash/Kostiantyn Li

Ismail Shakil
Senior Correspondent, Reuters
Julie Gordon
Correspondent, Economics, Thomson Reuters
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Canada

  • The COVID-19 pandemic has highlighted the need for affordable, reliable childcare in Canada.
  • The Canadian government and Ontario have collaborated to create a national daycare system and cut fees in the province by 50%.
  • Announcing the deal, Prime Minister Justin Trudeau said "accessible, high-quality childcare" was key to building a resilient economy.

Canada's Liberal government has signed a C$13.2 billion ($10.5 billion) childcare deal with Ontario that will see fees in the province cut in half by the end of 2022 and create a national daycare system.

Ontario, the country's most populous province, was the last one to sign on to Prime Minister Justin Trudeau's C$10-a-day daycare strategy. The Liberals last April earmarked C$30 billion over five years for a national childcare program.

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The federal investment of C$13.2 billion in Ontario would be spread over six years, with an initial C$10.2 billion to reduce childcare costs to C$10 per day, on average, within four years.

Trudeau, announcing the deal alongside Ontario's Progressive Conservative Premier Doug Ford, said it would also create 86,000 new daycare spaces by the end of 2026.

"Accessible, high-quality childcare is key to building a stronger future, a more resilient economy and growing the middle class," Trudeau said.

The dire need for affordable, reliable childcare in Canada was laid bare by the coronavirus pandemic, as daycare and school closures forced many parents, mostly women, to cut back work hours or leave jobs to care for children, hurting productivity.

Parents in Ontario currently pay on average C$46 a day for childcare, the federal government said. The agreement aims to reduce licensed childcare fees for children under six by 25% as of April 1, with another reduction by the end of 2022.

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"In total, fees for families will be reduced in 2022, on average, by 50%, relieving parents of C$1.1 billion in childcare costs," Ontario said in a statement.

($1 = 1.2561 Canadian dollars)

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