Feds promise economic “hat trick” with national child care plan

One of the central goals in today’s ambitious federal budget was addressing the disproportionate impact of the Covid-19 pandemic on women. The government aims to do that with a national child care program and an effort to push corporate diversity in the financial sector.

While the budget features an array of spending initiatives, one of its centerpieces is a pledge to spend $30 billion over five years (and $8.3 billion per year after that) to improve access to affordable childcare and early learning — a need that has been thrown into the spotlight by a pandemic that has disproportionately affected women.

“Covid has brutally exposed something women have long known: Without childcare, parents – usually mothers – can’t work,” said Chrystia Freeland, finance minister and deputy prime minister, in today’s budget speech.

“The closing of our schools and daycares drove women’s participation in the labour force down to its lowest level in over two decades,” she noted.

Today’s budget aims to address that with significant funding for childcare that aims to reduce the cost by 50% by 2022, and to ultimately bring the cost of childcare down to $10 per day within the next five years throughout the country.

Not only is this initiative designed to help women rejoin the labour force, but the funding should also create jobs in childcare — a sector that tends to employ more women.

Freeland said the program “delivers a jobs-and-growth hat-trick, allowing both mothers and fathers to work, thus increasing our workforce and boosting our growth, creating jobs for mostly women childcare workers, and helping to raise a smarter, better educated next generation.”

In a report, TD Economics notes that while negotiating with the provinces to implement these ambitious plans could prove challenging, “if successfully implemented, the program could go along way to raising the participation of women in the labour force.”

Citing the example of Quebec, which already has affordable childcare, TD noted that the province’s gap in labour force participation between men and women is half of the disparity seen in the rest of the country. If the federal government can generate similar results in the rest of Canada, this “would mean an additional 250,000 women in the workforce, lifting the economy’s potential.”

Alongside this ambitious effort to enable more women to enter the labour force, today’s budget also seeks to encourage diversity in the upper echelon of the financial sector. The government said it will launch a public consultation on measures to bring diversity requirements to the federally regulated financial sector.

The goal of the consultation will be “to promote greater gender, racial, ethnic, and Indigenous diversity among senior ranks of the financial sector,” the budget said.

At the same time, the government is proposing that Crown corporations be required to implement gender and diversity reporting starting in 2022.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.