The stated intent for ELCC in the budget is to “protect” the $10-a-day child care program by maintaining existing funding commitments—approximately $8 billion per year in federal transfers over five years. The problem is that in a system plagued by massive shortages and unsatisfied family demand, staying still is effectively going backward.
While over 900,000 children are benefiting from drastically reduced fees, the budget’s omission of new capital expansion funding risks undermining the very system it intends to save. As Gordon Cleveland argues in his recent article for The Conversation, “Federal Budget: Mr. Prime Minister Child Care is Infrastructure Too”.
The core goal of the Canada-wide program is to ensure “all families have access to high-quality, affordable and inclusive early learning and child care”. On the affordability front, great progress has been made. On the access front, the budget has “pressed the pause button” on crucial expansion efforts.
The Space Shortage: An analysis of Statistics Canada data suggests that, outside Québec, Canada is still short by at least 278,000 child care spaces, and possibly as many as 384,000, to meet the goal of covering 59% of children aged zero to five.
A Broken Platform: The government’s Liberal platform promised 100,000 new spaces by 2031 (on top of the 250,000 previously promised by 2026), committed to good wages for Early Childhood Educators (ECEs), and pledged to link child care expansion with federal housing developments. None of these essential expansion and quality measures were addressed in the budget.
The Auditor General’s Warning: This lack of forward momentum is particularly concerning given that the Auditor General has already found that fewer than half of the spaces promised over the first five years have been created.
This failure to invest in capital expansion creates a paradox: the dramatic reduction in fees has successfully driven up demand, but without a corresponding increase in supply, families are simply trading high fees for long, unmanageable waitlists.
The economic benefits of a robust child care system are undeniable and align perfectly with the government’s stated priorities for economic growth and gender equity.
Labour Force Participation: Following Québec’s model—where over 85% of mothers with young children are employed—could put over 220,000 additional women into the Canadian workforce. Former Bank of Canada Governor Stephen Poloz noted this could raise Canada’s potential output by tens of billions of dollars per year.
The Risk of For-Profit Expansion: Failure to fund the public and non-profit sectors for expansion creates a vacuum that provinces may fill by emulating Québec’s past mistakes. When Québec introduced tax credits that incentivized for-profit expansion, the number of spaces grew quickly, but the quality and staffing were found to be very poor. The federal program’s preference for the non-profit sector hinges on sufficient capital support, which is currently missing.
If the federal government truly wants to protect and strengthen the child care system, its priority must shift from simply maintaining the current supply to improving access for the currently unserved. This will take an increased investment, but it is an investment that will pay dividends as illustrated in Quebec. Another important action would be to unlock the $1 billion Child Care Expansion Loan and Grant Program promised in last year’s federal budget through the Canada Mortgage and Housing Corporation (CMHC). By treating child care expansion as a high priority for public capital investment, the government can create a systemic, lasting solution that addresses the waitlist crisis and finally delivers on the promise of universal access to quality child care.