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Cost Estimate of the Federal National Child Care Plan

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Published on February 3, 2022 PDF

This report provides an estimated cost of the provincial and territorial aspects of the federal national child care plan announced in Budget 2021.


Communications

Quote

  • The gross cost required to meet demand would be $28.3 billion, $1.1 billion more than the $27.2 billion outlined in Budget 2021.

Yves Giroux
Parliamentary Budget Officer

News Release

{"id":27,"created_at":"2022-02-02T09:25:18-05:00","updated_at":"2022-02-03T08:59:06-05:00","slug":"canada-wide-early-learning-and-child-care-plan--plan-dapprentissage-et-de-garde-des-jeunes-enfants-pancanadien","title_en":"Canada-Wide Early Learning and Child Care Plan: positive impacts on economic growth, but not sufficient to fully meet demand","title_fr":"Plan d\u2019apprentissage et de garde des jeunes enfants pancanadien : impact positif sur la croissance \u00e9conomique, mais insuffisant pour combler la demande","body_en":"The Parliamentary Budget Officer (PBO) today released an estimated cost of the provincial and territorial aspects of the federal national child care plan announced in Budget 2021.\n\n\u201cThe gross cost required to meet demand would be $28.3 billion, $1.1 billion more than the $27.2 billion outlined in Budget 2021\u201d, explained Yves Giroux, PBO. In addition to the costs related to increasing the number of child care spaces and providing fee subsidies, the analysis considered the impacts of the plan on Child Care Expense Deduction claims, income tax revenues, and Canada Child Benefit transfers. The PBO estimated the cumulative net cost of the Canada-Wide Early Learning and Child Care Plan to be $26.4 billion by the end of 2025-26. \n\nPBO projected that in 2026, with 90% of gross funding allocated to subsidies, the 2021 budgeted funding would subsidize 678,800 full-time equivalent spaces, which is 182,000 fewer slots than required to meet the estimated demand at that time.\n\nIn terms of macroeconomic impacts, the PBO estimated that, as a result of the universal policy, the overall labour force participation rate would increase by 0.3 percentage points over the long term, which would result in a 0.4 percentage point increase in real GDP.\n\nThe cost estimate used the same set of parameters and assumptions for all provinces and territories, whether or not the province or territory had signed an agreement with the federal government at the time of publication with respect to the plan. Once all agreements are finalized, the PBO intends to publish a report with more detailed analysis for each province and territory.\n\nThe PBO did not produce detailed estimates of other elements of the plan due to a lack of policy details.","body_fr":"Le directeur parlementaire du budget (DPB) a publi\u00e9 aujourd\u2019hui le co\u00fbt estimatif des aspects provinciaux et territoriaux du plan national de garde d\u2019enfants annonc\u00e9 par le gouvernement f\u00e9d\u00e9ral dans le budget de 2021.\n\n\u00ab Le co\u00fbt brut de combler la demande de places s\u2019\u00e9l\u00e8verait \u00e0 28,3 milliards de dollars, soit 1,1 milliard de plus que la somme de 27,2 milliards pr\u00e9vue dans le budget de 2021 \u00bb, a expliqu\u00e9 Yves Giroux, le DPB. Outre les co\u00fbts relatifs \u00e0 l\u2019augmentation du nombre de places en garderie et aux tarifs subventionn\u00e9s, l\u2019analyse a tenu compte des impacts du plan sur les d\u00e9ductions fiscales pour frais de garde d\u2019enfants, ainsi que sur les recettes provenant de l\u2019imp\u00f4t sur le revenu et sur les transferts li\u00e9s \u00e0 la Prestation fiscale canadienne pour enfants. Le DPB a estim\u00e9 que les aspects provinciaux et territoriaux du Plan d\u2019apprentissage et de garde des jeunes enfants pancanadien repr\u00e9senteraient un co\u00fbt net cumulatif de 26,4 milliards de dollars d\u2019ici la fin de 2025 2026. \n\nLe DPB a projet\u00e9 que si 90 % du montant brut du financement \u00e9taient consacr\u00e9s aux places subventionn\u00e9es, les fonds pr\u00e9vus au budget de 2021 permettraient en 2026 de subventionner 678 800 places \u00e9quivalent temps plein, soit environ 182 000 de moins que n\u00e9cessaire pour combler la demande pr\u00e9vue.\n\nDu point de vue des impacts macro\u00e9conomiques, le DPB a estim\u00e9 que la politique universelle de garde d\u2019enfants augmenterait le taux global de participation au march\u00e9 du travail de 0,3 point de pourcentage \u00e0 long terme, ce qui se traduirait par une hausse de 0,4 point de pourcentage du PIB r\u00e9el.\n\nDans son estimation, le DPB a utilis\u00e9 le m\u00eame ensemble de param\u00e8tres et d\u2019hypoth\u00e8ses pour tous les gouvernements provinciaux et territoriaux, peu importe si, au moment de la publication de son rapport, ceux ci avaient conclu une entente avec le gouvernement f\u00e9d\u00e9ral concernant le plan annonc\u00e9. Le DPB a l\u2019intention de publier un rapport d\u2019analyse plus d\u00e9taill\u00e9e pour chaque province et territoire une fois que toutes les ententes auront \u00e9t\u00e9 sign\u00e9es.\n\nLe DPB n\u2019a pas pu produire d\u2019estimation d\u00e9taill\u00e9e des autres aspects du plan, faute de donn\u00e9es suffisantes sur la politique en question.","release_date":"2022-02-03T09:00:00-05:00","is_published":"2022-02-03T08:59:06-05:00","internal_id":"COM-2122-027","permalinks":{"en":{"website":"https:\/\/www.pbo-dpb.ca\/en\/blog\/news-releases--communiques-de-presse\/canada-wide-early-learning-and-child-care-plan--plan-dapprentissage-et-de-garde-des-jeunes-enfants-pancanadien"},"fr":{"website":"https:\/\/www.pbo-dpb.ca\/fr\/blog\/news-releases--communiques-de-presse\/canada-wide-early-learning-and-child-care-plan--plan-dapprentissage-et-de-garde-des-jeunes-enfants-pancanadien"}},"pivot":{"publication_id":644,"news_release_id":27}}