(Quebec) Quebec plans to reduce the bill for thousands of parents whose children attend an unsubsidized private daycare, has learned Press. Work is underway to improve the tax credit for childcare expenses so that the cost approaches the rate of $ 8.50 per day in effect in childcare centers (CPE) and others. subsidized child care.
This measure, the cost of which has already been estimated at $ 200 million, is in the process of being part of the reform of childcare services that the Minister of Families, Mathieu Lacombe, must present before the end of the month. He will table a bill and a plan to “complete” the network with the addition of 37,000 subsidized places within about five years, therefore beyond the current mandate.
Prime Minister François Legault will address this reform in his opening speech for the new parliamentary session on Tuesday, one year before the general elections.
An improvement in the tax credit would be confirmed in the “minibudget” of the Minister of Finance, Eric Girard. Discussions are underway to determine new tax parameters. The date of November 22 was circled for the filing of the “minibudget”, but it could change. The Trudeau government has just announced that the parliamentary reopening in Ottawa will take place on that day.
Rates of up to $ 70 per day
Quebec is thus considering settling the inequity towards parents who pay more because they send their children to an unsubsidized childcare service. They often do so because access to a “reduced contribution place” at $ 8.50 per day, as in a childcare center, is always difficult. About 50,000 children are on a waiting list, according to the government – a count that is imperfect, however.
Quebec is not trying to further develop the unsubsidized network. He does not intend to grant a permit to any promoter who would like to open a daycare; safeguards exist to avoid unbridled development, as we have seen in the past. It plans to improve the tax credit while it is time to complete the conversion of non-subsidized child care centers into subsidized child care services, an operation that is taking longer than expected.
Quebec has nearly 1,200 non-subsidized day care centers offering 70,000 places. This is almost a quarter of the places in the network, subsidized or not. These daycares are mainly found in urban areas.
The average rate varies between $ 38 and $ 51 in the five largest cities in Quebec and can even reach $ 70 per day, according to a consultation document from the Ministry of the Family which cited a study on the subject.
The current tax credit lowers the bill and ranges from 26% to 75% depending on family income. There is a ceiling on eligible expenses, which has the effect of preventing the state from paying the bill for a daycare center that decides to increase its fees too significantly. However, this ceiling is too low and no longer corresponds to reality, according to the daycares.
For a family whose parents each have a gross income of $ 50,000, the tax credit represents about twenty dollars a day, which keeps the parents’ bill above $ 8.50.
In a report tabled a year ago, the Auditor General of Quebec estimated the additional bill that parents whose family income is $ 90,000 must incur. Depending on whether the daycare fee is $ 35 or $ 55 per day, this family will have to pay between $ 550 and $ 5,300 more per year than another whose child occupies a reduced contribution place.
This difference is a collateral impact of the Legault government’s decision, taken in the fall of 2019, to bring back the single rate in subsidized childcare services – whether it concerns childcare centers, subsidized private daycares or childcare services. in a family environment. He abolished the additional contribution that had been introduced under the Couillard government and which reached up to $ 13.20. Since 1er January, the single rate for a subsidized space is therefore set at $ 8.50 per day – it is indexed annually.
Quebec had not provided any financial relief for parents whose children attend non-subsidized private daycare centers. Since the tax credit for childcare expenses then remained the same, the difference in the cost to parents between a subsidized space and a non-subsidized space became much larger.
This difference would be eliminated with an improvement in the tax credit.
Pressure tactics this week
The Legault government still intends to convert private, non-subsidized child care centers into subsidized child care services. Quebec authorized at the end of August the conversion of 25 daycares with a total of 1,767 places. Some 1,750 additional unsubsidized spaces are expected to be converted into reduced contribution spaces next year.
We can see that the conversion operation will take a long time. In two years, only 5% of the 70,000 places will have been converted.
This is one of the reasons behind the Legault government’s desire to reduce the bill for parents who attend non-subsidized daycare centers, until the conversion is complete. Quebec is also studying the idea of tightening the quality criteria imposed on these daycares.
Associations that represent non-subsidized private daycare centers have announced pressure tactics to denounce the inequity towards them. Members of the Alliance québécoise des garderies private non-subsidized will close their doors on Wednesday and Thursday. Those of the Coalition of Unsubsidized Private Daycares will reduce their opening hours on Wednesday and plan to have closed days starting next week.
The government’s decision to increase the salaries of early childhood educators now puts pressure on these daycares, which are also suffering from a staff shortage.
Quebec considers that it has the means to improve the tax credit. He will receive $ 6 billion from Ottawa over five years without conditions, under the child care agreement reached before the federal election was called. And its coffers are replenishing faster than expected thanks to the strength of the economic recovery. Minister Girard told Press recently that the $ 12.3 billion deficit forecast for the current year will be revised downwards in its fall economic update.
Future reform measures
- Creation of 37,000 subsidized places within about five years, which represents a cost of more than 500 million dollars per year in the long term (this is without counting the cost related to the construction of the childcare centers). The cost of a place in a childcare center for the State is $ 15,500 per year, which covers 90% of the total bill (9% is borne by the parents). That’s nearly $ 13,000 for a subsidized daycare space and a little over $ 6,800 for a subsidized home childcare service. Quebec wants to give itself the power to launch CPE projects itself, instead of going through a call for projects.
- Repatriation in the bosom of the State of the one-stop shop for access to a place in childcare. Place 0-5, managed by the Coopérative Enfance Famille, has been the subject of much criticism.
- Revision of admission policies for childcare centers. They can choose their clientele and, in some cases, use criteria that have been denounced by the Auditor General (being the grandchild, niece or nephew of an employee; the child of the family of a former employee; the brother or sister of a child attending a particular school).
- Adoption of new regulations for private family daycare centers. At present, these daycares do not require a permit from the Ministère de la Famille. The state imposes only a few minimum safety standards on them. They can accommodate up to six children. The Quebec government does not have precise data on them. Based on 2017 tax data, he estimates that around 9,000 these daycares reported child care expenses of at least $ 5,000 annually. These costs would correspond to the care of approximately 41,000 children.
Comparison of childcare costs
Cost for a family where each parent earns a gross working income of $ 50,000
(In childcare centers and in non-subsidized private daycare, at three different rates)
Place in childcare center
Gross cost per day: $ 8.50
Tax credit for childcare expenses: $ 0
Federal assistance: – $ 1.47
Net cost per day: $ 7.03
Non-subsidized private daycare space
Gross cost per day: $ 35
Tax credit for childcare expenses: – $ 21
Federal assistance: – $ 4.97
Net cost: $ 9.03
Difference with CPE per day: $ 2
Non-subsidized private daycare space
Gross cost per day: $ 50
Tax credit for childcare expenses: – $ 22.96
Federal assistance: – $ 4.97
Net cost: $ 22.07
Difference with CPE per day: $ 15.04
Non-subsidized private daycare space
Gross cost per day: $ 70
Tax credit for childcare expenses: – $ 22.96
Federal assistance: – $ 4.97
Net cost: $ 42.07
Difference with CPE per day: $ 35.04
Source: Ministry of Finance calculation tool