A propos of our discussion yesterday, Jeffrey Simpson writes about Harper's so-called day care policy in today's Globe And Mail. He might not say anything you haven't thought of before, but he sums up the situation nicely.
Call it many things, but not a 'child-care' policy

Like the other famous five promises of the Conservative government, the wrongly called "child-care" policy is good politics but lousy policy.

The Conservatives, you might recall, pledged to give all families $1,200 per child under 6. They called it the Choice in Child Care Allowance. The money, according to their campaign platform, "will let parents choose the child-care option that best suits their family's needs."

It will do nothing of the kind. Simple math shows why. The $1,200 is supposed to go to the lowest-income earner. Say that person earns $40,000. For simplicity's sake, suppose he or she pays tax such that of the $1,200, a $1,000 per child is left.

That would mean about $4 per day, per child. Now, you tell me: Where can anybody get child care for $4 per day? Statistics Canada recently reported that 54 per cent of children aged six months to five years were in some form of care in 2002-03. Government help of $4 a day won't do much for the majority.

How about people who care for children at home -- the ones the Conservatives are counting on the family- and faith-based social conservative groups to mobilize behind their plan? Even if the child is cared for at home, $4 a day is enough for milk, fruit and a sandwich for lunch. That's not child care by any commonly understood definition of the phrase.

Try another example. Suppose the income-earner is better-off and so pays at a higher marginal tax rate that drops the $1,200 per child to, say, $700 per child. Now you're talking about $2.80 a day.

It could be worse, too. The Conservatives' platform says the $1,200 will be "in addition to" existing child-care tax benefits. If the $1,200 is added to existing benefits, and then all are taxed, some people could really get hammered.

The excellent Caledon Institute reckons that a two-earner couple earning $36,000 -- just above the poverty line -- would see only $420 of the $1,200 because the couple would lose other social benefits.

That would work out to about $1.60 a day.

The mathematical details don't matter. They'll vary from family to family. The bottom line is that whatever the family size or income, this Conservative policy isn't a child-care policy -- either for those who care for children at home, or send them outside the home. The money is a joke either way.

Even worse, the money goes to upper-income people who don't need it. Yes, they'll pay tax at the marginal rate, but they'll be getting a cheque. So will the cleaning lady.

What we have in this Choice in Child Care Allowance is a modern equivalent in concept to the old, long-abandoned family allowances. These monthly cheques were sent by Ottawa to mothers -- the money went to the woman in the family -- and they proved politically very popular.

Who doesn't like to receive a cheque from government? Ralph Klein figured that out with his $400 "prosperity cheques" to Albertans.

The cheques were great politics, but lousy policy.

The Conservatives have figured out that jigging around with tax policy doesn't win votes, unless people can finger the money. Change tax brackets. Who understands that? Alter corporate tax rates. Who likes corporations anyway?

But give people a cheque. Now there's something they can put in their hands and spend. Cut the GST. That's something people will notice when they make purchases.

So this ballyhooed Choice in Child Care Allowance is part of a wider plan to produce tax changes that people will recognize, and for which they will subsequently be politically grateful.

You can argue either way what a child-care policy should be.

You can put extra money into constructing and providing state-subsidized places, as the Liberals had proposed and as the child-care lobby wants.

Or you can give individuals money and offer incentives for the construction of new spaces, trying to deal with both the supply and demand challenges, as the Conservatives propose.

But you cannot claim that $1.50-to-$4-a-day per child is a plan, or even part of a plan for something called child care. You can call it a smokescreen. You can dress it up, as Republicans would in the United States, as a gesture toward "family values." You can make the ideological case that it at least avoids state control.

You just can't call it serious child-care policy.
I think it would be just grand if this government fell on the day care issue. Of course, the Liberals don't have a leader yet. Not sure how that would work.

* * * *

I'm off to the AGO today, for a peek at the Frank Gehry exhibit, and coffee with a friend. I had dinner with a friend in Toronto last night. Such socializing gives me the odd impression I live here and have friends here! Go figure. More later.


James Redekop said...

You'll be right across from me! I work at the south end of Grange Park, south of the AGO. Drop me a line if you like. :)

laura k said...

Oh rats, I would have! I didn't see this til I came home. More soon. :)

Kyahgirl said...

maybe I'm naive, but wouldn't it be better to give really significant tax breaks to families who chose to have a person stay home and take care of the family so that it would be easier for them to make that choice?

The other part of the plan would entail giving childcare assistance to people who really need the money and don't have the option of staying home, really low income families or single parents.

People who make enough money don't need to be included. (I'm speaking as a comfortably paid working mother who choses to work and doesn't feel that childcare costs are a burden).

Mousky said...

I have a better idea: introduce a flat tax rate with a generous basic deduction that would remove most, if not all, low-income households from the income tax roll. No filling out forms. No credits for this and that. Put money in our pockets to do with it what we please. I'm sure I'll be flamed, but there is no reason to have a complex tax system.