Crawl Across the Ocean

Monday, June 06, 2005

Child Care - Part 1 / aka A Post About Child Care That Isn't Really About Child Care

Somewhat fittingly, the Amazing Wonderdog has been expressing some concern for the well-being of Canadian children lately - not rescuing them from wells so much as posting about the Conservative party's policy on the Child Care issue, and generating a lot of discussion in the process.

Since then I've been thinking about the child care issue, and as I've started and abandoned a few posts, I've come to realize that the question of what (if anything) the federal government should do in terms of setting up a national child care program (whatever that means) is a pretty interesting one and touches on some of the basic questions that always seem to come up when we talk about government programs in Canada: the division of powers and responsibilities between the provinces and the federal government, when it is appropriate for the government to intervene in the economy, and how that intervention should be structured so as to be fair, efficient and effective.

I'm not feeling overly ambitious at the moment so in this post I'm just going to tackle the first question - what role the federal government should play. I've broken the decision into three parts: legal, practical and theoretical.

From a legal perspective, the division of powers between the provinces and the federal government is set out in the British North America act of 1867. As the act states,
"It shall be lawful for the Queen, by and with the Advice and Consent of the Senate and House of Commons, to make Laws for the Peace, Order, and good Government of Canada, in relation to all Matters not coming within the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces" (emphasis added)
, so anything not specifically listed as provincial falls under the purview of the feds. Here is the list of items specifically allocated to the provinces:

1. The Amendment from Time to Time, notwithstanding anything in this Act, of the Constitution of the Province, except as regards the Office of Lieutenant Governor.
2. Direct Taxation within the Province in order to the raising of a Revenue for Provincial Purposes.
3. The borrowing of Money on the sole Credit of the Province.
4. The Establishment and Tenure of Provincial Offices and the Appointment and Payment of Provincial Officers.
5. The Management and Sale of the Public Lands belonging to the Province and of the Timber and Wood thereon.
6. The Establishment, Maintenance, and Management of Public and Reformatory Prisons in and for the Province.
7. The Establishment, Maintenance, and Management of Hospitals, Asylums, Charities, and Eleemosynary Institutions in and for the Province, other than Marine Hospitals.
8. Municipal Institutions in the Province.
9. Shop, Saloon, Tavern, Auctioneer, and other Licences in order to the raising of a Revenue for Provincial, Local, or Municipal Purposes.
10. Local Works and Undertakings other than such as are of the following Classes,;
* a. Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province:
* b. Lines of Steam Ships between the Province and any British or Foreign Country:
* c. Such Works as, although wholly situate within the Province, are before or after their Execution declared by the Parliament of Canada to be for the general Advantage of Canada or for the Advantage of Two or more of the Provinces.
11. The Incorporation of Companies with Provincial Objects.
12. The Solemnization of Marriage in the Province.
13. Property and Civil Rights in the Province.
14. The Administration of Justice in the Province, including the Constitution, Maintenance, and Organization of Provincial Courts, both of Civil and of Criminal Jurisdiction, and including Procedure in Civil Matters in those Courts.
15. The Imposition of Punishment by Fine, Penalty, or Imprisonment for enforcing any Law of the Province made in relation to any Matter coming within any of the Classes of Subjects enumerated in this Section.
16. Generally all Matters of a merely local or private Nature in the Province.

additionally, section 93 assigns education to the provinces,
"Section 93: Legislation respecting Education

In and for each Province the Legislature may exclusively make Laws in relation to Education..."

Personally, I'd say that I don't see anything mentioning child care in the list of provincial responsibilities so it should be under federal jurisdiction. But that's why you wouldn't want me as your constitutional (or any kind of) lawyer. The truth is, my legal opinion is worthless. It is widely accepted that child care is a provincial responsibility and indeed, as of this moment, provinces are responsible for administering all child care programs, the same as they do with primary education. I don't know if that's based on convention or legal precedent or just federal-provincial negotiations, or if child care falls under education or local matters or what but none of that matters because everything I read just seems to take it as given that it is a provincial matter.

So on legal issues, the scores is provinces 1, feds 0.

Supporters of child care will likely say to this, 'that's all very well, but how does this do anything to help children? The federal government has money to spend and if it can be convinced to spend it on improving children's lives then that is a good thing, and why would you put some musty old document written in 1867 ahead of the health and welfare of Canadian children living in the here and now'.

I imagine that child care advocates see this less as a legal question and more as a fundraising campaign, in which any possible sources should be tapped and the biggest potential tappee is the federal government. As this study for the Canadian Council on Social Development states,
"Child care and education are both under provincial jurisdiction for the most part, but most provincial governments have been unwilling or unable to put forward the funds necessary for universal preschool programs. The federal government has more access to tax resources and a mandate to develop the framework of national social programs if the provinces and territories agree. Since good quality early learning and care services are expensive to provide, sharing the burden of funding among federal, provincial and territorial governments makes good political sense, even if economists want to emphasize that there is, ultimately, only one taxpayer for all jurisdictions."

True, they could focus their efforts on provincial governments since they are the ones who currently have jurisdiction over and spend money non child care, but you can be sure they are *already* doing that, while working on the federal government as well.

On the pragmatic, more money for kids angle, I'd estimate the score is Feds 3, Provinces 1.

That leaves the theoretical argument. Presumably, the architects of the BNA Act put the powers where they did for a reason. Part of that may have been negotiations, but I figure a lot of it was that they just put things where they seemed to logically fit.

Generally speaking, there are a number of reasons why some government function would logically be undertaken at a federal rather than provincial level. One potential reason is standardization. For example it makes sense for the federal government to be responsible for those items where having different standards/jurisdiction in different areas would lead to unacceptably high transaction costs. For example, coins, weights and measures, and to a lesser extent the post and railways. Another possible reason is economies of scale. If some government function required multi-billion dollar investments than it might be more efficient if the federal government managed it. But the provinces seem to be doing a decent job with providing electricity (their problems aren't scale related anyway) and that's about as capital intensive as it gets, so I don't see economies of scale as a big issue in most files.

Another justification for centralizing is maintaining performance standards and avoiding falling into collective action problems. For example, some provinces might try cutting services on something (health care perhaps) in order to be able to cut taxes lower than a neighbouring jurisdiction and thus lure people to come from one province to another. This might provoke retaliation leading to a vicious cycle of tax and service cuts. In this instance the federal government would have a role in ensuring that provinces meet basic standards and don't try too cut corners to gain an advantage on their provincial rivals.

Finally, many issues which involved dealing with external countries are dealt with federally so as to provide a common front both for the sake of efficiency and to avoid harmful competition amongst provinces in external dealings and also to have a greater influence through the concentration of resources into a single strong voice (imagine if each province had tried to negotiate trade deals with the U.S. on their own and you get a sense of why external issues should be done by the federal government).

So what about child care? Personally I don't see any good economic reason why the federal government needs to be involved. There are no real economies of scale to speak of (maybe a few organizational ones but these are pretty minor), there are no dealing with external countries, and I feel that the willingness of provinces to cut back on child care(or unwillingness to expand child care) due to fear of losing tax competitiveness with other provinces is fairly minor, and I don't see large transaction costs from having different child care systems in different provinces.

Perhaps at most, you could make an economic case that the federal government needs to have a minor role in providing funding and enforcing a basic national standard of care availability but even that seems like a bit of a stretch.

I'd score the theoretical issues: provinces 2 feds 1.

So where does that leave us?

Well, my oh-so-scientific scoreboard puts it at 4-4. And I'm certainly sympathetic to the argument that the most important thing is to get more money to help kids get better care as soon as possible and the most likely way for that to happen is through a federal program. But on the other hand, given the absence of a compelling legal or logical rationales for federal involvement, I feel that the best long term solution is for the provinces to retain exclusive jurisdiction over child care. Mixing two different levels of government will lead to excess bureaucracy and inefficiencies in co-ordination, battles for turf as well as a loss of accountability.

This is not just an abstract concern. During a recent stint working for the B.C. government I happened to be working on a fairly large scale project which (potentially) was receiving funds from the federal government. You would not believe (especially if you've never worked in government) the amount of paperwork, delay, extra effort and headaches caused by trying to integrate the federal funding with the provincial effort.

Not to mention that significant change at the provincial level is likely to not occur as long as there is the promise of the federal government potentially riding in with piles of money.

As discouraging as the prospect of relying solely on lobbying the 10 provincial governments individually may seem, I think that this is the best long term approach.

So, leaving aside the issue of jurisdiction, the next question is what is the best policy/program for the government to implement with regards to child care? But I think this post is long enough, so I'll leave that for another day.

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  • excellent analysis. I'm not sure I agree with all of your arguments, but I do with your conclusion.

    By Blogger Candace, at 2:58 PM  

  • Thanks - I'm not sure you'll agree with the conclusion of my next post on child care - but you might since I haven't decided what it is for sure yet.

    By Blogger Declan, at 11:50 PM  

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