Crawl Across the Ocean

Thursday, December 08, 2005

Child Care and Bingo Subsidies

In an earlier post, I explained why I thought the best thing for the
federal government to do on the child care front was to leave it in the hands of the provinces to deal with. So I have to say that I appreciate the Conservative commitment to not having a federal child care program.

However, I should mention that, while the Conservative party has no child care plan, they do have an economic incentive program which they are calling a child care program (somewhat brazenly, given that it is no more a child care program than increasing the Old Age Security payment would be a bingo industry subsidy program).

I'm no econometrician, but I'm guessing that if you walked up to any family on the street and gave them $1,200, the percentage of that $1,200 they spent on child care would be pretty small (probably in line with child care spending as a percent of total spending for families, whatever that is (if I had to guess I'd say 10-15%).

But since the Conservatives are calling it a child care plan, and since some credulous people are treating it as if it is one, I might as well talk a bit about their economic incentive program. Alas, it is not nearly as well thought out as their (nonexistant) child-care plan. Anyway, the plan is to provide families with an incentive to have children (in particular, young children). They will do this by giving families $1,200 ever year for every child under 6 that they have, a plan which is estimated to cost just shy of $2 billion / year.

Because the $1,200 will be taxed at the rate of the lower income earner in couples, there is an additional incentive for families to have one parent (likely the mother, in most cases) stay home with the kids. For example, a family with one person earning $120,000 and one person earning $0 will get $1,200 while a family with two people earning $60,000 will probably get around $750 or so (consult a tax economist for exact details).

Alert readers who have been exposed to lots of right-wing arguments might protest that 'I thought Conservatives hated this kind of blatant social engineering?' but they should be assured that while conservatives are indeed opposed to social engineering, social reverse-engineering is AOK.

I guess if you are concerned about who is going to pay for your retirement or you are one of those Conservatives who lays awake at night worrying about how the Western world is losing the demographic battle vs. the unwashed hordes and is doomed then a baby bonus could be considered a logical idea, but calling it a child care plan seems a little phony. If you think we should have a baby bonus call it a baby bonus and defend the need for it. Personally, given Canada's continued poor record on child poverty and growing inequality, I'd rather see the money go to an increased Child Tax Benefit which would do more to help the children who really need it.

But enough about the Conservatives, the other major parties have all committed to an actual child care plan which provides money specifically for providing care for children1. So if we accept, for the sake of argument, that we want the federal government to have a child care program, what form should it take and how large a financial commitment should it be?

To Be Continued2...

1 To be fair, the Conservatives do have an actual child care component to their policy: a plan to give a $10,000 tax credit to any organization creating a new child care position, up to a maximum of $250 million / year.

The Conservatives claim that "This program will create 25,000 new spaces per year" proving that they know how to a) divide and b) exaggerate. Presumably some people will have been planning to create spaces anyway, but, greedy buggers that they are, will claim the $10,000 credit anyway. So not all the new spaces will be created by the tax credit plan. Plus, my gut tells me that creating new child care spaces costs a fair bit more than $10,000 so really they should only claim credit for the portion of the new spaces they fund. Plus, the language of creating new spaces may be interpreted by some people as implying a commitment to ongoing funding of those spaces (for example, if the province says it is creating a new medical school, they generally don't just mean they are providing a tax credit to someone willing to put up a building to house a medical school, it means there will be a program which will be funded year in and year out) - but the Conservative plan is just a one-time deal. Finally, it's entirely possible that there won't be enough new spaces to use up the full $250 million.

Still, it is money targeted towards organized, out of the home child care facilities, which just goes to show that either this refund plan is an unfair subsidy of people who don't take care of their own kids and involves the government denying choice to people, or, more likely, that even the Conservatives don't buy their own rhetoric about how child care programs which provide more funding to people who put their kids in day care vs. those who take care of their own kids (i.e. just about all the child care programs in existence) are discriminatory and deny parents choices and mean that government is telling people how to raise their kids.

2I'm always hearing that my posts are too long - so this is what you get - bloggus interruptus.


  • bingo subsidy is the greatest phrase ive heard in ages.

    By Blogger ainge lotusland, at 2:04 AM  

  • "I'm guessing that if you walked up to any family on the street and gave them $1,200, the percentage of that $1,200 they spent on child care would be pretty small..."

    Which presumably reflects the importance that family places on 'child care' - however defined - relative to their other spending priorities. My experience with my family indicates that most (but by no means all) expenditures end up benefitting the kids to a greater or lesser degree, whether we spend on new books, a computer, clothes, or even on new snow tires. If the family in question ends up spending less than you might like them to on "regulated day care", or less than you think is appropriate, I guess we have to ask whose judgement should prevail, and who is in a better position to judge in the first place.

    By Blogger deaner, at 10:50 AM  

  • Sure Dean - but my point was merely that it's not a child care program. The amount of an increased OAS supplement (or a tax free pension amount) that seniors will spend on bingo is a reflection of the importance *each senior* places on bingo, but that doesn't mean that increasing the OAS supplement is a bingo subsidy program.

    Sure families could spend the $1,200 on fixing the roof and kids are better off with a non-leaky roof over their heads, but that's still not what people mean when they talk about child care programs.

    By Blogger Declan, at 11:38 AM  

  • If a family is ALREADY spending on childcare and then uses the $1,200 for something else, what does it matter?

    You must not have children, because no way in hell is an extra $1200/year going to be an incentive to have another one. ROFLMAO

    By Blogger Candace, at 12:22 PM  

  • " point was merely that it's not a child care program."

    Sure - I realize that that was your point, but it seems to me to largely irrelevant; about like discussing whether Martin's tie should match the Liberal Red on his campaign signs. Building (or encouraging others to build) facilities intended to be used for regulated daycare is not a "child care plan" for me if I can't get my child registered, or if I choose informal care. Health care is equally not "health care" if I die on a waiting list, or if I am forced by intolerable pain (or an unbearable surplus of wealth) to seek treatment in another country. Banning handguns isn't really a "ban" when it amounts to making currently illegal weapons "doubly illegal" and exempting all weapons currently exempted.

    Big deal. Politicians (like advertisers) are always trying to dress up halibut-and-shells as Krab and engaging in worthless hyperbole, like 'fixing health care for a generation.' Instead of making decisions on the basis of battling sound bites, with one party claiming "health care" and the other "wellness security" why don't we concentrate on substance? I am not trying to be overly critical - your point is well taken; I just think it is entirely trivial.

    "...but that's still not what people mean when they talk about child care programs."

    Then "people" are being eqally disingenious, aren't they? What they really mean is "provision of services that I deem appropriate for your children, if you can get them in, if there is a centre conveniently located for you, and if that centre runs on hours that fit your schedule" programs. Tough to fit on a bumper sticker, I admit - but if we are being sticklers for accuracy and honesty, it's not too much to ask, is it?

    By Blogger deaner, at 1:59 PM  

  • "If a family is ALREADY spending on childcare and then uses the $1,200 for something else, what does it matter?"

    It doesn't matter, it's just not a child care program, it's a tax cut/rebate.

    Dean - I don't think it's a trivial point that the Conservatives are announcing ~$11 billion in child care spending when very little of that money is actually for what people consider government funding of child care. I think a lot of people will be will be misled and I think that if the media is confused, than I suspect many others are as well.

    And I do think that there is a fairly commonly held view that when people talk about govenrment child care spending, what they are referring to is money provided by government for the express purpose of taking care of children. I guess I could be wrong, but I think I'm on pretty solid ground there.

    I'm not saying that the money has to bespent on regulated government places for it count as child care, B.C.'s program provides fnding to everyone, even parents looking after their own kids, but the program is designed as much as possible with the intent that people have to actually spend the subsidy money on child care to get the subsidy.

    I get what you're saying, and there is a certain amount of grey area which I didn't acknowledge in my post, but I still think the Conservative plan is too far away from ensuring money goes to care of children for it to be treated as a child care plan, as oppseod to some sort of economic incentive plan.

    By Blogger Declan, at 5:14 PM  

  • Declan - for the record, I don't mind long posts; sometimes lots of thinking requires lots of room.
    We now return you to your regularly-scheduled programming....

    "...I still think the Conservative plan is too far away from ensuring money goes to care of children for it to be treated as a child care plan..."

    I await your analysis of the safeguards the Liberals have built in to their child care "plan" to ensure that the money goes to care of children, rather than to -say- increased wages for daycare workers, increased construction and equipment costs, or reduced capital and operating contributions by those who provide daycare as an ancilliary to their primary function. Alternatively, you could begin to call it the "child in daycare and regulated daycare provider incentive" plan. Granted, that seems to be picking nits; Mr Pot, please meet Mr Kettle.

    The spending in the Liberal "child care plan" will fund, at best a quarter to a third of the actual cost of childcare for all eligible children, even if there is no crowding out and no substitution effects as alluded to above. I suppose if you wanted to refer to it as the "some children cared for and others left to pound sand" plan, at least you would be evenhanded about it.

    In the further alternative, we could worry less about what the programs are called, and more about how they will work and how they will affect Canadians. What a thought - discussing issues, instead of labels!

    By Blogger deaner, at 1:35 PM  

  • "... no way in hell is an extra $1200/year going to be an incentive..."

    Economic decisions are made at the margin, Candace. Presumably there is at least one family that are considering having children (or another child) who feel that they are "not quite" able to afford it.

    Quite aside from that, Declan is right; even an ineffective incentive is still an incentive...

    By Blogger deaner, at 4:05 PM  

  • Well I think there's a difference between money going to child care providers and money going towards the purchase of big screen TV's, but I'll certainly consider where the money is likely to go when I get to the Liberal plan. But I'll probably find something new to make fun of about the Liberal plan, since I don't think that the targeting of the money will be the key weakness in that particular plan (which I thought it was in the Conservative plan - I know, you think it's a trivial naming concern but I think that it was significant, anyways...)

    Of course, figuring out what the Liberal plan actually entails will likely be the toughest part, besides finding time to write the post - the rest of the month looks pretty grim, time-wise. I'll keep your comment about post length in mind but the long posts may have to wait until January!

    By Blogger Declan, at 9:54 PM  

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