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Part 2: 
Creating Jobs and Growth

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Chapter 3:
New Opportunities for Canadians

In planning for Canada’s economic recovery, the government’s first order of business is to heal the specific wounds of the COVID-19 recession.

The impact has been even more uneven than previous recessions. Some sectors, many large businesses, and many wealthier Canadians have done quite well. They have managed to keep working during the pandemic, have absorbed the customers from locked-down small business competitors, and have seen their homes and other assets grow in value.

The COVID-19 recession has had its worst impact on many of the most vulnerable people in Canada—primarily low-wage workers, young people, racialized workers, and women. It has affected businesses that disproportionately employ these people.

Chart 3.1
Change in the Unemployment Rate, by Age and Sex, February 2020 to March 2021
Chart 3.1: Change in the    Unemployment Rate, by Age and Sex, February 2020 to March 2021

Source: Statistics Canada.

Text version
  percentage points
  Males Females
  15 to 24 25 to 54 55 to 64 15 to 24 25 to 54 55 to 64
Feb 2020 to Mar 2021 2.3 1.6 1.4 4.8 1.7 1.0

Today, about 296,000 people are still out of work, and 247,000 are facing sharply reduced work hours, and with that reduced wages, and reduced access to opportunities.

The labour market is a long way from recovery, with employment still well below pre-COVID levels. Low-wage workers, young people and women have borne the brunt of jobs losses.

Bank of Canada, March 10, 2021

Lessons from recessions of the past make it clear that a recovery that focuses on GDP alone is one that risks leaving people behind.

The government’s COVID-19 recovery plan puts people first. It is targeted at the groups that have been most affected, to make sure they are part of our recovery. It does so by making higher education more affordable and reducing the burden of student debt for more Canadians in need. It does so by improving conditions for workers struggling to make ends meet—or those trying to rejoin the workforce after a difficult time. It is about supporting the middle class and helping more people join the middle class.

In the 2020 Speech from the Throne, the Government of Canada launched a campaign to create over one million jobs, restoring employment to pre-pandemic levels including through historic investments in training that will skill up workers.

Budget 2021 will create almost 500,000 new job and training opportunities for workers over coming years—including  215,000 new opportunities for youth.

Most importantly, Budget 2021 makes a generational investment in a Canada-wide system of affordable child care.

3.1 Women in the Economy

COVID-19 has affected all Canadians, but women have been disproportionately affected.

In the labour market, women were hit earlier and harder, and their jobs continue to recover more slowly.

The closure of schools and child care centres has exacerbated work-life balance challenges for women as they have overwhelmingly borne the burdens of unpaid care work. This has made it more difficult for some women to work full time, for some to work at all, and for many women it has worsened their mental health.

For far too long, the work women do, paid and unpaid, has been systematically devalued by our economy and by our society. Long-standing gender inequities have only been amplified over the course of the pandemic—and it has put decades of hard-fought gains for women in the workplace at risk. Today, more than 16,000 women have dropped out of the labour force completely, while the male labour force has grown by 91,000. This is a she-cession.

Budget 2021 lays out an expansive jobs and growth plan that is very much a feminist plan. It seeks to build a recovery that gives all women in Canada the ability to fully participate in our economy.

The government recognizes the many different lived experiences of women—experiences shaped by racial identity, income level, disabilities, geography, and more. Budget 2021 seeks to build a recovery that acknowledges that many women start from a position of disadvantage in the workforce, in the demands placed upon them in the care economy, in their access to resources and capital as entrepreneurs, in their access to health care, and in the threat of violence they disproportionately face.

In March, the Government of Canada created a Task Force on Women in the Economy to help guide a robust, inclusive, and feminist recovery and to help address long-standing systemic barriers. Composed of a diverse group of experts and leading voices, the task force has begun advising the government on policies and measures to support women’s employment and address issues of gender equality in the wake of the pandemic. In particular, the task force has provided advice on early learning and child care, support for youth, and women who work in low-wage jobs. The members provide feedback with an intersectional lens that is instrumental in this budget and will continue to provide advice on the path forward.

The work of creating a more inclusive, sustainable, feminist, and resilient economy that values women’s work will take time. The government will continue its progress to build a feminist, intersectional Action Plan for Women in the Economy that will work to push past systemic barriers and inequities, for good. This will create an economy that works for everyone and build a stronger middle class.

A Canada-wide Early Learning and Child Care Plan

More than 50 years ago, the Royal Commission on the Status of Women in Canada called on the federal government to immediately begin working with provinces and territories to establish a national daycare plan. Generations of Canadians have waited for their government to answer this call.

The pandemic has made access to early learning and child care a universal issue that is resonating across sectors, regions, and income brackets. School and child care centre closures have been difficult for parents. Some have had to leave their jobs, or reduce their hours significantly. Without access to child care, parents cannot fully participate in our economy.  

This is an economic issue as much as it is a social issue. Child care is essential social infrastructure. It is the care work that is the backbone of our economy. Just as roads and transit support our economic growth, so too does child care.

Investing in early learning and child care offers a jobs-and-growth hat trick: it provides jobs for workers, the majority of whom are women; it enables parents, particularly mothers, to reach their full economic potential; and it creates a generation of engaged and well prepared young learners.

Studies by Canadians Dr. Fraser Mustard and the Honourable Margaret McCain have shown that early learning is at least as important to lifelong development as elementary, secondary, and post-secondary education—it improves graduation rates, promotes lifelong well-being, boosts lifetime earnings, and increases social equity.

Figure 3.1
Benefits of Early Learning and Child Care for Children
Figure 3.1: Benefits of Early Learning and Child Care for Children

Source: Barnett, 1992; Jenkins, Boivin, Akbari, 2015 (as summarized in Honourable Margaret Norrie McCain (2020), Early Years Study 4: Thriving Kids, Thriving Society.)

Text version

Children who regularly participate in early childhood education programs:

  • Have higher graduation rates
  • Make better decisions
  • Improve work habits and grades
  • Make gains in reading and math
  • Are excited about learning
  • Develop strong social skills

Yet, early learning and child care can be more expensive than university tuition in some cities—something families have decades longer to save up for. The pandemic has shifted the public understanding of how access to child care supports children, their families, and our economy. The clear benefits of early learning and child care should not be a luxury for only the Canadian families that can afford it. Lack of access is not a choice, nor are unaffordable fees. The current system is leaving too many children and families behind, particularly low-income and racialized families. Every child deserves a fair start.

The high cost of child care—in some urban centres fees for one child can be as much as rent or mortgage payments—is a tax on a segment of the population that Canada requires to drive economic growth. Young families are juggling sky high housing costs, the increasing cost of living, expected to save up for their retirements, while managing child care fees.

Chart 3.2
Median Toddler Fees in 2020 (gross, monthly)
Chart 3.2: Median Toddler Fees in 2020 (gross, monthly)

Note: These data represent gross child care fees and do not include reductions from means-tested child care subsidies or tax-based supports.

Source: Canadian Centre for Policy Alternatives (2021).

Text version
City Median toddler fees in 2020 (monthly)
Toronto 1,578
Richmond Hill 1,327
Richmond 1,300
Markham 1,300
Mississauga 1,284
Oakville 1,280
Brampton 1,269
Calgary 1,250
Vaughan 1,250
Iqaluit 1,215
London 1,191
Vancouver 1,165
Kitchener 1,149
Ottawa 1,140
Surrey 1,050
Hamilton 1,027
Burnaby 1,000
Yellowknife 990
Edmonton 950
Kelowna 925
Lethbridge 900
Windsor 868
Halifax 853
Whitehorse 850
Saskatoon 810
Saint John 716
Moncton 716
Fredericton 716
St. John`s 716
Regina 675
Charlottetown 608
Winnipeg 451
Gatineau 181
Québec City 181
Montréal 181

The very best example of the economic power of an affordable, well-run early learning and child care system is Quebec. At the time the Québec Educational Childcare Act was instituted in 1997, women’s labour force participation rate in Quebec was four percentage points lower than the rest of Canada. Today it is four points higher. And Quebec women with children under three have some of the highest employment rates in the world. Furthermore, studies show that child care alone has raised Quebec’s GDP by 1.7 per cent.

Furthermore, TD Economics has pointed to a range of studies that have shown that for every dollar spent on early childhood education, the broader economy receives between $1.50 and $2.80 in return.

Beyond the simple economic facts, it is also a question about the kind of Canada we want. Early learning and child care represents a chance for the country to offer each and every child the best start in life. It represents an equalizer, a way to build communities, a bold feminist policy, and the most effective step we can take to support our economy in the short, medium and long term. It is about making sure that everyone has the same access to opportunities, even from their youngest age.  

It is time for the rest of Canada to learn from Quebec’s example. A Canada-wide early learning and child care plan is a plan to drive economic growth, a plan to secure women’s place in the workforce, and a plan to give every Canadian child the same head start. It is a plan to build an economy that is more productive, more competitive, and more dynamic. It is a plan to grow the middle class and help people working hard to join it.

Figure 3.2
The Dividends of Investing in Early Learning and Child Care
Figure 3.2: The  Dividends of Investing in Early Learning and Child Care
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Improves long-term social and economic outcomes

Access to high-quality child care is a fundamental element of children's future academic success, and promotes greater gender equality in the labour market, including by improving and growing the female-dominated early childhood educator workforce.

Increases labour force participation rate of women

If women in the rest of Canada participated at the same level as Quebec, where low-fee child care has been available since 1997, it would add approximately 240,000 workers to the labour force in today's terms.

Boosts economic growth

More workers in the labour force would drive an increase in real per capita GDP in the long run of as much as 1.2 per cent.

Establishing a Canada-Wide Early Learning and Child Care System

The federal government will work with provincial, territorial, and Indigenous partners to build a Canada-wide, community-based system of quality child care. This will be a transformative project on a scale with the work of previous generations of Canadians, who built a public school system and public health care. This is a legacy investment for today’s children who will not only benefit from, but also inherit this system.

Just as public school provides children with quality education in their neighbourhoods, the government’s goal is to ensure that all families have access to high-quality, affordable and flexible early learning and child care no matter where they live. The government will also ensure that families in Canada are no longer burdened by high child care costs—with the goal of bringing fees for regulated child care down to $10 per day on average within the next five years. By the end of 2022, the government is aiming to achieve a 50 per cent reduction in average fees for regulated early learning and child care to make it more affordable for families. These targets would apply everywhere outside of Quebec, where prices are already affordable through its well-established system.

To support this vision, Budget 2021 proposes new investments totaling up to $30 billion over the next 5 years, and $8.3 billion ongoing for Early Learning and Child Care and Indigenous Early Learning and Child Care, as outlined below.

The government’s plan ensures that gains are secured for generations to come by making this historic commitment a lasting one, while also recognizing that building the quality system we want will take time.

Combined with previous investments announced since 2015, a minimum of $9.2 billion per year ongoing will be invested in child care, including Indigenous Early Learning and Child Care, starting in 2025-26.

Chart 3.3
A Historic, Permanent Federal Financial Commitment to Early Learning and Child Care
Chart 3.3: A Historic, Permanent Federal Financial Commitment to Early Learning    and Child Care
Text version
  $ Billions
  Previous Investments since 2015 Budget 2021 Investments Total Investments
2018-19 0.5 0.5
2019-20 0.5 0.5
2020-21 1.3 1.3
2021-22 1.1 3.1 4.1
2022-23 0.7 4.9 5.6
2023-24 0.8 6.2 7.0
2024-25 0.8 7.2 8.0
2025-26 0.8 8.4 9.2

This once-in-a-generation transformation will take time and hard work from all orders of government—and that is why the next five years are focused on meaningful goals for families and setting the right foundations for success.