January 15, 2015

Speech at the parliamentary committee concerning Bill 27

Corps

Mr. Chair,

Madam Minister,

Members of the Committee on Citizen Relations,

Introduction

Thank you for your invitation.

The purpose of Bill 27 is to optimize subsidized educational childcare services. This government program is intended for young families whose childcare needs fall into a wide variety of categories, but mainly according to the parents’ work schedules. It is precisely this diversity in family situations that creates the phenomenon called “ghost” spaces observed in childcare services.

Bill 27 aims to put a stop to this phenomenon because the result is that available spaces are underused and public funds are spent for a significant number of childcare days when the children are not there. The Québec Ombudsman understands and shares this desire. However, Bill 27 proposes solutions based primarily on penalties for childcare services and parents. From the outset, it seems to me that this approach is not conducive to really solving a problem that is complex.

It bears remembering that section 1 of the Educational Childcare Act   stipulates that one of the goals of the act is to foster the harmonious development of childcare services, taking into account the needs of parents, particularly their need to reconcile their parental and professional responsibilities.

A brief look at context

Allow me to begin with a few figures. Since passage of the Act respecting childcare centres and childcare services in 1997, demand for subsidized spaces has grown tremendously, with the number of reduced contribution spaces made available because of the program nearly tripling, from 75,500 (1997-1998) to 224,369 (September 30, 2013).  The program’s positive impact on child development and greater labour market participation by mothers was quick to be felt.

In terms of the children, a review of the work by UQAM researchers  highlights compelling findings concerning, among other things, beneficial effects, particularly for children from underprivileged backgrounds, and improved cognitive outcomes in correlation with childcare service quality and intensity.

As for the mothers, according to a study by Université de Sherbrooke’s Chair on taxation and public finances, the availability of reduced contribution spaces in Québec has been the catalyst that has enabled some 70,000 more mothers to enter the workforce.

The same study puts the net cost of the childcare subsidy issued by the Government of Québec in 2008 at slightly more than $1.6 billion. This net expenditure generated revenues of $2.4 billion divided between the Quebec and the federal governments. Sizeable gains for both jurisdictions.

Thus, in many ways, there are very positive outcomes associated with the introduction of this public childcare services program.

Nonetheless, in the context of sustained development of this program, the numbers also point to the extent of today’s childcare services transfer budget.  The authors of the Boisvert (December 2013)  and Robillard (November 2014) reports therefore tend towards a review of service funding and optimization of service management.

Parallel to consideration of cost, it warrants pointing out that 25,000 spaces will have to open up in order to meet demand. Childcare services is therefore a market in which the demand for reduced contribution spaces exceeds supply, notably for “atypical childcare.”

Here we are referring to part-time childcare or childcare outside usual hours.

Why are there “ghost” spaces?

Insofar as the demand for full-time reduced contribution spaces is not being met, part-time spaces are necessarily very limited, even nonexistent. This set of circumstances leaves parents who would take a part-time space no choice but to apply and pay for a full-time space, even if the allocated period exceeds or is not consistent with their needs. Hence the emergence of the “ghost” space phenomenon.

Here I am quoting the Boisvert Report, which specifies that CPEs do very well in terms of occupancy rates, which increased from 92.4% in 2001-2002 to nearly 97.8% in 2012-2013. However, during the same period, the attendance rate dropped from nearly 84% in 2001-2002 to 78%.   The occupancy rate (reserved places) therefore increased by some 5% while the attendance rate (number of spaces really occupied) decreased by roughly the same percentage.

In such a context, the solution proposed by Bill 27 is not, in the Québec Ombudsman’s opinion, an appropriate solution to a complex problem.

A vague bill 

The ultimate goal of Bill 27 is to curb the phenomenon of what are called “ghost” spaces. The intention is to free up spaces among those that are underused and, at the same time, obtain a better return on each dollar invested. However, the means put forward are ill-suited to the situation of parents and raise serious doubts as to their real impact on accessibility and budgets.

For one, the notion of “false or misleading information” is vague and is not defined anywhere in the bill, despite its being central to the new provisions. Under section 5 of the bill, the minister may bar a parent who has provided false or misleading information from having access to any reduced contribution childcare space for a period of three months.

The same section provides that a parent who allegedly provided such information may submit observations, but the bill says nothing about the parent’s burden of proof in such a situation.

The bill fails to provide any indication as the number of authorized, and therefore uncalculated, days of absence (vacation or sick days) even though this is an important piece of information in separating truth from fiction and in determining the childcare subsidy granted.

In terms of the penalties for CPEs that agree to have false information entered, section 9 of the bill provides for the creation of a fine of $250 to $1,000.

The litmus test – three typical situations

The day-to-day reality in childcare services is that cases such as the following create what are called “ghost” spaces because parents, couples and single parents alike, have no choice but to adjust to the system, when it should be the other way around:

- an infant is registered for September even though he will attend childcare starting in December only;

- a child whose parents have several weeks of summer vacation (notably teachers) “attends” childcare on paper even though she is not there during this period;

- same thing for a child with one parent who works part-time but who attends educational childcare only three days out of five.

What emerges from these various situations is that parents, given the penalties for atypical childcare periods, will often prefer to conform to traditional and full-time schedules rather than incur penalties or lose their space in subsidized day care.

The simulation of these three situations clearly shows that the system’s lack of flexibility makes it ill-suited to the needs of a great many parents. Please indulge me as I quote a few more figures. According to a survey by the Institut de la statistique du Québec,  46.7% of families say that they have an irregular schedule. Of this 46.7%, 30.4% have untraditional childcare arrangements because of their work or the fact that they attend school.

So, Bill 27 proposes a punitive answer to the problem of the system’s lack of adaptation to the reality of parents’ childcare needs that amounts to penalties for parents and childcare services alike.

It is paramount to understand that in a context in which reduced contribution spaces are scarce, parents adjust to the system. And they will continue to do so even if Bill 27 is passed into law in its current form. Hence the strong likelihood that the expected benefits of Bill 27 will be well below those predicted, if not negligible.

The solution lies elsewhere

Bill 27 is based on the principle that demand should be adjusted to supply and proposes penalties in an attempt to channel it. This seems counterproductive in a free-market economy, even if educational childcare spaces are subsidized.  It would make more sense to provide for mechanisms and requirements so that subsidized childcare services develop practices that enable them to fill underused spaces. This is why the Québec Ombudsman recommends that Bill  27 – Act respecting the optimization of subsidized educational childcare services– undergo substantial amendment  by removing the provisions that impose penalties on parents or subsidized childcare services or that refer to these provisions.

In this vein, I also recommend that the law currently in force be amended so that from now on, funding of subsidized childcare services (CPEs and other subsidized childcare services) be established on the basis of the real overall attendance rate.

The act should also oblige CPEs and other subsidized permit-holding childcare services to offer spaces partly available for occasional or part-time childcare, with a view to meeting atypical childcare needs.

The issuance of permits should be carried out based on applicants’ supply of such space categories, as the Educational Childcare Act currently allows.

Officially, the progressive creation, by 2021, of approximately 25,000 reduced contribution spaces places is still on the books, so I also recommend that funding mechanism requirements be established in response to parents’ demand for childcare delivered outside typical schedules.

Lastly, I feel that private day care centres that are currently unsubsidized must be allowed to apply to become subsidized, with the same requirements as to quality.  This recommendation was made in my 2012-2013 Annual Report and I am repeating it today because I am convinced that it is part of the solution to the problem of what have been called “ghost” spaces.