Thank you, Mr. Chair.
Thank you very much for the invitation to bear witness to this remarkably hardworking and august committee.
Yesterday, the Bank of Canada told us that the worst could soon be over for the economy, but the pace of rebound is truly far from certain. For Canadian workers, recovery can’t come soon enough.
Last month's labour force survey saw Statistics Canada declare that “In April, more than one-third...of the potential labour force did not work or worked less than half...their usual hours”. Tomorrow's update is likely to show more of a “he-covery” than a “she-covery”, that is, more men returning to work than women. That is deeply problematic for us all because of the role of households in the potential for the future economy. That is because household spending accounted for over 56% of GDP before the pandemic hit. It has been a growing driver of GDP now for years because of falling business investment and stuttering exports.
Household purchasing power has been propelling the Canadian economy, and women's incomes are critical to maintaining the strength of household purchasing power, particularly in the post-pandemic period. It is unclear how many workers deemed non-essential during the shutdown will find their way back to being rehired because so many of those workers who lost their jobs were women.
Without question, the limiting factor for women's return to work is child care. To put it most simply, there will be no recovery without a she-covery, and there will be no she-covery without child care.
The acceleration of shovel-ready infrastructure projects will certainly help speed recovery, but it is mathematically impossible for growth in primarily male-dominated construction and repair jobs to offset the number of jobs lost by women in the services sector. Furthermore, repairing critical physical infrastructure will do nothing to prevent the loss of critical social infrastructure, which is exactly what we are poised to do.
User fees for child care represent the second-biggest cost for young families, second only to housing expenditures. Many families who lost incomes forfeited their spots in child care facilities because of the high cost of simply holding that space. A lot of child care centres will be affected, and child care costs will undoubtedly rise even further because of the new requirements for physical distancing, dramatically increasing staff-to-child ratios and adding new fixed costs for PPE, cleaning and more space.
We do not know what share of our ecosystem of child care will shutter in the wake of the pandemic. In the U.S., it's estimated that 50% of its child care spaces are at risk. That's 4.5 million spaces. Just to maintain what they have would require an additional $9.6 billion a month. A bill is going forward right now to prevent further loss of that infrastructure. Of course, the fewer spaces that exist, the less ability there is for women to return to work even when they have a job.
The irony that is not lost on me—and I hope it won't be lost on you—is that subsidized child care literally pays for itself. A study by noted Quebec economist Pierre Fortin and his colleagues has shown that “in 2008 each $100 of daycare subsidy paid out by the Quebec government generated a return of $104 for itself and a windfall of $43 for the federal government”, which didn't put one thin dime into the program.
But there's more—the K-Tel version. Child care can play a threefold role in recovery. Beyond simply facilitating women's return to work and being a source of employment, there is the decision to ensure that child care is not just a holding tank so mommy can work, but actually affordable, high-quality, early-learning, accessible programming for all families. If that's the approach that we take with child care, we will maximize the future of the next generation of Canadian children. We will lower public spending, and we will increase revenues for governments and society. Now we may choose to act, or we may choose not to act, but whatever we do, we will reap what decision we sow now.
U.S. data shows that there's a return on investment of between $4 and $8.75 on every single dollar invested in high-quality early learning, particularly in neighbourhoods where children are more at risk of entering school without being learning-ready. Of course, the impact does not end with preschoolers.
Canadian data from our very own ESDC, Employment and Social Development Canada, shows that spending on Pathways to Education resulted in a net benefit to governments of over $2,000 through lower expenditures and higher revenues per student in the program, and over $5,000 for individual participants.
We would literally be leaving money on the table by not using this opportunity to improve our critical social infrastructure by investing in children and high-quality child care.
By rolling out an initiative that is national in nature, but accelerated in our biggest cities first, where we have the highest concentrations of children and poverty, we could maximize their potential and their future, and our potential and our future.
Getting everyone learning-ready and learning-supported as they grow up is a 21st century requirement. It's not just a nice thing to do because of population aging.
Since a shrinking working-age cohort will be asked to support growing numbers of people too old, too young and too sick to work, we really can't afford to discount any of the skills development of anybody. This means that higher quality early-learning child care should not be left to market forces to determine how much should be available, but rather be integrated with the education system because it is a public good that is undersupplied by the market at present.
Given the circumstances, I believe this requires a national approach and a strong federal role. I recognize this is a controversial position.
Why should the federal government play a role in child care, which falls constitutionally into provincial jurisdiction? The answers are multiple. It's because child care is just going to get more costly to operate safely in the post-pandemic world as a result of higher staff ratios, more PPE, more time spent on cleaning and on better staff; because provinces and cities are cash-strapped now, which is going to get worse; because the federal government provides funding already for health care and post-secondary education, so there's a precedent; and because, even if we don’t raise taxes to pay for better child care and more of it immediately due to post-pandemic pressures, debt by the federal government is the least risky and the lowest cost of any debt held by any economic agent in society, be it a household, a business, a municipal government or a provincial government. Everybody pays more for debt than the federal government does.
Now, I would be remiss not to mention the number of recent immigrants and migrant workers who have been made sicker and have even died because of the pandemic and because of our inadequate provisions for safe reopening. We need better protections for all workers.
Here I especially applaud the federal government's decision to advance the idea of 10 paid sick days, a worthy initiative that should have been in place long before the pandemic hit, but its absence can certainly not be excused now. Every jurisdiction should be clamouring to lead this parade for their workers, who are their voters; but the federal government could and should lead by example and do exactly what it has asked the provinces to do in its own jurisdiction.
Furthermore, the cautionary tale from the use of on-demand and temporary labour in long-term care facilities and delivery services should give everybody pause because the rise of the gig economy is looming on the horizon as employers and consumers look for cheaper, faster, on-demand labour, and workers have fewer paths back to their old jobs.
I urge the federal government to collect better data and monitor this phenomenon very closely, because we don't monitor at all. We don't even measure it well. It will affect everything from income support and skills development programs to public revenue and debt.
In closing, I want to say that the pandemic has revealed that the caring economy, by which I mean health care, elder care and child care, has been revealed to be the vital underpinning of the essential economy. Social infrastructure is as critical to the basic functioning of our lives and jobs as roads and bridges. As our long-term care facilities have shown, twinning care and profit as operational objectives is a risky business.
We need nationwide protocols for the safe reopening of child care. This will require skill testing, for sure, of federal-provincial-territorial cooperation. I don't underestimate the challenges of that, but we all know that a common goal is often easier to pursue when somebody else makes the money available.
Who is that somebody else? It is all of us as Canadians, together through our taxes. Without such shared undertaking, fewer women will return to work, and economic recovery will be further off for everyone, workers and businesses alike. Please, let’s not do this to ourselves.
Thank you for your time and consideration. I look forward to your questions.
