Question Period Note: FEMALE LABOUR FORCE PARTICIPATION IN THE EARLY LEARNING AND CHILD CARE SYSTEM

A Fraser Institute report states that federal day-care program has resulted in little-to-no change in the female labour force participation rate or industry employment (news release)

• I am aware of the report from the Fraser Institute and would note that while early in its implementation, the Canada-wide system is delivering on making life more affordable for families.

• Over half of provinces and territories are delivering child care for an average of $10-a-day or less, with fees cut by 50% everywhere else.

• In 2023, labour market participation among core-aged mothers in Canada with young children reached a record high at 79.7%, up from 75.9% in 2019.

• That is an increase of 3.8 percentage points.

• Further, in January 2023, the Bank of Canada observed that the “rise in the participation rate of women could be due to lower average fees for child care since April 2022, as measured by the consumer price index.”

The Government of Canada made a transformative investment of over $27 billion over five years as part of Budget 2021 to build a Canada-wide early learning and child care (ELCC) system with provinces and territories (PTs), aiming to reduce fees to an average of $10-a-day by March 2026 and increasing the quality of ELCC through valuing the early childhood workforce and providing them with training opportunities. Budget 2021 outlined potential impacts of the investment, including the potential addition of 240,000 workers to the labour force and a potential 1.2% return on GDP in the long run.

On February 6, 2024, the Fraser Institute published a report examining the effects of the Canada-wide ELCC system on women’s labour force participation. The Fraser Institute’s main line of argumentation is that labour market participation for women has been virtually unchanged over the last few years. However, this analysis examined all women ages 15 or older, and not core-aged mothers of young children specifically, who saw a record-high labour force participation rate of 79.7% in 2023. At this time, however, there is little to no research proving to what extent the increase in the participation rate of core-aged mothers of young children has been driven by any particular factor.

Further to the above, the Fraser report states:

“More broadly, women’s labour force participation has risen in Canada and in the United States, reflecting factors besides childcare that induced women to join the labour force. These factors include the squeeze on household incomes from soaring inflation and employers maintaining some of the flexibility about working from home established during the pandemic—which is especially attractive to women with children.”

However, when examining the participation rate of mothers (aged 16 and over) with children under the age of 6 in the U.S., their rate has increased from 65.8% in 2020 to 67.9% in 2022. Meanwhile, the Canadian rate (core-aged mothers of children under 6) rose from 75.9% in 2020 to 79.0% in 2022, and to a further 79.7% in 2023—suggesting Canadian rates have potentially increased faster in recent years, suggesting a potential (though to date unconfirmed) linkage between the implementation of Canada’s affordable child care system and recent labour force participation rates.

The Bank of Canada’s January 2023 Monetary Policy Report noted that an already observed “rise in the participation rate of women could be due to lower average fees for child care since April 2022, as measured by the consumer price index. The decrease in the cost of child care stems from the early learning and child care agreements signed between the federal and provincial governments.”

The same report also notes that “the participation rate for prime-age women (25 to 54) stands near record highs. It increased from 83.6% in February 2020 to 84.9% in December 2022, and this increase has been notable for women with young children”.

The Federal Secretariat on ELCC is working to determine the feasibility of examining the degree to which the Canada-wide system has directly caused these changes in labour force participation. To date, no reliable research is known and/or available to confirm causality.

That said, data from Statistics Canada’s Labour Force Survey clearly demonstrates that labour force participation for core-aged women has increased in all provinces, as outlined in the table below.

Labour force participation rate
(%), women aged 25-54 years old 2019 2023 Change (percentage points)
Canada 83.8 85.5 +1.7
Newfoundland and Labrador 80.4 84.6 +4.2
Prince Edward Island 86.3 87.6 +1.3
Nova Scotia 85.5 85.9 +0.4
New Brunswick 84.9 85.5 +0.6
Quebec 87.0 88.7 +1.7
Ontario 82.2 84.7 +2.5
Manitoba 81.5 84.8 +3.3
Saskatchewan 84.2 84.6 +0.4
Alberta 83.1 83.8 +0.7
British Columbia 84.3 84.6 +0.3
Source: Labour Force Survey

Since not all women are mothers, in the context of the Canada-wide ELCC system, it is important to look at the labour force participation of core-aged women with young children as they are the demographic most directly affected by the Canada-wide ELCC system. As noted below, Labour Force Survey data demonstrates increases in labour force participation in most provinces for this cohort over the same period.

Labour force participation rate
(%), mothers (aged 25-54 years old) with young children 2019 2023 Change (percentage points)
Canada 75.9 79.7 +3.8
Newfoundland and Labrador 74.7 82.8 +8.1
Prince Edward Island 82.1 86.4 +4.3
Nova Scotia 77.4 80.1 +2.7
New Brunswick 81.4 80.7 -0.7
Quebec 82.2 85.3 +3.1
Ontario 73.3 78.7 +5.4
Manitoba 71.3 75 +3.7
Saskatchewan 77.1 76.3 -0.8
Alberta 71.4 75.7 +4.3
British Columbia 76.1 78.8 +2.7
Source: Labour Force Survey

The recruitment and retention of qualified ECEs is a long-standing challenge across Canada, which has been amplified by the COVID-19 pandemic, general labour force shortages, and recent high inflation. In 2023, the Labour Force Survey estimated the employment level among ECEs and Assistants as still below pre-pandemic (2019) levels, with nearly 15,000 fewer people, mostly women, working in this occupation compared to 2019. To address the persistent recruitment and retention challenges facing the ELCC sector, the federal government worked multilaterally with PTs to first identify the problems underpinning these challenges as well as potential outcomes. This work was presented to Federal, Provincial, and Territorial (FPT) Ministers Most Responsible for ELCC as a Conceptual Frame for a Multilateral ELCC Workforce Strategy. At the July 2023 meeting of FPT Ministers Most Responsible for ELCC, Ministers agreed to develop a Canada-wide, multilateral workforce strategy for the ELCC workforce under the pillars of recruitment, retention, and recognition.

Additionally, Ontario has committed to taking the lead on establishing a working group on inter-provincial and territorial mobility and foreign credential recognition for the early childhood education workforce to ensure seamless movement of qualified staff across Canada and from around the world.

Many of the challenges that PTs are facing in the development of an ECE workforce are shared and potentially exacerbated in an Indigenous context. In addition to navigating labour force shortages, needing to establish competitive wage grids and working to eliminate barriers to ECE education and training, Indigenous governments are having to develop culturally-appropriate training modules and build human capacity that is grounded in culture and can support linguistic revitalization interests. Flexible funding is available to support Indigenous-led workforce initiatives and it will be important to work in collaboration with Indigenous partners moving forward on these issues. For example, First Nations in BC and the Manitoba Métis Federation have implemented wage enhancement funds to better compensate and retain this valued workforce.

The Government of Canada provided $420 million in 2021-2022 for PTs to support the recruitment and retention of ECEs, in recognition of the workforce’s central role in providing high-quality ELCC.

All Canada-wide ELCC Agreements, with the exception of the asymmetrical agreement with Quebec, prioritize quality through the requirements of:
• developing and implementing evidence-based quality frameworks, standards, and tools for ELCC;
• increasing the percentage of certified child care workers; and,
• implementing wage grids or frameworks where not already in place.

Through the Canada-wide ELCC Agreements and workforce funding, many PTs have already announced new supports for ECEs in areas such as hiring, retention, training, and wages.

• The Fraser Institute released a report titled “Is the Federal Daycare Program Achieving Its Stated Goals?” on February 6, 2024.

• The report has attracted media attention (Fraser Institute News Release: Federal day-care program has resulted in little-to-no change in the female labour force participation rate or industry employment | Financial Post).

• The author has been quoted in the media report stating, “the federal government initiative to expand subsidized daycare and raise the labour force participation rate of women has produced few results, nor has the roll-out of daycare expanded employment in the industry”.

• The data referenced by the Fraser Institute includes all women aged 15 and over, whereas research on this topic (including the Fortin report from 2011) has typically focused on core-aged mothers (aged 25 to 54) with young children given not all women are mothers and those outside the core-age group are less likely to participate in the labour force.