Question Period Note: RELEASE OF THE CENTRE FOR THE STUDY OF LIVING STANDARDS REPORT ON EARLY CHILDHOOD EDUCATORS LABOUR SHORTAGE IN CANADA

Published on May 1, 2024, the Centre for the Study of Living Standards Report on Early Childhood Educators Labour Shortage in Canada focuses on challenges associated with attracting and retaining qualified Early Childhood Educators. To address this problem, advocates have been calling for additional funding to improve wages, benefits and working conditions. The report evaluates this proposal's feasibility and broader economic impacts

• I welcome the report from the Centre for the Study of Living Standards and the YMCA.

• The work of advocates and experts is essential to advancing evidence-based policy.
• The Government of Canada recognizes the importance of a highly trained, qualified ELCC workforce to ensure the availability of high-quality child care.

• In addition to the Canada-wide bilateral agreements with provinces and territories, Budget 2024 proposes even more supports to the crucial ELCC workforce through investments such as $10 million for increased training opportunities and $48 million for student loan forgiveness.

If pressed on support to ECEs

• Federal funding under the Canada-wide system is supporting the development of a highly trained ELCC workforce through investments that are helping provinces and territories increase wages, implement pension plans, and introduce a range of education and training initiatives.

• We know that more work needs to be done, work is underway with provinces and territories to develop a multilateral ELCC workforce strategy so that, together, we can support the workforce.

If pressed on return on investment and women labour force participation

• We know that when we invest in early learning and child care, children, mothers, families and the whole community can thrive.

• In 2023, labour market participation among mothers aged 25-54 years old in Canada with young children (under age 6) reached a record high at 79.7%, up from 75.9% in 2019.

• That is an increase of 3.8 percentage points.

The report Addressing the Early Childhood Educators Labour Shortage in Canada: Challenges, solutions and Impacts was published on May 1st, 2024. The report was commissioned by YMCA Canada and was conducted by the Centre for the Study of Living Standards.
The report outlines that the ambitious Canada-wide early learning and child care (ELCC) system is facing challenges, particularly in attracting and retaining qualified Early Childhood Educators (ECEs), exacerbated by the COVID-19 pandemic. The report notes that the labour shortage in child care conflicts with the Canada-wide expansion goals. To address this problem, advocates have been calling for additional funding to improve wages, benefits and working conditions – the YMCA is suggesting a 25% wage increase for ECEs, estimated at $1.2 billion (as found by Cleveland (2023)), to address this shortage. The report evaluates this proposal's feasibility and broader economic impacts.
The child care sector employed 252,645 individuals as of 2021, predominantly ECEs. Despite a 100% increase in job vacancies for ECEs from 2021 to 2022, wages have stagnated. The report estimates that the proposed wage increase could attract 58,192 to 103,746 additional ECEs, sufficient to staff the 250,000 new spaces. However, logistical constraints, such as the capacity of education systems, may delay the expansion.
The report also draws on Quebec's experience with universal child care to estimate potential economic benefits:
• It suggests that if Canada sees similar results to Quebec, and all 250,000 additional spaces are created, maternal labour force participation in Canada could increase by 7.54 to 8.40 percentage points over five years, depending on how many mothers were already employed but using informal care prior to using one of the new spaces.
• Then, assuming the average productivity of this added workforce will be the same as Fortin et al. (2012) found in Quebec, that would lead to a $2.25 billion to $2.48 billion annual contribution to GDP.
• Considering the report’s estimated cost of increasing ECE wages ($1.2 billion, as found by Cleveland (2023)), the benefit-to-cost ratio ranges from $1.88 to $2.06.
Additionally, the report assesses social benefits, including improvements in child development, life outcomes, and care quality, associated with expanding the child care system. However, inadequate funding and staffing may undermine program efficacy, leading to adverse outcomes for children. Nonetheless, sufficient staffing and better working conditions for ECEs can enhance care quality.
Despite evidence supporting the positive impact of universal child care, the study finds no significant relationship between access to child care and fertility rates.

On the topic of current labour force participation rates, the report notes that while gains in Quebec have recently outpaced gains in the rest of Canada, the author believes the effectiveness of the program should be evaluated based on the number of spaces it has created. The author does not take any of the recent changes (or lack thereof) in labour force participation rates across Canada as evidence that the program has not been successful in its goal of promoting female labour force participation.
Rather, the author notes that “one can attribute the lack of considerable labour force participation response to [the] slow expansion of the program”.

Key Federal Initiatives

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.

The Government of Canada is investing over $27 billion to build a Canada-wide early learning and child care system. 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.

In addition, Budget 2024 included the following measures:
• $48 million over four years for student loan forgiveness for early childhood educators working in rural and remote communities.
• $10 million over two years, starting in 2024-25 to increase training for early childhood educators.
• Establishing a Sectoral Table on the Care Economy that will consult and provide recommendations to the federal government on concrete actions to better support the care economy, including with regard to early learning and child care. Budget 2024 also announces the government’s intention to launch consultations on the development of a National Caregiving Strategy.

During the July 2023 meeting of FPT Ministers Most Responsible for ELCC, ministers also agreed to develop a multilateral ELCC workforce strategy centred around 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 ELCC 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 developing 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.

Female labour force participation

Using publicly available data from the Labour Force Survey (see table below), we can see that the labour force participation rate for all women aged 25 to 54 increased by 3.3 percentage points between 2015 and 2023, from 82.2% to 85.5%.

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 rates (annual), Canada, 2015 to 2023

Year Women aged 25-54 Women aged 25-54 with a child under the age of 6
2015 82.2% 73.9%
2016 82.2% 74.6%
2017 83.0% 75.4%
2018 83.3% 74.6%
2019 83.8% 75.9%
2020 82.5% 75.9%
2021 84.2% 77.0%
2022 85.1% 79.0%
2023 85.5% 79.7%

Source: Statistics Canada, Labour Force Survey (Labour force characteristics by sex and detailed age group, annual (statcan.gc.ca); Labour force characteristics by family structure, annual, unadjusted for seasonality (statcan.gc.ca))

Looking at women aged 25-54 with a child under the age of 6, who are the main beneficiaries of the Canada-wide system of early learning and child care, the labour force participation rate increased by 5.8 percentage points over the same period.

The Bank of Canada’s January 2023 Monetary Policy Report further 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 report Addressing the Early Childhood Educators Labour Shortage in Canada: Challenges, Solutions and Impacts was published on May 1, 2024. The report was commissioned by YMCA Canada and was conducted by the Centre for the Study of Living Standards.

• The report outlines that the ambitious Canada-wide early learning and child care (ELCC) system is facing challenges, particularly in attracting and retaining qualified Early Childhood Educators (ECEs), exacerbated by the COVID-19 pandemic.

• The report notes that the labour shortage in child care conflicts with the Canada-wide ELCC system's expansion goals.