For decades, social policy was organized around basic assumptions about how the vast majority of the population organized employment and family responsibilities. Typical homes were composed of two parents, several children and perhaps an elderly relative. These assumptions matched the realities of demography, employment and family life. Only one in 10 families was headed by a lone parent. Women’s labour force participation rate was low; they stayed home to care for their children, the house and perhaps their elderly kin.

When these typical patterns began to break down, they prompted policy adjustments. In the 1960s, the Canada Assistance Plan (CAP) provided child care subsidies for reg- ulated daycare to low-income families. The 1970s brought parental leaves and child care expense deductions, but par- ents themselves still had to cover the costs and, most impor- tantly, find someone to provide the care. In the 1990s, Employment Insurance, social assistance and child benefits were redesigned in response to new labour force realities such as part-time and temporary work as well as more moth- ers with young children in the labour force (figure 1).

None of these adjustments produced an adequate (affordable, quality and available) system of early learning and child care (ELCC). There are still not enough spaces in good-quality settings, costs are high, and there is little edu- cational and developmental content to programming, even in regulated care.

Yet, non-parental care is now the norm for preschool children in Canada. On February 7, 2005, Statistics Canada’s The Daily reported that the percentage of all chil- dren aged six months to six years receiving non-parental child care reached 53 percent in 2000-01, up 11 points from only six years earlier. Among toddlers aged two and three, the rate was 56 and 57 percent. Overall, however, only one in four Canadian preschool children was in a regulated cen- tre. Three-quarters used family daycare or a babysitter.

In 2004, the Organisation for Economic Co-operation and Development (OECD) issued a warning about the pol- icy challenges ahead and recommended substantial new investment, more attention to the quality of services and enhanced intergovernmental cooperation. Its report iden- tified where the policy priority should be. With the excep- tion of Quebec, Canada is lagging far behind its peers in providing preschool education and other developmental services. Canada is, therefore, putting its future human capital at risk; ELCC is an essential component of the learning system in any knowledge-based economy.

A second priority is to make good use of existing human capital. Earlier investments in education do not reap their expected benefit, and family incomes are too often low. Such results occur when parents remain out of the labour force or take low-paid but flexible jobs because they lack con- fidence in or access to good-quality non-parental care.

Third, despite the recognized need for intergovernmen- tal cooperation, in 2006 we are heading towards a potential clash. When the new Conservative government threatens to tear up the bilateral agreements-in-principle signed with all provinces in 2005, it destabilizes federalism rather than fostering the trust that allows all gov- ernments to address policy challenges. Creating trust among governments is a priority.

There is now a widely shared con- sensus that investments in human capital must begin early. ELCC creates conditions for successful schooling and lifelong learning. The oft-cited 1999 Early Years Study, prepared by Margaret McCain and Fraser Mustard for the Harris government in Ontario, is one of many studies building on knowledge in neuroscience, develop- mental psychology, human develop- ment, sociology, pediatrics and the determinants of health. This knowl- edge provides a framework for under- standing the early years of child development and their impact on learning, behaviour and health throughout the life course. Such frameworks all lead, as they did in the Early Years Study, to recommendations for programs for early child develop- ment and parenting, including servic- es for non-parental child care that serve as a new ”œtier” for ensuring healthy development well before com- pulsory schooling. The science shows that key milestones in brain, physical and social development are passed long before age six.

Good-quality services not only stimulate the brain development of all children, however. They can also lower rates of vulnerability to develop- ment problems. Vulnerabilities, more- over, are not confined to poor children. The findings of the Human Early Learning Partnership (HELP) at the University of British Columbia are revealing. Applying the Early Development Instrument (EDI), HELP observes a gradient in developmental vulnerability. From the most affluent to the least affluent Vancouver neighbour- hoods, the vulnerability rate rises from 6 percent to 38 percent, as does the risk of multiple vulnerabilities. But, targeting prevention only at the ”œdisadvantaged” would miss most of the children who would benefit from preventive services, such as good-quality child care. The largest number of children at risk is found in middle-class neighbourhoods that, taken as a whole, house more young children than do poor neighbourhoods.

A key finding of this important lon- gitudinal study is that prevention must begin early if later investments in schooling are to pay off. Schools with large numbers of vulnerable children cannot make up for early experiences that make children vulnerable to failure. The study found that as much as 60 per- cent of the between-school variation in basic competency tests in Grade 4 can be explained by a combination of kinder- garten vulnerability rates and the socio-economic status of the catchment area. The proportion of children who, on entering school, are vulnerable on one or more dimensions of development is a powerful determinant of a school’s suc- cess in assisting children to achieve their basic academic competencies.

Good-quality non-parental child care improves the chances of high returns on human capital investments in a third way. In Toronto and Vancouver, children of recent immigrants make up fully one-quarter of the school-age population and are from households in which the main language is neither English nor French. Inadequate language and communication skill in English or French is one key marker of vulnerabili- ty. Without access to language learning and cultural integration well before kindergarten, many children enter school with a vulnerability, making them less ready to learn, and therefore with a higher risk of early failure.

The foundations for high returns on human capital are not built in school, and certainly not at university. Well before children arrive at the school door, many of the pathways and capac- ities for learning are already set, whether hard-wired in their brains or socially determined by their preschool cogni- tive, physical or social competencies.

The demand for good-quality non- parental child care is high not only because it is good for children; parents also need it. Parents understand that it often takes two incomes to keep a fami- ly out of poverty. Couple families with one or two children but only one earner have an 18 percent probability of being low-income, while those with three children or more have a 26 percent probability. Both these numbers are higher than the probability of low- income for lone-parent families (15 percent), and four to five times greater than that probability for households with two or more earners (Horizons 2004).

It is hardly surprising, then, that the labour force participation rates of women with chil- dren, whether they are lone parents or living in a couple, have soared in only two decades.

Public policy has, however, failed to keep up with this sea change in behav- iour. Some politicians sometimes act as if most mothers are at home with their preschool children or as if parents have a choice about taking a job. Neither of these assumptions matches the realities of today’s families. Two-thirds of all mothers with preschool children are employed, and the rate is still climbing.

All parents want the best quality care for their children, but they are often unable to find something that fits their needs and meets their standards. Too often, they must compromise both the quality of the job they take and the quality of non-parental child care.

Despite having higher levels of education " that is, having made more investment in their own human capital " women still work in jobs that pay only 60 percent of what men earn, and many of them are part-time. Such jobs are often in sectors of the economy that enable a work-family balancing act, because hours are flexible or atypical. And then, the only child care arrangements parents can make are too often less than satisfying.

All child care is not equal. When it is commercially provided for prof- it, even regulated care is much less like- ly to meet standards for educational quality than are non-profit centres or even family daycare providers. Such results were amply documented in a 2003 study commissioned by the gov- ernment of Quebec (table 1). The fail- ing grade on educational programming in the private daycare centres (which are licensed and expected to follow the same program as the non-profit early childhood centres) was due both to an absence of physical infrastructure sup- porting educational programming and the quality of programming itself.

A second study of the Quebec sys- tem, undertaken by a team led by Richard Tremblay (IRPP Choices 2005) extended these findings. There was a sim- ilar quality distinction between the Early Childhood Centres and those that were for-profit or unregulated. Well over one- quarter (27 percent) of for-profit centres were rated ”œinadequate,” a figure even higher than the rating for unregulated care (26 percent). Moreover, not only were many of the for-profit and unregu- lated services inadequate, but the poorest children were concentrated in the lowest quality settings in each category.

Given such hard data, why are so many parents still ”œchoosing” home- based care by an untrained and often unregulated provider? Three-quarters of children are, as noted, cared for by an individual. There are, of course, sev- eral reasons.

The first is supply. In 2004 there is a regulated space for only 16 percent of children aged 0 to 12 across the coun- try, and 43 percent of these were in Quebec " although only 23 percent of children with employed mothers live there.

When quality spaces are available, parents choose to use them. In 1994-95 " that, is before the new sys- tem " Quebec children were already likely to attend a daycare centre. But at 25 percent, their rate was only slightly ahead of Alberta’s (24 percent) and only 6 percentage points ahead of Ontario’s. Six years later, the gaps were much wider. More than two of every five chil- dren in Quebec in 2000-01 attended a daycare centre, a percentage more than double that of any other province (except PEI, where kindergarten is pro- vided in child care centres). Moreover, in both Alberta and Ontario, the pro- portion attending a centre actually fell, as demand outstripped supply and the willingness of governments to spend.

Given such hard data, why are so many parents still ”œchoosing” to use for-profit care? This is because spaces are now more likely to be located in for- profit centres. In Quebec, the rate of increase of for-profit spaces doubled between 1998-2001 and 2001-2004. In Ontario, which has almost twice as many employed mothers with pre- school children than Quebec, the num- ber of for-profit spaces created was three times higher than non-profit ones. Governments are sometimes choosing, in other words, to encourage the form of care proven to be of lesser quality.

Rather than supporting ”œreal choice” then, governments are forcing some parents to make the diffi- cult choice between their child’s well- being and their own employment and family income. Such a forced choice is hardly a positive response to either the challenge of ensuring good returns to human capital investment in the future or the challenge of making best use of past investments in girls’ and young women’s education.

It is not as if child care has not been on the political agenda and at the cabi- net table. Since the 1980s, both federal and provincial governments have actively shaped supply. In 1997, Quebec innovated within North America with its universal, affordable and develop- mentally focused system, at a cost of almost $1.5 billion. At the same time, several governments chose to reduce their spending on regulated care, in the name of deficit cutting and/or encour- aging other forms of provision.

Three of the provinces with the most children " British Columbia, Ontario and Alberta " made substantial cuts. For example, between 1992 and 2004, Alberta reduced its spending by 20 percent (in actual dollars). Ontario has begun to increase its spending again, but in 2004, it was still $44 million short of its 1995 level. It is no wonder that the OECD warned that Canada lags behind its peers in building the social infrastruc- ture of a knowledge economy and that this major international organization called for greater intergovernmental cooperation in making ELCC a priority.

Programs focused on children have already served as one of the domains for healing intergovernmental rela- tions. After the federal government unilaterally slashed and redesigned its transfers to the provinces in 1995, sub- stantial rebuilding of trust and collabo- ration was required. The Social Union Framework Agreement, for all its warts, marked one move toward better rela- tions. The National Child Benefit, the National Children’s Agenda, the Early Development Initiatives, the 2003 Multilateral Framework Agreement on Early Learning and Child Care, as well as the agreements-in-principle for developing ELCC signed in 2005 with all provinces, represent steps towards rebuilding a functioning system of intergovernmental relations.

Meant to be renewed annually over five years, the agreements-in- principle allowed provinces to make plans and commitments to parents and to associations willing to build infrastructure and provide services. Canada finally seemed to be reversing its downward slide and to be following the trend already established by its OECD peers.

That is why the premiers were caught off-guard by Stephen Harper’s promise, during the election cam- paign, to revive what are essentially family allowances, presenting them as an alter- native to the federal transfers promised by the agreements- in-principle. Saying he would abandon the five-year agreements after only one year, he suggested that a $1,200 taxable payment to families, plus tax credits for employers, was a suitable sub- stitute. Provincial premiers with the most to lose because they have made strong commitments to their own citizens about creating an expanded system (BC, Quebec, Saskatchewan and Ontario) quickly went on record after the election, calling for the minority government to respect the agreements duly signed with its predecessor. To do less would only return intergovernmental relations to the bad old days of unilateralism in federal- ism. It would also create the risk of a return to the status quo ante, when Canada’s future well-being was hostage to the inability of governments to coop- erate and to modernize their support for the realities of the Canadian labour force, families and its future, represented by its children.