The Cost of Childcare in Alberta: A Barrier to Workforce Participation?

Introduction

Access to affordable and accessible childcare is crucial for families and the economy. It allows parents, particularly mothers, to participate in the workforce, contributing to their families' financial well-being and overall economic growth. The Alberta government is committed to "increasing accessible, affordable and high-quality child care in Alberta, giving families the choice they need." 1 However, the cost of childcare can be a significant barrier for many families, particularly in provinces where costs are high. This article examines the affordability and accessibility of childcare in Alberta, comparing it to other Canadian provinces and discussing its impact on families and the economy.

Types of Childcare in Alberta

Alberta offers two main types of regulated childcare: licensed childcare facilities (daycares) and licensed family day homes2. Daycares provide care for larger groups of children in a center-based setting, while family day homes offer care in a smaller, more home-like environment.

The cost of care varies by type and age group. Affordability grants from the government help reduce parent fees2. The table below shows the maximum affordability grant amounts for different types of care and age groups:

Child care type

Infant (under 19 months)

Toddler (19 months to under 3 years)

Preschool age (3 years to kindergarten)

Daycare – full time

Up to $883

Up to $709

Up to $626

Daycare – part time

Up to $317.50

Up to $255

Up to $225

Family day home – full time

Up to $487

Up to $452

Up to $417

Family day home – part time

Up to $175

Up to $162.50

Up to $150

1

In addition to full-time and part-time care, some facilities offer overnight care, with corresponding affordability grants available1.

The Cost of Childcare in Alberta

Childcare costs in Alberta vary depending on the age of the child and the type of care. According to a 2023 report by Arrive In, the average monthly cost of full-day childcare in Alberta ranges from $1,055 to $1,435 for infants, $975 to $1,295 for toddlers, and $850 to $1,198 for preschoolers3. At the University of Calgary, for example, monthly fees before the Affordability Grant were $1648 for infants, $1349 for toddlers, and $1174 for preschoolers4.

Age Group

Full-time Daycare (Monthly)

Family Day Home (Monthly)

Infant (under 19 months)

$1,055 - $1,435

$815 - $1,000

Toddler (19 months to under 3 years)

$975 - $1,295

$790 - $900

Preschool age (3 years to kindergarten)

$850 - $1,198

$715 - $900

3

The cost of childcare in Alberta has been a growing concern for families5. A Reddit user in Calgary shared their experience, stating that even with the federal subsidy, they were paying around $929 per month for full-time daycare5. This high cost can put a significant strain on household budgets, especially for families with multiple children.

In response to these concerns, the Alberta government has taken steps to reduce childcare costs. In January 2024, Alberta implemented affordability grants and an expanded subsidy program with the goal of reducing childcare fees to an average of $15 per day2. This initiative aims to make childcare more accessible for families and encourage workforce participation. The government's long-term goal is to achieve an average of $10-a-day for regulated childcare by March 20266.

Childcare Costs in Alberta Compared to Other Provinces

Childcare costs in Alberta are generally higher than in many other Canadian provinces, despite recent reductions3. A 2014 study by the Canadian Centre for Policy Alternatives found that while Toronto had the highest median fees for infant and toddler care, Calgary had the highest median fees for preschoolers8. In contrast, Quebec consistently had the lowest fees across all age groups due to its $7-a-day childcare policy7.

A report by Global News highlighted the significant differences in childcare costs across provinces, attributing these variations to the different approaches provinces have taken to reduce fees9. Some provinces, like Quebec, have implemented set fees for all parents, while others offer subsidies based on income9. Statistics Canada data from 2023 showed that parents in rural areas generally paid less for full-time childcare than those in large population centers10. This suggests that accessibility and affordability may vary within provinces as well.

Accessibility of Childcare in Alberta

The accessibility of childcare in Alberta is another critical factor affecting workforce participation. In 2019, there were 131,624 spaces in Alberta's regulated early learning and childcare system11. However, demand for childcare often exceeds the available spaces, leading to long waitlists11. In Calgary, for example, 60% of centers reported waitlists in 2016, and this number increased to 63% in 201711.

To address this issue, the Alberta government has committed to increasing the number of licensed childcare spaces. Through the federal-provincial childcare agreement, Alberta aims to create up to 68,700 new spaces by March 20261. This expansion includes both non-profit and for-profit spaces, with a focus on areas of high need and demand. The Canada-wide agreements provide a federal investment of $3.8 billion over five years to support the creation of new childcare spaces13.

Government Subsidies and Support Programs

The Alberta government provides subsidies and support programs to help families with childcare costs. The Alberta Child Care Subsidy is an income-based program that assists eligible families with the cost of regulated childcare14. Eligibility for the subsidy has been expanded to include families with a gross household income of up to $180,00014.

In addition to the subsidy, Alberta also offers affordability grants to licensed preschools, daycares, and family day homes1. These grants are not income-based and are intended to reduce parent fees for all families with children enrolled in licensed care.

Other support programs include the Extended Hours Subsidy, which provides additional assistance to families who require childcare outside regular hours, and the Alberta Child and Family Benefit, which offers further support to low-income families16.

Impact of Childcare Costs on Workforce Participation

High childcare costs can significantly impact workforce participation, particularly for women. Research suggests that when childcare costs are high relative to potential earnings, women are more likely to leave the workforce or reduce their working hours18. This can have long-term consequences for their careers and earning potential, contributing to the gender wage gap.

A 2022 report by the Early Childhood Education Report highlighted the direct impact of childcare availability on women's labor force participation19. When childcare is unavailable or unaffordable, parents often need to change their work schedules, reduce their hours, or rely on multiple or temporary care arrangements. This can disrupt their careers and limit their earning potential.

Furthermore, studies have shown a correlation between access to low-cost childcare and increased employment rates and hours worked by mothers20. This highlights the importance of affordable childcare in enabling mothers to participate in the workforce.

Historically, Alberta has had a low rate of female labor force participation among mothers, potentially linked to the high cost of childcare21. In 2005, Alberta had the lowest labor participation rate for mothers among Canadian provinces21.

The COVID-19 pandemic further exacerbated the challenges faced by working mothers, with many forced to leave the workforce due to childcare disruptions19. This "she-cession" highlighted the critical role of accessible and affordable childcare in supporting women's workforce participation.

Economic Impact of Childcare in Alberta

Childcare plays a vital role in Alberta's economy. It enables parents to work, contributing to the province's GDP and creating jobs in the childcare sector22. Affordable childcare can also lead to increased productivity and economic growth by allowing more parents to participate in the workforce. When childcare is more affordable, more women choose to work, which in turn means a higher GDP and standard of living18.

A study by the Business Council of Alberta found that high childcare costs in Alberta can significantly reduce families' disposable income18. For a typical family with two young children, childcare costs can consume up to 70% of the second earner's net income18. This can limit families' spending power and overall economic activity.

The COVID-19 pandemic further highlighted the economic importance of childcare. The closure of childcare facilities and schools led to significant disruptions for families, with women disproportionately bearing the burden of unpaid care work23. This underscores the need for a robust and resilient childcare system to support families and the economy during crises.

The federal-provincial childcare agreement aims to boost Alberta's economy by making childcare more affordable and accessible1. By reducing parent fees and creating new childcare spaces, the agreement aims to increase workforce participation, particularly among women, and support economic growth. Investing in early childhood education can also have long-term economic benefits, such as improved educational outcomes and future economic contributions24.

How Childcare Costs Affect Families in Alberta

High childcare costs can place a significant financial burden on families in Alberta. Many families struggle to afford quality childcare, leading to difficult choices and sacrifices18. Some families may have to rely on lower-quality care or forgo childcare altogether, which can have negative consequences for children's development and parents' careers.

The Alberta government's efforts to reduce childcare costs through affordability grants and subsidies have provided some relief to families1. With the fee reduction, Alberta families could save up to $13,700 annually per child in regulated childcare with the Affordability Grant and subsidy27. However, affordability remains a concern for many, especially those with multiple children or those living in areas with limited childcare options.

The high cost of childcare can also contribute to stress and anxiety for parents28. Balancing work and family responsibilities can be challenging, and the financial strain of childcare can add to these pressures. As one Reddit user shared, "daycare will work out to be around $929 per month. Meaning we will still be paying around $44 per day." 5 This illustrates the financial burden childcare costs can place on families.

Comparing Childcare Policies and Initiatives Across Canada

Alberta's childcare policies and initiatives differ from those in other provinces with higher workforce participation rates. These variations are influenced by factors such as political priorities and economic contexts29.

Quebec, for example, has a long-standing subsidized childcare program that provides affordable care for all families29. This program has been credited with increasing female labor force participation and boosting the province's economy.

Other provinces, such as Manitoba and Prince Edward Island, also have provincially-set fees for childcare, making it more affordable for families32. These provinces have seen positive impacts on workforce participation and economic growth.

While provinces share the goal of providing quality childcare, their approaches differ. Some emphasize affordability through direct subsidies or set fees, while others focus on quality enhancement through accreditation programs or stricter regulations33. The availability of online resources and local support networks also varies across provinces30.

Alberta's recent efforts to reduce childcare costs through affordability grants and subsidies represent a significant step towards greater affordability and accessibility30. However, the province still lags behind some other provinces in terms of comprehensive childcare policies and initiatives.

Alberta Compared to Provinces with Higher Workforce Participation

While Alberta has made progress in reducing childcare costs, it is important to compare its policies and initiatives to those in provinces with higher workforce participation rates. This analysis can provide valuable insights into potential best practices and areas for improvement.

According to Statistics Canada, provinces like Yukon, Northwest Territories, and Prince Edward Island have higher labor participation rates than Alberta34. These provinces have implemented various initiatives to support workforce participation, including investments in childcare.

For example, some provinces have focused on increasing the availability of childcare spaces through government funding and incentives for providers35. Others have implemented policies to improve the quality of childcare, such as accreditation programs and increased qualifications for educators36.

Some provinces have also adopted innovative approaches to address childcare deserts, such as public-private partnerships and employer-sponsored childcare benefits37. These initiatives aim to increase access to childcare in underserved areas and support working parents.

By examining these initiatives and their impact on workforce participation, Alberta can identify potential strategies to further enhance its childcare system and support families.

Conclusion

The cost of childcare in Alberta remains a significant barrier to workforce participation, particularly for women. While the government has taken steps to reduce costs and increase accessibility through affordability grants, subsidies, and the creation of new childcare spaces, further efforts are needed to ensure that all families have access to affordable, high-quality childcare.

Despite recent progress, childcare costs in Alberta remain high compared to other provinces, particularly Quebec, which has a long-standing subsidized childcare program. This highlights the need for Alberta to explore and potentially adopt policies and initiatives that have been successful in other provinces.

Investing in accessible and affordable childcare offers numerous benefits. It supports families by reducing financial burdens and stress, increases workforce participation, particularly among women, and boosts economic growth through increased productivity and consumer spending. Moreover, high-quality early childhood education can have long-term benefits, such as improved educational outcomes and future economic contributions.

Moving forward, Alberta should consider a more comprehensive approach to childcare, potentially including:

• Expanding subsidized childcare programs: This could involve increasing income eligibility thresholds for subsidies or providing more generous subsidy amounts.

• Exploring provincially-set fees: This could help standardize childcare costs across the province and ensure greater affordability for all families.

• Investing in childcare quality: This could involve increasing funding for accreditation programs, supporting professional development for educators, and implementing stricter quality standards.

• Addressing childcare deserts: This could involve incentivizing the creation of childcare spaces in underserved areas and supporting innovative solutions like public-private partnerships and employer-sponsored childcare benefits.

By prioritizing these initiatives, Alberta can create a more equitable and accessible childcare system that supports families, strengthens the workforce, and contributes to a thriving economy.

It is important to acknowledge the trade-offs between different childcare policies. While subsidized programs and set fees can enhance affordability, they may also raise concerns about quality and availability. Conversely, focusing solely on quality enhancements may limit accessibility for low-income families. Therefore, a balanced approach that considers these trade-offs and prioritizes both affordability and quality is crucial for Alberta's childcare system.

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