Daycare Turf Wars: For-Profit Big Box vs. Non-Profit Big Box vs. State-Run Big Box

March 28, 2008
Helen Ward, President
Kids First Parent Association of Canada

The issue of funding ‘private for-profit’ daycare is where the daycare lobby gets internally conflicted between its left and right. The bed-mates start to fight, and as in most divorces, money is the issue. After all we are not talking small change: $18.5 billion [1] was the latest gross under-estimate—up from $10 billion [2] only one year before—offered by Fraser Mustard and Margaret McCain.

The left asks itself “whether a quarter of a loaf [is] better than a whole loaf”[3]: do we compromise our principles and accept public funding of ‘for-profit’ daycare or insist on funding for only ‘non-profit’? In the pursuit of achieving non-profit purity in the federal daycare Bill-303, they have raised the spectre haunting Canada, the spectre of ‘big box’ foreign daycare chains.

The right has no such qualms about tax payers’ money subsidizing for-profit daycare. For the Fraser Institute, if (a big if) there is to be ‘preferential treatment’ of institutional over parental child care, the private sector should be included. For World Bank daycare promoters, Fraser Mustard and RBC Vice President Charles Coffey, there is a “business imperative” and a need for partnership with business [4]. For the Liberals (long supported by corporate Canada), “previous Liberal approaches to child care have not focused on this… the profit/non-profit debate must not distract from the real goal,” explains one Quebec Liberal MP. [5]

Of course the left ought to know—even if they don’t like to mention it—that even Quebec funds for-profit daycare. The false claim of ‘universality’ would be even more false without the daycare spaces provided for profit. Parents using these centres would have opposed being excluded by a ‘non-profit only’ rule. And government cannot choose to fund for-profits only if they are not part of a big box chain: a business is a business.

The fact is that non-profit community collectives run by volunteer parent boards—the ’70s image sold by the daycare left—are hardly up to taking on the massive task of overseeing daycare for all 5 million children under 13 in Canada. The image of selfless volunteers in church basements does not apply to this social mega-project. The YMCA is a multi-national big-box daycare chain and the largest seller of daycare in Canada. Though it is technically a non-profit, it is not one in the daycare lobbyists’ sentimental sense of a local volunteer-run community group.

Don Giesbrecht, President of the tax-funded Canadian Childcare Federation, states that daycare industry workers are “generally fairly altruistic…nobody’s in this job to get rich”[6]. We need to cut out this sentimentality around non-profits. Millions of people have done trillions of hours of unpaid work in non-profit groups and society is grateful to them. But increasingly, paid staff are undeservingly inheriting the legacy of gratitude due the unpaid workers. Staff in non-profit organizations are not Mother Theresa: they are in paid jobs. They do these jobs exactly because they are paid, otherwise they could take on unpaid work of which there is plenty available. The same can be said of public sector jobs.

University of Toronto daycare economists, Drs. Gordon Cleveland and Michael Krashinsky, have examined this issue. Their claim that that non-profits provide higher quality care than for-profit daycares is frequently cited. But in their not-frequently cited OECD paper, they state that the line between non-profit and for-profit is blurry: “if the government will only deal with non-profit centres, then for-profit centres have a significant incentive to masquerade as non-profits by incorporating themselves under the non-profit statute.” [7]

These economists point out, “Relying on non-profit organisations to eliminate opportunistic behaviour can however be problematic.” Though we are loathe to admit that non-profits can be ‘opportunistic’, this masquerade can easily be affected by an opportunistic individual with a few friends willing to sign up as board members in order to register as a non-profit organization. They can then ‘hire’ the initiator as the executive director with almost all the responsibility—including setting his/her own pay. Non-profit compensation is not subject to limits and can be…profitable: there was a fuss in Quebec over $100,000 salaries.

The Non-Profit Trojan Horse

In fact the promise of non-profit daycare acted as a Trojan horse for the big boxers: they would not be here now trying to buy up Canadian daycares if the left hadn’t opened the gate. The non-profit vision-turned-nightmare helped win the backing of unions, the Bloc and the NDP to the cause of more money going to non-parental child care—which meant far less money going to parental child care. Money was shifted from child-related benefits and deductions for parental care to daycare. And remember the attacks in the 1990s by the NDP and neo-lib-cons alike against the hordes of welfare queen-mums destroying our economy? $4 billion was cut from welfare funding [8]. Lone mothers experienced the “most dramatic change” due to these “administrative changes”, to use the bloodless language of Statistics Canada.

The resulting carrots (for institutional care) and sticks (for parental care) treatment of parents attracts profit-seekers, and paved the way to the public trough for the big-box daycare corporations. Home-grown Canadian chains like Kids and Company are prospering. (Kids and Company was recently noted for raw sewage at a Toronto site and not reprimanded [9].) Australia mega-profiteering ABC Childcare—which is owned by a Canadian—is reportedly trying to buy up Canadian daycares.[10] Kindercare—the giant US chain—has a foothold here already. After all, under NAFTA, provinces cannot refuse funding to foreign-owned for-profit daycares when they already subsidize the Canadian-owned ones.

Kindergarten: Rebranding State-Run Big Box Daycare

Or is the solution to the non-profit/for-profit dilemma to enact state-run—and not merely state-funded—daycare? Lawyers researching the issue for the Canadian Union of Public Employees (CUPE) suggest [11] that NAFTA rules make a government-run system the only defense against the private big boxes.

Of course “state-run daycare” sounds too totalitarian, reminding us of the nasty quasi-orphanages of the Soviet Union. It is a very tough sell, so lobbyists adamantly deny they want it and instead speak glowingly of ‘community’ (whatever that is), diversity, and those parent-run boards.

However, while they were denying they wanted state-run (‘public’) daycare, they were meeting with state-run education ministry types to discuss just that (November 2005) [12]. In a major effort at re-branding, daycare promoters started calling these institutions ‘full-day kindergarten’ or ‘universal preschool’ or ‘universal pre-kindergarten’ or even ‘parenting centres.’ And they want them in located in schools—which happen to be ‘state-run’. ‘Wrap around’ or ‘seamless’ 10 hour+/day care is strategically bundled with this new and improved ‘early learning’ package. Another suggested goal is the creation of a ‘ministry of learning’ from birth to adulthood . So it looks like the Soviet model after all. Ontario has promised full-day schooling for ages 4 and 5 by 2010, and BC is studying the feasibility of this for ages 3 to 5.

Divided They Fall?

The state-run, non-profit, and for-profit factions are fighting it out over the billions of tax dollars they want. And don’t forget the other various sub-factions: family daycares, unions, the legions of tax-funded daycare researcher-lobbyists. In-fighting threatens to tear apart this increasingly unstable coalition of all those opposed to funding parents directly. We are seeing this in the growing irresolvable spats over Bill C-303 and full-day schooling.

Unlike these special interest groups, parents are diffuse lot, not cohesively organized. We lack the time, mobility, and resources to fight for ourselves. However, as the turf war at the public trough intensifies, it demonstrates that funding parents is the only resolution to the problem they have manufactured.

That’s thinking outside the (big) box!


[1] Feb 14, 2008. Transcript of Senate Committee on Social Affairs hearing

[2] Mar 26, 2007. Canada ‘dead last’ in spending; Expert urges replacing ‘chaotic mess’ of programs with ‘community hubs’; Toronto Star pg. A.1

[3] April 24, 2005. Toronto Star, “The ‘Tiny Tot’ brigade” by Laurie Monsebraaten

[4] Sept 28, 2005. Charles Coffey. RBC – speech transciption/video: “A better start is likely to lead to a better finish.” (cat link) video

[5] Nov 2007 (PDF): Letter from MP Marlene Jennings

[6] Dec 5 2007. Debate on TVO “The Agenda” (cat link)

[7] (2003). Cleveland, G. and M. Krashinsky, Financing ECEC Services in OECD Countries, OECD, Paris, pp.44-45

[8] Thursday, August 19, 2004. Statistics Canada: The Daily, “Study: Trends in the use of social assistance 1993 to 2000”

[9] Sep 01, 2007. “Daycare centres break rules” Toronto Star

[10] Child Care Corporation in Financial Meltdown (cat link)

[11] Nov. 2004. “Legal Opinion: Establishing a National System of Early Learning and Child Care in Light of Canada’s Obligations Under NAFTA and the WTO” by Steven Shrybman for CUPE

[12] November, 2005. “The Unhurried Day: Learning and Caring Seamlessly SYMPOSIUM REPORT

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