Why child-care vouchers are a problem

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This article was published 17/08/2025 (221 days ago), so information in it may no longer be current.

As backpacks come off the shelves and parents fuss over what to put in lunch boxes, many families face a more stressful back-to-school dilemma: who’s going to watch the kids when school’s out? For too many Canadian households, September means resuming the annual hunt for affordable, reliable child care.

Just in time, an old idea is being repackaged as a potential solution. In response to Prime Minister Mark Carney’s call to cabinet members for ideas to cut public spending, some private child-care providers are pushing for child-care vouchers, where public dollars are directed to parents instead of being invested in actual child care.

The Association of Childcare Entrepreneurs, a group representing Canadian for-profit providers, claims in a blog post that giving cash directly to families would cut government red tape and save billions by reducing the need for “complex audit procedures” and “federal oversight structures.”

The voucher program suggested by the association is a demand-side funding model, with public money tied to individual families and their purchasing choices rather than supporting child-care services for the entire community.

But bureaucratic red tape is the backbone of a functioning system: it provides safety standards, fair staff wages, oversight of public dollars and intentional planning to ensure every community has access to care.

JUST ASK AUSTRALIA

Australia offers one of the clearest cautionary tales. Its Child Care Subsidy program is structured around a parental choice model, whereby public funds are allocated to families based on income and employment status.

The Australian government spends C$12.2billion annually on its child-care subsidy program, yet child-care fees continue to rise. Many families still struggle to afford them, and there are reports of serious — even criminal — infractions within the sector.

This system allows operators to set their own prices and doesn’t require them to justify how public dollars are spent. Rather than reducing costs for families or improving service quality, subsidies are mismanaged in ways that lead to their absorption into private profits or their use for expansion into wealthier markets.

It’s no small wonder this model appeals to commercial interests.

Between 2013 and 2024, 78 per cent of new child-care spaces in Australia were created by for-profit providers, mostly in high-income urban areas where parents can afford to pay. Meanwhile, lower-income and rural communities were largely left behind.

This is a model that expands care where it’s profitable, not where it’s needed.

SHIFTING THE BURDEN TO FAMILIES

Voucher systems like Australia’s place the burden of navigation on parents. Instead of empowering families, they often exclude those who face language barriers, housing instability or non-standard work schedules.

Even affluent parents find it difficult to locate care and evaluate its quality. Research shows that for-profit providers often deliver lower-quality care, yet dominate in areas with more disposable income.

Canada is already seeing signs of what happens when for-profit child care expands without strong oversight.

RED FLAGS AT HOME

The 2024 report from Québec’s auditor general warned that for-profit growth, fuelled by generous fee rebates to parents, had caused the child-care system to deteriorate.

The report found many commercial operators failed quality assessments, committed serious safety violations such as poor sanitation and improper medication practices, employed unqualified staff and neglected to conduct mandatory background checks.

In 2022, the former provincial minister for families called government support for private daycare the “biggest mistake the Québec government committed in the last 25 years.”

The problem isn’t limited to Québec. In Alberta, a recent review by the provincial auditor general found more than half the audited child-care operators that received public grants had discrepancies in their claims. Some billed for hours never worked. Others didn’t pass on wage top-ups to staff or fee reductions to families. One month, a provider was overpaid by $26,000 due to a bogus claim.

These are symptoms of a model built on self-reporting without oversight. When oversight is weak, public dollars can vanish without delivering a public good.

A BETTER WAY FORWARD

When governments directly fund providers, they can correct for system weaknesses and withhold funds from those who don’t meet financial, safety or quality regulations.

That’s the real choice before us: do we want a child-care system built on profit and personal risk or one grounded in public responsibility and equitable access?

The demand for child care is outpacing supply in Canada. Parents are justifiably frustrated, and quick fixes like vouchers can seem appealing.

But these vouchers come at the cost of deregulation. Governments have the tools to expand child care quickly and responsibly by enforcing clear standards, supporting a qualified workforce and prioritizing communities that need it most.

Vouchers strip away those tools and shift responsibility from public systems to individual families, leaving access to child care shaped by geography, income and luck.

What families need isn’t a market gamble, but a guarantee that no matter where they live or how much they earn, their children can count on safe, high-quality care. That’s the promise of a public system, and it’s something a voucher can’t deliver.

» Daniel Foster is a policy researcher at the Atkinson Centre for Society and Child Development, University of Toronto. Kerry McCuaig is a fellow in early childhood policy at the Atkinson Centre, Ontario Institute for Studies in Education, University of Toronto. This column was originally published at The Conversation Canada: theconversation.com/ca.