Fraser Institute
Ottawa touts wait lists for dysfunctional child-care program
From the Fraser Institute
By Matthew Lau
Ahead of its April 16 budget release, the Trudeau government effectively admitted its national child-care program, which it began implementing in 2021, has created widespread shortages. “We’re seeing wait lists increase across the country,” said Jenna Sudds, federal minister in charge of child care.
The government has tried to cast the shortages as the result of skyrocketing demand for a popular federal program. But when government makes billions of dollars in subsidies available, of course there will be massive demand among people wanting to get their hands on the cash. That doesn’t mean the program is a success; it means the government is wrecking a market by throwing supply and demand out of whack.
Vancouver has a shortfall of about 15,000 child-care spaces for children up to age 12. In Niagara Region, the wait list for toddlers and preschoolers has expanded by 227 per cent in just the past two years. Clearly, the child-care sector has been thrown into disorder.
But if shortages illustrate a government program’s benefits, then the average 44-week wait time to get orthopedic surgery in Canada is evidence of the success of government health care. Our health-care system must be great—look how many people are lining up for it!
To try to mitigate the shortages, the Trudeau government announced $1 billion in low-interest loans and $60 million in non-repayable grants to expand and renovate child-care spaces. Additional money will be spent in the form of student loan forgiveness and training for workers in the sector. Both the shortages and new spending confirm what skeptics of national government daycare predicted from the outset—the original budget of $30 billion over five years, then $9.2 billion annually after that, underestimated what taxpayers would eventually shell out.
The new spending also exacerbates two government-created problems in child care. The first is that the $1 billion in loans and $60 million in grants are available only to public and non-profit providers. So excluded from the program are parents who want to take care of children at home, children who are cared for by grandparents or other relatives, and private for-profit providers. Instead of getting child-care help, they’ll foot the tax bill to pay for the government-preferred forms of child care.
The discrimination against private for-profit providers is a clear problem with the existing federal child-care strategy. “Frankly, Canada’s national daycare system excludes many more Canadians than it includes,” Cardus researcher Andrea Mrozek wrote last year. In Nova Scotia, where the federal government wants to move “to a fully not-for-profit and publicly managed system,” even provincial Liberal Leader Zach Churchill has lamented the exclusion of the private sector.
The second problem made worse is the spending is done increasingly through different streams and programs, diverting money towards administrative and bureaucratic bloat instead of actual child care. Based on a municipal memo back in 2022, it’s already estimated Peel Region in Ontario needs 40 additional bureaucrats to deal with child care. In British Columbia, the City of Cranbrook recently issued a 26-page request for proposals for consultants to prepare grant applications to the provincial government for child-care funds.
The ever-increasing government budget for child care, apparently, is great for the government sector and consultants hired to help move government money around. It’s a disaster, however, for parents who cannot find child care and taxpayers who pay billions for shortages—a reality unchanged by the Trudeau government’s latest announcement.
Author:
Fraser Institute
Young people increasingly embrace conservatism
From the Fraser Institute
By Philip Cross
One of the most intriguing recent political trends in North America is the growing support for conservative parties among young people. Once a reliable source of overwhelming support for the elections of Barack Obama and Justin Trudeau, a rising share of the youth vote is trending towards candidates such as Donald Trump and Pierre Poilievre. Young people voting for conservative politicians could be dismissed as just a backlash against failed economic policies, but there are indications of a more fundamental shift to embracing at least some conservative values.
Canadian youths now support the Conservatives more than any other party, a development not seen in decades, if ever. According to an Abacus poll, 36 per cent of Canadians between 18 and 29 years old would support the Conservatives versus 27 per cent for the NDP and a paltry 19 per cent for the Liberals. Nor is support for Poilievre’s Conservatives just a backlash from the failing fortunes of youths under the Trudeau regime. An Environics polls found young people in Canada would vote for Trump more than any other age group: 28 per cent of Canadians between 18 and 34 years old prefer Trump versus 13 per cent for those 55 and over and 27 per cent between 35 and 54.
Faced with a health-care system that’s clearly broken in Canada, youths have fewer qualms about involving the private sector than older generations who were raised to believe that publicly-provided health care was a fundamental Canadian value. A recent poll by Leger published in Le Journal de Quebec found that 44 per cent of youths 18 to 34 years old support private delivery of health-care services, the mirror image of the views of people 55 and over who oppose it. Meanwhile, youths in the United States identify as having more conservative views than their parents even more than millennials did 20 years ago, with the largest shift among young men.
Rising support for conservative politicians and initiatives among young people reveals several trends. Most obviously is that many of today’s youths reject the radical woke agenda espoused by a small but vocal minority. When confronted with the reality of an economy that’s not generating the jobs, incomes and housing they desire, these youths prioritize results over ideology, especially immigrant youths who came to Canada for economic reasons. The importance attached to results is driving many youths even to question the usefulness of democracy. In his 2023 book The Fourth Turning Is Here, historian Neil Howe cites polls that one in four young Americans would prefer a dictatorial president unconstrained by Congress while only one in 10 Americans over age 65 agree.
Howe’s analysis is based on the proposition that historical movements move in cyclical ebbs and flows rather than by extrapolating straight lines. This is intuitively easy for me to understand after a career specializing in the study of business cycles. It’s well known that there are regular cycles in financial markets and the economy, partly because long periods of prosperity and bullish financial conditions lull the next generation into under-estimating the risks of a downturn. This complacency inevitably precipitates the sort of risky decisions that trigger a slump. As economist Hyman Minsky wrote, “Success breeds a disregard of the possibility of failure… Stability leads to instability. The more stable things become and the longer they are stable, the more unstable they will be when the crisis hits.”
Cyclical analysis is also useful in understanding political trends instead of just assuming history continues on a linear trajectory. For example, for years it seemed inevitable that support for Quebec separatism would rise inexorably until independence was achieved. Instead, support peaked during the 1995 referendum then steadily evaporated as younger generations had more pressing priorities than independence.
We see the same cyclical phenomenon play out in the political preferences of today’s youths, even if conservatives still represent only a minority and their longer-term commitment to conservative values remains uncertain. Instead of reinforcing the left-wing bias of youths that helped propel Obama and Trudeau to power, youths are reacting against the status quo that ignores their pocket-book concerns. These shifting attitudes of young people could help reshape North America’s political landscape in ways few would have thought possible a decade ago.
Author:
Alberta
Lesson for Ottawa—don’t bite the hand that feeds you
From the Fraser Institute
By Tegan Hill
The Alberta government has launched a campaign to inform Canadians about the negative impacts of the federal government’s cap on greenhouse gas (GHG) emissions in the oil and gas sector, which exempts the other three-quarters of the economy that emit including transportation, buildings and heavy industry.
According to Alberta Premier Danielle Smith, the cap will “kill jobs” and lead to “economic and societal decline” for all Canadians—and she’s right. Any policy that damages Alberta’s economy comes with consequences for all of Canada.
Of course, this isn’t the first Trudeau policy to damage the sector. The list includes Bill C-69 (which imposes complex, uncertain and onerous review requirements on major energy projects), Bill C-48, (which bans large oil tankers off British Columbia’s northern coast and limits access to Asian markets), “clean fuel standard” regulations, numerous “net-zero” targets, and so on.
Again, while these policies disproportionately impact Albertans, they have consequences for all Canadians from coast to coast because of Alberta’s role in the federation. In our current system, Ottawa collects various taxes from Canadians across the country and then redistributes the money for programs including equalization and employment insurance.
For perspective, from 2007 to 2022 (the latest period of available data), Albertans contributed $244.6 billion more in taxes and other payments to the federal government than they received in federal spending—more than five times as much as British Columbians or Ontarians. The remaining seven provinces received more federal spending than they contributed to federal revenues. In other words, Albertans are by far the largest net contributor to Ottawa’s coffers.
Albertans’ large net contribution reflects the province’s comparatively young population (fewer retirees), higher rates of employment, higher average incomes and relatively strong economy.
Alberta’s relative economic strength isn’t new. From 1981 to 2022, the province had the highest annual average economic growth rate in Canada. In 2022, Alberta accounted for 17.9 per cent of Canada’s total economic growth despite being home to just 11.6 per cent of the country’s population. That same year, Alberta contributed nearly one in every five private-sector jobs created in Canada. In fact, Alberta was one of only two provinces (alongside Nova Scotia) where private-sector employment growth (including self-employment) exceeded government-sector employment growth over the last five years (2019 to 2023).
Alberta’s prosperity, which helps finance other provinces, may help explain why 56,245 more Canadian residents moved to Alberta than left it in 2022—a much higher net inflow than in any other province. For decades, Alberta has provided economic opportunities for Canadians from other provinces willing to relocate.
Albertans continue to contribute more to the federation than Canadians in other provinces due to Alberta’s relatively strong and prosperous economy. And Canadians benefit from the economic opportunities Alberta provides. With this in mind, the Trudeau government should stop imposing economically damaging policies on the province—as it costs not just Albertans but all Canadians.
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