The Economic Returns of Accessible and Affordable Child Care in Canada

Alisaleh Shariati

No 2026-01, CSLS Research Reports from Centre for the Study of Living Standards

Abstract: This report evaluates the economic returns of Canada's Canada-Wide Early Learning and Child Care (CWELCC) system, five years after historic federal investments launched the initiative in 2021. Using Labour Force Survey microdata and a difference-in-differences methodology, the report finds that approximately 29,000 additional mothers entered employment by the end of 2025 as a result of the CWELCC expansion, generating a direct GDP gain of $2.7 billion per year. Average child care fees fell by more than half nationally between 2021 and 2022, and average annual parental expenses for children aged 0 to 5 fell by roughly $1,400 between 2022 and 2025. Despite significant progress on affordability, access constraints and workforce shortages are preventing some families from converting lower fees into realized child care use and expanded labour market participation. Unfilled vacancies in the early childhood workforce remain high and wages remain low relative to other sectors. Drawing on international evidence and Quebec's experience with low-cost child care since 1997, the report finds that universal child care can generate large fiscal returns over time. An illustrative scenario analysis estimates that resolving remaining access barriers could unlock up to $15.6 billion in additional GDP. The report recommends targeted actions to expand staffed spaces, strengthen the early childhood educator workforce, and ensure equitable access across regions and population groups.

Keywords: child care; early childhood education; maternal labour force participation; CWELCC; $10-a-day; GDP; fiscal returns; early childhood educators; Canada; provinces (search for similar items in EconPapers)
Date: 2026-06
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