Putting the

Putting the “S” Back in the CHST
by Martha Friendly

After several years of dialogue about a National Children’s Agenda, an agreement on early childhood development (ECD) was signed by Canada’s First Ministers’ last September. The First Ministers pledged that “every child should be valued and have the opportunities to develop his or her unique physical, emotional, intellectual, spiritual, and creative potential.” The agreement specifies four areas for provincial/territorial development: healthy pregnancy, birth and infancy; parenting and family support; early childhood development, learning and care; and community supports. $2.2 billion over 5 years, or $300 million in year one, $400 million in year two, and $500 million in years three, four and five has been committed by the federal government.

The ECD agreement parallels a higher profile health agreement to reinvest an additional $18.9 billion about nine times the ECD funds—in the Canada Health and Social Transfer (CHST) over five years. The CHST currently comprises $15.5 billion cash annually; the increase represents $2.5 billion next year, rising to $5 billion in 2005. The CHST, introduced during the devolution and deficit-cutting frenzy of the mid 1990s, combined federal funding for health care and post-secondary education with the cost-shared Canada Assistance Plan (CAP) in a single block fund while, at the same time, its cash transfer payments to the provinces experienced massive cuts. This had a profound effect on federal contributions to child care.

CAP was not only the national social welfare program but also the sole federal contribution to regulated child care, providing $320 million in 1995 for fee subsidies for low-income families. When CAP and its child care funds were buried in the CHST, many analysts predicted that demands for health funding would eclipse other social needs. This, in fact, has come to pass. While the CHST block fund officially includes health, post-secondary and social programs, it is now routinely referred to as “health funding,” not as a source of funds for social programs like child care or the other children’s services specified in the ECD agreement or, indeed, social spending in general. This has left little financial terrain for meeting social needs like child care that have a significant impact on the health and well-being of Canadians.

If the First Ministers’ commitment to “value every child” and to provide development-enhancing opportunities were to be taken at face value, the annual cost of meeting the ECD agreement would come to almost $10 billion about 20 times the $500 million allocated in the agreement’s fifth year. An analysis of what it would mean to adequately fund the agreement’s four service areas to serve “every child” shows the following annual costs:

$267 million for healthy pregnancy, birth and infancy (defined as expansion of the Canada Prenatal Nutrition Program and a public health home visit for every birth)
$1.7 billion for parenting and family supports (defined as family resource programs that provide a range of activities, from parent/child interaction, parenting education, family support groups, counselling, supervised visiting for estranged families to mediation, crisis intervention, home visiting, family violence and breastfeeding programs. Some of these services, it should be noted, promote healthy pregnancy, birth and infancy)
$7.4 billion for early childhood development, learning and care (defined as holistic, universal early childhood care & education services with affordable parent fees for all children aged 1-5)
$654 million for community supports (defined as infrastructure, system management, research and development, new service models, community support and development, and some training)
Total = $9.9 billion (about 1 per cent of Canada’s GDP)

While ECD services, especially child care, are not cheap to deliver, they are demonstrably economical. Today it would be difficult to find a voice that dissents from the premise that ensuring that children have a good start in life contributes to a society’s well-being and prosperity over the long-term. As UNICEF’s recent report, The State of the World’s Children 2001 states: “investing in a child’s health, education and nutrition is a relatively efficient and effective way of guaranteeing future returns through savings on health and other social services.”

The UNICEF study is only the latest in a veritable blizzard of reports that clearly articulate why high quality child care is integral to an early childhood development agenda. Indeed, UNICEF directs “decision-makers” to “create, find and allocate the resources to adequately fund early childhood care.” It should be noted that some decision-makers have already recognized the value of early childhood care; while a European Union guideline calls for one percent of GDP to be spent on the early childhood development, learning and care services that are part of Canada’s ECD commitment, some EU members (Denmark, Sweden, France) already exceed this.

But the September First Ministers’ agreement shows that this isn’t what’s happening here in Canada. Neither provincial nor federal decision-makers seem ready to shift the rhetoric of their ECD agreement into practice by allocating resources adequate to meet its terms. Generally, both levels of government persevere in maintaining out-dated, shopworn policy for young children, women and families. And except in Quebec and British Columbia, there is still considerable resistance to recognizing the multi-generational benefits of high quality child care. Thus, at a time when each level of government has considerably more money than it did last year—the federal government through its massive surplus, and the provinces through the partial restoration of the CHST—children’s needs are relegated to the limited ECD agreement while the Canada Health and Social Transfer has essentially become the Canada Health Transfer.

Whether this will continue to be true in the face of the mounting evidence that it is poor public policy remains to be seen. There is widening acceptance of the idea that quality child care is integral to a healthy and just society, and well worth spending money on. In this year’s prestigious Massey Lectures, Michael Ignatieff linked child care in a human rights framework to public financing: “Much as deficit-reducing conservatives may lament the fact, the test of serious moral commitment to the family is a willingness to spend public money. Effective child protection; universal access to health care; affordable child care; first-rate primary and secondary education – these are the building blocks of the protective arch that society must raise over its families. This institutional arch doesn’t come cheap but those exponents of family values who won’t stump up for it are just engaging in cheap talk.”

Martha Friendly is coordinator of the Childcare Resource and Research Unit in the Centre for Urban and Community Studies at the University of Toronto.

Interaction, Vol. 15, No. 1, Spring 2001, p. 5-6.