During the COVID-19 pandemic, working parents and caregivers struggled at home and at work, and the economy at large reeled, navigating the unpredictable. Who among us would have expected it would take a pandemic to illustrate the critical need for reliable child care?
Rising costs and the struggles during the pandemic brought the realization that developing federal and provincial programs wasn’t just long overdue but a necessary economic strategy to increase workforce participation and invest in the future.
By capitalizing on government programs, employers can foster greater employee loyalty and reduce burnout—which affects workforce productivity—through employee-sponsored benefits that support child care.
An Overview
As part of the 2021 budget, the Canadian government committed over $27 billion over five years to build the Canada-Wide Early Learning and Child Care (CWELCC) system with provinces and territories.
According to the government of Canada, the goal is for all families to have access to high-quality, affordable, flexible and inclusive early learning and child care. To improve child-care affordability, fees were reduced by at least 50% on average by the end of 2022, with a target to bring fees down to $10 a day by 2026.
Within a year, all 13 provinces and territories joined the subsidized program, and a separate, asymmetrical agreement was reached with the government of Québec.
Provinces and territories have announced measures to create 150,000 new child-care spaces. They are on track to reach the goal of 250,000 new affordable spaces by March 2026, a 27% increase in the number of regulated spaces since 2021. The initiative also supports 35,000 affordable spaces across nearly 1,000 Indigenous early-learning and child-care sites, with more planned in the next few years.
The overall goal is to build a community-based, inclusive child-care system to give every child the best possible start, while continuing to strengthen Canada’s workforce.
The Canada child benefit (CCB) is a nontaxable amount paid monthly to help eligible families with the cost of raising children under 18 years of age. There may be an additional monthly benefit to qualified families caring for children eligible for the child disability benefit. The CCB focuses on providing reliable support to low- and middle-income households in need of stability.
Having these resources available will allow the Canadian economy to grow and enable more women to reenter or stay in the workforce.
Why It Matters to Businesses
Parenthood comes with its share of unique stresses, especially in the early years, when the high cost and limited availability of quality child care can strain even the most resilient families. Working parents value employer support for child care, flexibility and a strong focus on work–life balance—benefits that give organizations a competitive edge in attracting and retaining employees. Helping employees access reliable child care, whether through on-site facilities or emergency backup care, reduces absenteeism and allows less-stressed employees to focus, creating a more dependable workforce.
To help working families make balanced life choices, many employers are using top-up programs that complement public benefits.
As employment lawyers Whitten & Lublin explain, “Many new parents are entitled to employment insurance (EI) benefits during their parental leave; however, this is often not enough to support their families. This makes new parents reliant on what is known as ‘top-up’ parental benefits, which some employers provide to supplement new parents’ earnings from EI.”
The government of Canada states that, generally, parent(s) can choose between two options on an application for parental leave EI:
- Standard parental benefits (maximum: 40 weeks altogether for both parents, but one parent cannot receive more than 35 weeks of standard benefits)
- Extended parental benefits (maximum: up to 69 weeks altogether for both parents, but one parent cannot receive more than 61 weeks of extended benefits).
Employers can offer supplemental payments to maternity, parental (including adoption) or caregiving benefits (including compassionate care, family caregiver benefit for children and family caregiver benefit for adults). These plans do not have to be registered with Service Canada. The top-up amounts are not considered as earnings and are not deducted from the employees’ EI benefits when certain requirements are met.
Room for Growth
Although pregnancy and parental leave, along with employee top-up benefits, can provide essential additional support, top-up plans are still not widely utilized. A recent AON survey found that 58% of the organizations surveyed offer maternity top-up. It’s a more commonly provided benefit in financial and professional services (70%), technology/communications (61%) and public sector employers (85%), but less so for employees in the manufacturing sector (34%). Similar patterns were seen with parental top-ups, though the overall numbers were lower in comparison. The survey concluded that “legislated options complemented evolving social norms and speak to changing employee expectations” and that workplaces are increasingly likely to support these cultural shifts through benefits.
The Canadian Centre for Policy Alternatives’ tenth annual child-care survey suggests the CWELCC will face the challenge of meeting the growing demand for lower fees and rapidly creating more child-care spaces, with both equity and better access in mind.
As the public options expand, businesses have an opportunity to design benefit plans that address the child-care coverage gaps that affect employees while helping organizations stand out in a competitive labour market. With an uncertain economic climate, employers and employees are scrutinizing their spending and reassessing benefits. Companies seeking to improve retention should focus on understanding what their employees need to create a workplace culture that promotes engagement and invests in the future.
