Major Canadian bank reports expanding access to child care is key to increasing women’s labour force participation.

CIBC, one of Canada’s largest financial institutions, says that expanding access to affordable and publicly-funded child care is crucial to increasing mother’s labour force participation. 

In a new report, CIBC Thought Leadership states that, although the wage gap persists between mothers and women without children, it has been narrowed due to the expansion of affordable child care across Canada. 

Women now contribute 40% to family incomes in male/females couples, which has increased from 35% in 2007.  Women with children under six still have an income gap of 9% to those with children under the age of 18, but this has decreased from 12% since 2019. 

CIBC notes how the motherhood penalty (the gap in income between those with children and those without) in Quebec dropped from 40% to 23% after the introduction of subsidized child care in the province. 

The rest of Canada continues to have lower child care enrollment rates than Quebec, and CIBC suggests that if child care expands across Canada, the motherhood penalty will also lessen in other provinces and territories. 

The report further notes that countries with comprehensive child care and parental leave policies, such as Sweden and Denmark, have much lower income disparities for mothers than countries without these policies. 

CIBC concludes that enabling increased access to child care through expansion is a key action to continue to reduce the motherhood penalty, increase women’s labour force participation and facilitate increased economic activity across Canada.