Another research report finds significant economic benefits from Canada-wide Early Learning and Child Care (CWELCC) program

A new report,¹ published by the Centre for the Study of Living Standards (CSLS), estimates that the Canada-Wide Early Learning and Child Care (CWELCC) program increased maternal employment by approximately 29,000 workers by the end of 2025, corresponding to a direct GDP gain of roughly $2.7 billion annually. 

Lower fees associated with higher maternal employment and fiscal returns

Significant gains have been made on affordability – average fees in regulated settings that are part of CWELCC fell by more than half everywhere in Canada except Quebec where fees were already well below $10 a Day for those who have access to the province’s directly publicly funded child care system. Fee reductions resulted in the average annual parental expenses for child care decreasing by approximately $1,400 between 2022 and 2025.

Comparing different age groups of children – 6 to 12, under 6, and those in and outside Quebec – the study reported a 1.92 percentage increase in employment and a 2.44 percentage increase in labour force participation among mothers with younger children following the policy implementation.  

The fiscal effects from the labour-income gain are generated through additional personal income tax revenue, additional payroll contributions, additional indirect tax revenue from new labour income and reduced income-tested transfers. The authors estimate a core general-revenue offset of $365 million per year, excluding payroll contributions. This estimate also excludes long-run gains from persistent maternal earnings and child development. 

Importantly, further economic gains can be realized through expanding access to low-fee child care. 

Workforce shortages primary barrier to increasing access

The report’s findings align with other reports that access to CWELCC-financed child care programs remains an issue because there is not sufficient supply to meet the high demand. Workforce recruitment and retention is identified as a key challenge to meeting the rising demand. 

The report asserts that, “this makes workforce policy a central part of child care system design rather than a peripheral labour-market issue. A substantial wage enhancement for qualified early childhood educators should be understood not as a stand-alone fix, but as an enabling condition for converting fee reductions into staffed spaces and, in turn, into larger labour-market and economic returns.” 

Addressing barriers to access will yield significant increases in employment and GDP

The authors illustrate a scenario where access issues are resolved. Under these circumstances, it’s estimated the program can generate between $10.9 to $15.6 billion in additional GDP. The report estimates that a fully realized $10 a day system would result in a meaningful reduction in the average after-tax income spent on child care: from between 5% to 6% (depending on family type) in 2024, to between 1.9% to 3.6%. 

The authors summarize the economic benefits stating their findings “show that the policy already generates substantial measurable economic returns, while also illustrating that the much larger unrealized gains now lie on the access side of the system rather than the affordability side.”

In addition to investment in the workforce, the report recommends that policies must focus on target space creation for populations and communities where spaces are needed most.

Read the report here.

1. Shariati, Alisaleh. (2026) “The Economic Returns of Accessible and Affordable Child Care in Canada,” CSLS Report 2026-01, June. https://csls.ca/research/june-2026-research-paper/. ↩︎