Entire generations of younger people are being squeezed between stagnant earnings, rising costs, scarce family supports, and a lack of work-life balance. Some are adapting by putting off their dream of having a family or giving up on it altogether. For others, this squeeze is passed on to the next generation, leaving 1/4 to 1/3 of kids starting school in ways that mean they’re more likely to fail, go to jail, or wind up sick as adults.
We're currently focusing on these policy changes to reach our goal:
- Make child care affordable for all families, by setting $10 as the maximum daily fee. Five provinces have already achieved this milestone. It’s time for the rest to catch up.
- Protect the $10 a day child care system by paying staff the professional wages they deserve — and that will attract the workers needed to make child care spaces available to all families.
- Make sure all infants get the benefit of a parental leave system that lifts families out of poverty and gives all kids a good start in life. It will cost us less in the long run.
OUR COMPREHENSIVE POLICY SOLUTIONS
Table of contents
- Guiding principles
- Our basic plan
- Enough time with family
- Enough time at work
Our solutions framework is guided by these core principles:
Many inequities between women and men have their roots in decisions about caregiving. Men still tend to take on fewer caregiving responsibilities, tightening the squeeze for women struggling to balance work and family. This was never clearer than during the pandemic, when disruptions to schools and child cares resulted in what was coined a ‘she-cession’. Gen Squeeze’s policy solutions will move Canada towards greater gender equity, by ensuring both women and men can access the joys and burdens of the labour market, and the joys and burdens of caregiving at home.
Income supports for parents raising young kids should be high enough to ensure that no family lives in poverty. Lone parents and families with kids are among the groups most likely to experience poverty in Canada, with additional risks for marginalized and racialized groups. Younger people are now more likely to be economically vulnerable than older, thanks to stagnant wages and rising costs for things like housing and education. Gen Squeeze’s policy solutions target the financial squeeze on young families by promoting affordable child care and inclusive and adequate parental leave.
Enough time with family
Prioritizing the generation raising young kids means ensuring that they have enough time and money to embrace the caregiving work on which we all rely. This begins in the very first moments following the birth of a child, with our parental leave system. It’s high time that this system got an overhaul, to expand inclusivity, increase benefits, and promote sharing of leave between parents.
We estimate a price tag of less than $6 billion annually for these upgrades. This might sound like a lot, but keep in mind that the annual increase in Old Age Security benefits will soon be $27 billion. A generationally fair Canada means investing in wellbeing for all ages, from the early years onwards.
Remove parental leave from Employment Insurance so that it is available to all households
Parental leave isn’t a good fit for Canada’s Employment Insurance (EI) system. EI is designed to shore up income when jobs are lost or disrupted. Parental leave is about our collective responsibility for social care, supporting parents to raise future generations of workers, volunteers and citizens on whom we will all rely. All children should have protected time with parents who have sufficient income to ensure that they get the best start in life. We can deliver on this commitment by ensuring access to the full benefit of Canada’s parental leave system, independent of the employment status of parents.
Tying parental benefits to EI means that socioeconomic and labour market inequalities tend to be reproduced in access to parental leave. One third of women are ineligible for EI parental benefits because of the nature of their employment, hours of work, or other qualifying conditions. Women with higher earnings are more likely to be able to claim parental leave. For families with annual incomes under $20k, only 50% received benefits. For families with incomes above $60k, this rises to more than 80%. As UNICEF Canada observes: “parental leave policy discriminates against children whose parents are unemployed, under-employed, precariously employed, workers in unregulated jobs, students, teen mothers, and those who simply do not earn enough income to take leave at the program’s wage replacement rate.”
Increase parental leave benefit amounts
Parental leave time is dependent on parental leave pay. Gen Squeeze recommends increasing the cash benefits provided to parents via parental leave. Benefits should be high enough to prevent families from falling into poverty — especially during these critical early years when the prevalence of poverty in Canada is high, and can yield lifelong effects.
Parental leave currently replaces only 55% of weekly earnings for up to 12 months, dropping to 33% for extended leave (12-18 months). Compared to other OECD countries, 29 had more generous benefits than Canada. The International Labour Organization Maternity Convention and the European Commission set 66% as the minimum earnings replacement for parental leave. Clearly, Canada is lagging well behind international standards and comparators.
Here’s what new minimum and maximum benefits could look like:
- New minimum benefit: $650/week. This is close to today’s maximum. The minimum parental leave benefit should ensure that parents aren't raising infants in poverty.
- New maximum benefit: Just over $1,000/week. This is calculated as 80% of the parent’s annual earnings of up to $68K (median earnings), adjusted for inflation annually. This change would increase income while on parental leave by as much $24,000 a year.
Increased minimum and maximum benefits would help ease the money squeeze confronting parents who want to prioritize precious time at home with a new baby. This is especially important given the slow pace of progress on restoring housing affordability, by reconnecting home prices with earnings from paid work. With housing costs as high as they are, going on parental leave should not cost parents the equivalent of another mortgage- or rent-sized payment.
Raising the maximum benefit would help to disrupt the way in which the current system tends to discourage the higher-earning parent from taking leave, due to the greater financial hit. Thanks to persistent gender pay gaps, higher earners are still more likely to be men, meaning that current maximum parental leave levels reinforce unequal distributions of work and caregiving.
It’s also worth investing in increased parental leave benefits, because the alternative — infant care in child care settings — is limited and expensive. Child care professionals can deliver high-quality care for fewer infants than they can three- and four-year olds, due to the lower staff-to-infant ratios required. Ensuring parents can afford enough parental time at home with a newborn is a cost-effective way to promote quality early experiences for infants, as well as healthy child attachment.
Promote shared parental leave
Shared parental leave can yield many benefits. Both parents spend more time with newborns. Both parents share responsibility for earning AND caring. More broadly, shared leave can help disrupt gendered divisions of home labour that contribute to pay inequity and reinforce the glass ceiling.
Gen Squeeze recommends that Canada’s parental leave policy reserve leave time for BOTH parents. We acknowledge this doesn't make sense for single-parents, who would remain eligible for the same total amount of leave time as two-parent households. Here’s an example of what this could look like:
- 6 months paid leave time for Parent 1
- 6 months paid leave time for Parent 2
- 6 months paid leave time to split between Parent 1 and Parent 2 at their discretion
To encourage both parents to take leave, we suggest allocating 6 months to each parent on a ‘use it or lose it’ basis. This block of time could not be shuffled to the other parent. However, the final 6 months of leave could be used by either parent, or divided between them, based on family preferences.
We’re advocating for this design in response to evidence confirming that women taking more than 12 months of leave reinforces societal patterns and norms that help perpetuate gender pay gaps and other employment barriers for women. Plus, supporting men to take leave sets up opportunities for fathers to actively embrace the joys of forming strong attachments to their young children that will last a lifetime.
More flexible work time
We can help parents better balance caregiving and paid work by adopting more flexible workplace practices. Recent studies on four-day work weeks confirm that they can reduce worker stress and anxiety, and increase retention and satisfaction — all without compromising productivity. The experimentation many employers were forced to undertake during the pandemic confirmed that remote or hybrid arrangements can work, and are preferable for many employees who welcome reduced commuting time, and greater flexibility and autonomy to manage family obligations throughout the work week.
Policy design remains at an early stage regarding flexible work time, so we’re open to new and emerging solutions. Post-pandemic Canada is still in a messy period of balancing employer expectations for office team-building and employee desires for flexibility. However, it does seem that these issues are here to stay. Especially with recent surveys of younger workers confirming the high priority they attach to work-life balance, and identifying hybrid and remote work arrangements as key considerations in job selection and retention.
Enough time at work
After taking parental leave to adapt to and enjoy time with infants, many parents want or need the opportunity to return to work. That’s why affordable and high-quality child care services are a critical support for young families.
Happily, Canada has made big strides on child care in recent years, with the federal government committing in 2021 to a national $10/day child care program, in collaboration with provinces and territories. This policy victory was the outcome of years of advocacy on the part of Gen Squeeze and other leaders in the child care community, like Child Care Now and the $10aDay campaign in BC. Indeed, the framing of this new policy as ‘$10/day’ reflects language that originated in the Gen Squeeze Lab.
While recent child care investments are historic, there remains more to do to ensure that quality child care is affordable and accessible for all Canadian families. Our recommendations point the way forward.
Ensure child care is affordable for all families
Canada’s new child care investments commit to $10/day as the average fee for families. Gen Squeeze recommends setting $10/day as the maximum fee, not just the average — a recommendation echoed by others. We know this is feasible, because five jurisdictions across Canada have now set fees at $10 a day or less: Quebec, Newfoundland, Manitoba, Saskatchewan and Nunavut.
Ensure child care is available to all families
In 2021, there were only enough licensed spaces for 29% of children aged 0-12. As part of pan-Canadian Child Care Agreements, governments have committed to creating 250,000 new licensed spaces by 2025-26. Yet to date, there’s been far too little action towards achieving this goal. Provincial governments tend to rely on existing child care providers to expand their capacity (despite many already being stretched too thinly), without making adequate capital investments for new facilities.
Child care that is affordable isn’t enough if parents are unable to find spaces in their communities. Increased investment is needed to create the spaces required to meet growing demand from parents who want to pursue paid work. This means creating and resourcing an expansion plan for public, not-for-profit child care facilities that meet local community needs, including Indigenous-led programs and facilities.
Ensure high-quality child care by recruiting and retaining enough professionals who are paid fairly
The pandemic made it painfully clear how vital child-care professionals are. The hard work they perform every day allows others to keep doing their jobs, which in turn keeps the economy moving for all of us.
Child-care professionals should be paid in accordance with the importance of their work, as well as the skills and education they bring to it. We need trained early educators to deliver developmentally stimulating activities for the kids in their care. When these workers have the same amount of education as grade-school teachers, they should be paid accordingly.
To be competitive and effective, a report by the Coalition of Child Care Advocates of BC and Early Childhood Educators of BC recommends developing a wage grid for child care staff. The report calls for hourly wages of at least $30-40, depending on qualifications, experience, and years of employment.
Inadequate remuneration is a major barrier to recruiting and retaining qualified early childhood educators. A survey of child care programs in BC found that 45% reported losing more staff than they can hire as a result of inadequate wages, benefits, and working conditions. Research shows that high quality child care for preschool age children requires low numbers of children relative to adult caregivers — even lower than what is typical for kindergarten classrooms. Achieving appropriate ratios means being able to find and keep qualified staff, and providing additional resources for children with extra support needs.
Better spread work time across longer lives – fewer hours per year, more years of work.
Canadians are living 7-10 years longer on average today than we did when we created our retirement income security systems to address (successfully!) what were then high rates of poverty among retirees. At the same time, fertility rates have declined, resulting in fewer working age people contributing the tax dollars needed to pay for retirement (and other) benefits. The result is that we’re supporting the same (or better) services for today’s retirees with only 3 tax paying working age residents per retiree as we did when there were 7 workers for every retiree. The consequences for government finances — and generational fairness — are enormous.
It’s against this backdrop that Gen Squeeze recommends that all of the policies which help to shape our expectations about employment consider the intersection of total hours of work per year, with total years of work over the life course. Helping workers achieve greater work-life balance during each year of employment must happen alongside a conversation about the age at which we are eligible to receive retirement income benefits, like old age security (OAS).
Longer life spans may mean that it’s appropriate to ask (many) working age Canadians to work for more years before claiming OAS. Especially if these longer work lives help to pay for the kinds of public programs needed to facilitate greater work-life balance each year that we are in the labour market. Programs like longer and more generous parental leave, affordable and high-quality child care, accessible and reliable public transit, and housing that is affordable as owners or renters.
The prospect of raising the age of eligibility for OAS is unlikely to be popular. Especially when today’s workers are confronted by a Baby Boom generation that didn’t have to make these trade-offs — but still enjoy more wealth than those who came before them. Despite this, better spreading out the paid work we will each contribute across our entire (longer) lives can be one part of the answer to finding the balance many of us want right now.
The quid pro quo for longer work lives should be fewer hours of work in each of those years of employment. As observed above, evidence is mounting that 4 day work weeks have benefits for workplace productivity and employee retention. We can also explore adapting overtime, Employment Insurance, and Canada Public Pension premiums paid by employers to make it less costly for businesses to use employees up to 35 hours per week — and more costly for hours thereafter.
With new incentives, employers could reduce the full-time work week by 3-5 hours on average for the 50% of men and 33% of women who currently work more than 40 hours/week. These employees would trade some after-tax wages (or future wage increases) in order to gain four more weeks of time per year. Changes to the Canada Child Benefit could ensure any reduction in employment hours does not reduce income in low-earning families — which is especially important for some lone parent households. Employees who currently work part-time would gain opportunities for more employment. In two-parent homes, the total number of hours worked by parents may not change, but these hours could be distributed more evenly between parents.
It's easier to balance work and family if work doesn't take up so much of our time. Reduced hours of work in each year of employment in exchange for more years of employment throughout one’s life could be a reasonable trade-off for many younger people, who report that work is “central to their identity,” but who also see enough time at home and with family as a priority. Particularly for families raising young kids, when time and financial pressures are particularly high.
The family policy framework was developed based on research led at the Human Early Learning Partnership (HELP), a research centre at the University of BC in which the Gen Squeeze Lab is located. HELP has served as an international knowledge hub about early child development, and its impact on life-long health.
Content on child care draws from the work of the national Child Care Now movement, the Coalition of Child Care Advocates of BC, and Early Childhood Educators of BC. Research on child care and progress towards meeting the $10 a play plan led by the Canadian Centre for Policy Alternatives also informs the framework. Other groups to which we look for ideas and inspiration include UNICEF Canada and the Reimagining Care/Work Policies research project.
The framework draws on recent research on work time flexibility, and in particular the 4 Day Week Global and Canadian movements. A number of recent surveys have explored the attitudes, values and pressures facing younger Canadians, including the 2023 Deloitte Gen Z and Millennial Survey, Abacus Data’s exploration of how housing unaffordability influences decisions of younger Canadians, and Statistics Canada data on how socioeconomic obstacles are impacting the wellbeing of Canadian youth.