Net Child Care Costs in Canada

Abstract

Child care costs are of great concern for many families in Canada, yet little is known about net child care costs. Using six “typical” families in ten cities and factoring in tax assistance and means-tested child care subsidies, we find that net child care costs vary significantly across the income distribution and family types. For many families, the combination of subsidies and tax-based supports results in significant cost reductions. However, these measures have limitations. For example, maximum subsidies do not always cover the full cost of care, and tax-based supports may not always alleviate cash flow problems.