Child care must serve kids not corporate shareholders
TheStar.com – comment – Child care must serve kids not corporate shareholders
March 07, 2008
Martha Friendly and Margaret McCain
Last fall, news that an Australian-based child care giant was setting up in Canada shook the early childhood community. The expression of interest from the global group of companies raised fundamental questions about the nature of Canadian child care: Is it a public service or a business venture? Is there room for profit-making in the care and education of our youngest children? Is it time to reconsider who should own and operate child care?
Fifteen years ago, Australia’s child care looked much as Canada’s does today, consisting mostly of community-operated programs. But changes in government financing â€“ first by Labour and then by the Howard government â€“ fuelled corporate expansion. Child care corporations, reaping whopping shareholder profits courtesy of public dollars, became the darlings of the Australian stock exchange.
By 2005, fierce competition, mergers and buyouts left Brisbane-based ABC Learning Centres â€“ begun with one centre in 1988 â€“ the only one standing. Owning a significant share of Australian centres, ABC and the new 123 Global group turned their sights overseas to become the world’s largest child care company. This year, ABC’s worth was reported at almost $4 billion.
Canada’s “mixed economy” of child care was familiar territory to the corporation. Canada-wide, about 80 per cent of child care is not-for-profit, with a very small publicly operated sector. The commercial sector is made up of small owners, although a homegrown chain sector is emerging. To date, no Canadian child care company is listed on the stock exchange.
Why is all this so important? In child care, quality is key. Compelling evidence shows that all children thrive in high quality early childhood programs, but that poor quality programs can be negative. Both high and poor quality child care can have especially strong effects on vulnerable children.
Considerable research has accumulated showing that not-for-profits are much more likely to produce the high quality environments in which children thrive.
A study by University of Toronto economist Gordon Cleveland et al. describes Canadian research results: “Under the right conditions, non-profit status appears to contribute strongly to the quality of services … partly this greater production of quality occurs because non-profits make different decisions about inputs (and appear to have higher quality objectives) than for-profits.” These results hold even if public funding is available to both sectors. Research also shows that it is not easy to regulate centres into better quality. A 2007 U.S. study found more stringent state regulations to be associated with higher quality in non-profit child care but “no links were found between state policies and the quality of for-profit programs.”
Accountability for public dollars is also an issue. Significant public funding is necessary to ensure that programs are both high quality and accessible to parents. But funding has to be well directed to be effective; this means ensuring that it all goes to children, not profits. Although Australia spends more public dollars per capita for early childhood programs than does Canada, parent fees are sky-high, “unprofitable” groups go unserved and quality is an ongoing concern.
As ABC Learning Centres’ stock paid generous dividends for some years, it would seem that shareholders have scored better than children or families, raising important questions about public accountability and how public funds are used.
A final consideration is whether programs for young children are merely markets to be exploited for profit or â€“ as U.K. expert Peter Moss suggests â€“ “public forums for democratic practice.” The latter view â€“ valuing participation by children, parents, teachers and community members â€“ is incompatible with treating early childhood programs as businesses whose first responsibility is to owners or shareholders. As support for public education and recognition of the critical importance of the early years in human development are well accepted, it is inappropriate to leave the education of our youngest children to the vagaries of the market.
The lessons from Down Under, including the hard lesson that child care may be a risky business, continue to mount. Last week ABC Learning Centres lost 70 per cent of its market value. There are concerns about centres closing and suggestions of investigations, insider trading and lawsuits. Parts of the collapsing empire â€“ built with public funds â€“ are being sold off to other large companies, and a new global child care company may come to Canada. But whether the corporation is foreign-owned or made-in-Canada, the fundamental issue remains the same: Are preschoolers primarily consumers to be wooed for their profitability, or are they worthy of the same kind of interest and support we devote to their older siblings in the public education and university systems?
To ensure against the next incursion of corporate child care, Ontario early childhood activists are calling for a moratorium on new licences to for-profit providers. But in the longer term, a more comprehensive solution is needed.
In 1946, Ontario took leadership in establishing Canada’s first provincial child care act, but it hasn’t been updated appreciably in more than 60 years. Today, 75 per cent of mothers with children under 5 are in the workforce and the research on best child care policy practices is robust. Ontario’s child care legislation needs to be overhauled to reflect both current knowledge and the needs of modern families.
A good start would be new public policy designed to shape an early childhood education and care system for all children supported by public funding that is used for children, not profits.
Martha Friendly is the executive director of the Childcare Resource and Research Unit.
Margaret McCain is director of the Council for Early Childhood Development and co-author of the Early Years Study and the Early Years Study 2.