Reduced Fees, Rising Waitlists: Early Lessons from Canada’s Childcare Plan

March 19, 2026 – Canada’s $10-a-day childcare plan has lowered parent fees across most of the country, but families are increasingly stuck on waitlists as demand outpaces the supply of licensed spaces, according to a new report from the C.D. Howe Institute.

In “From Promise to Practice: A Critical Review of the Federal Childcare Plan,” Parisa Mahboubi and Tingting Zhang examine the early outcomes of the Canada-wide Early Learning and Child Care (CWELCC) program. The study finds the policy has lowered childcare costs and contributed to modest increases in maternal labour force participation.

“Lower childcare fees have improved affordability for many families, yet without enough childcare spaces, the policy’s economic impact will remain limited,” says Mahboubi, Associate Director of Research at the C.D. Howe Institute.

The report notes that eight provinces and territories have already reached average childcare fees of $10 per day or less, while the remaining provinces – British Columbia, Alberta, Ontario, New Brunswick, and Nova Scotia – have reduced fees by at least half. However, governments have created far fewer licensed spaces than the federal target of more than 250,000 nationwide.

“As a result, childcare providers across Canada are reporting increasingly long waitlists,” says Mahboubi. “For many families, the main barrier has shifted from affordability to availability.”

These shortages are contributing to widespread access challenges. In 2024, more than three-quarters of childcare centres reported having an active waitlist. By 2025, nearly half of parents using childcare reported difficulties finding available care.

Despite these constraints, maternal labour force participation among women with children under six rose by 3.7 percentage points nationally between 2019 and 2025. The report finds the labour-market impact remains limited relative to the scale of the program.

A federal cost-benefit analysis suggests that increased maternal employment generates limited additional tax revenues compared with program costs, leaving the plan with a substantial net fiscal cost over its early years.

To strengthen the program’s impact, the authors recommend expanding licensed childcare spaces, particularly in underserved areas, improving wages and working conditions for early childhood educators, and introducing more flexible supports – such as an income-tested refundable tax credit – for families relying on non-subsidized care.

“As childcare fees fall, demand for regulated care is rising faster than the system can expand,” says Zhang, Policy Analyst at the C.D. Howe Institute. “Without faster growth in licensed spaces and more early childhood educators, many families will remain stuck on waitlists.”

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