New study: Quebec mothers’ earnings kept rising for decades after $5-a-day daycare launched
Mothers in Quebec who had access to subsidized child care in the late 1990s are still earning more than their peers in other provinces, and the gap has grown wider with each passing decade. That’s the finding at the center of new research examined by Montreal Gazette columnist Jason Hanes, who reports that the earnings effect of Quebec’s child care program “grows substantially” over time rather than fading once children leave daycare.
The program in question is Quebec’s $5-a-day daycare system, launched in 1997 and now priced at $9.65 a day as of 2025. You might expect any income boost from subsidized care to level off once kids age out of the system. Instead, researchers tracking tax records found the opposite: the earnings gap between mothers who had access to the program and those who didn’t kept widening years, even decades, after their children moved on to grade school.
This matters for a policy debate that has never fully settled: does universal child care pay for itself, or does it just shift costs from parents to taxpayers? Quebec’s two-decade track record gives economists something rare: a long enough time horizon to answer that question with actual data instead of projections.
Key takeaways
- Mothers with access to Quebec’s subsidized daycare in the 1997 launch cohort show earnings gains that persist and grow at least 20 years after their children left the program, according to the research reviewed by Hanes.
- The daily rate has risen from $5 in 1997 to $9.65 in 2025, but it remains far below the $35 to $60 a day charged at unsubsidized private daycares, per Family Care data.
- Quebec’s childcare tax credit still covers 67% to 78% of eligible expenses depending on family income, according to the Ministère des Finances, on top of the subsidized rate.
- If you’re budgeting for care in Quebec, factor in the sliding-scale surcharge: families with net income above $158,820 pay an additional daily amount capped near $12.45 on top of the base rate.
- Compare your household’s daycare costs against both the subsidized CPE rate and private options before deciding, since unsubsidized spots can cost four to six times more per year.
How researchers tracked earnings effects across two decades of data
The 1997 policy launch and the cohorts studied
Quebec introduced $5-a-day daycare in 1997, one of the first jurisdictions in North America to attempt universal, heavily subsidized early childhood care at scale. The program created a natural experiment: mothers whose children were young enough to use the new system could be compared against mothers in other provinces, or against slightly older Quebec cohorts whose kids missed the window.
Researchers used this timing to build cohorts around the launch date, tracking families whose children entered daycare in the years immediately following 1997 against those who didn’t have access. That structure lets economists isolate the effect of the subsidy itself rather than broader economic trends affecting all Canadian mothers equally.
Comparing income tax records before and after subsidized daycare
The study relied on income tax records spanning roughly two decades, comparing mothers’ earnings trajectories before their children entered daycare, during the subsidized years, and long after. This approach avoids the weakness of survey-based research, which depends on self-reported income and shorter follow-up windows.
Tax data lets researchers see actual reported earnings year by year, rather than a snapshot. That longitudinal structure is what revealed the widening gap: mothers who used the subsidized system in the late 1990s kept earning more relative to peers for years after their kids left daycare, not just during the years they were actually using it.
Why the earnings gap between mothers widened years after kids left daycare
You’d expect any income effect from subsidized child care to shrink over time as families adjust and non-subsidized mothers catch up. The data shows the reverse. According to the research cited by Hanes, the earnings gap between mothers with early access to Quebec’s program and those without it kept growing well after children aged out of daycare entirely.
The likely mechanism is career continuity. Mothers who stayed attached to the workforce during their children’s early years, instead of taking extended leaves or exiting entirely, avoided the wage penalties that come with career interruptions: lost seniority, skill atrophy, and reduced access to promotions. Over a 20-year horizon, those compounding effects add up.
“The earnings effect grows substantially” over time, Hanes writes, describing the study’s core finding on Quebec mothers’ long-term labor market outcomes.
This compounding pattern is strong evidence that Quebec’s program isn’t just a short-term labor supply bump. It appears to reshape career trajectories permanently for the mothers who use the system early.
Quebec’s $5-a-day daycare legacy: from $5 to $9.65 a day
How the sliding fee scale changed over time
Quebec’s flat $5-a-day rate held for years after the 1997 launch before the province moved toward a more complex pricing structure tied to family income. Under the current sliding scale, the reduced contribution starts as a base daily rate, but families with combined net income above a set threshold pay an additional surcharge.
For a family with combined net income at or above $158,820, that additional amount works out to roughly $12.45 per day, calculated as (1/260) multiplied by 3.9% of income above the $75,820 threshold, according to figures on the marginal effective tax rate created by the surcharge. The 260 figure represents the standard number of daycare days billed per year.
What today’s $9.65 rate means for family budgets in 2025
As of 2025, the base reduced rate at a subsidized CPE (centre de la petite enfance) sits at $9.65 a day, up from $9.35 in prior years, according to the Ministère des Finances. That works out to roughly $2,509 a year for a single child attending 260 days, before any income-based surcharge applies.
Compare that to unsubsidized private daycare, where daily fees range from $35 to $60, according to Family Care. At the low end of that range, a family would pay over $9,000 a year, roughly three and a half times the subsidized rate. At $60 a day, the gap widens to nearly six times the CPE cost.
| Care type | Daily rate (2025) | Annual cost (260 days) |
|---|---|---|
| Subsidized CPE (base rate) | $9.65 | ~$2,509 |
| Subsidized CPE (high-income surcharge, max) | up to $22.10 | ~$5,746 |
| Unsubsidized private daycare (low end) | $35 | ~$9,100 |
| Unsubsidized private daycare (high end) | $60 | ~$15,600 |
Quebec’s childcare tax credit softens the blow for families in unsubsidized spots, covering between 67% and 78% of eligible expenses depending on income, per the Ministère des Finances. But even after the credit, unsubsidized care typically costs more out of pocket than a CPE spot at the base rate.
The economic case: what the study means for universal child care policy debates
Comparing Quebec’s outcomes to other provinces without universal programs
Quebec remains the only Canadian province with a long-running universal child care system predating the federal $10-a-day daycare initiative that rolled out nationally starting in 2021. That head start is what makes Quebec’s data valuable: other provinces simply don’t have two decades of comparable tax records to study.
The federal program, modeled explicitly on Quebec’s approach, is still too new to produce equivalent long-term earnings data. Policymakers evaluating whether to expand or adjust that program are, in effect, relying on Quebec as the closest available proxy for what to expect 15 or 20 years out.
Labor force participation versus long-term earnings growth
Most existing child care research focuses on labor force participation, whether mothers work more hours or return to work sooner. That’s a simpler, shorter-term metric to measure. The Quebec study asks a harder question: did mothers earn more over a much longer window, not simply whether they worked at all.
The distinction matters for policy. A program that gets mothers back to work quickly but doesn’t affect long-term earnings has a different economic payoff than one that reshapes career trajectories for decades. Quebec’s data suggests it’s doing the latter, which changes the cost-benefit calculation for governments weighing the price tag of universal subsidized care against the tax revenue and reduced income-support spending it generates over a mother’s working life.
Where the research runs into limits
What the data cannot show about career choices and job quality
Tax records show earnings, not job satisfaction, working conditions, or whether mothers ended up in careers they’d have chosen without the subsidy pushing them back into the workforce sooner. The data can’t tell you whether higher earnings came from promotions, longer hours, or simply staying in the same job longer without a career break.
It also can’t isolate how much of the earnings gain reflects the daycare subsidy itself versus other Quebec-specific policies introduced around the same period, such as parental leave changes. Researchers control for what they can, but a single natural experiment can’t rule out every confounding factor.
Open questions for future studies
The study doesn’t yet explain the specific mechanism behind the widening gap: whether it’s driven by continuous job tenure, occupational shifts into higher-paying fields, or something else. Future research using more detailed employment records, not just tax data, could pin that down.
There’s also the open question of whether Quebec’s results would replicate at the national level under the federal $10-a-day program, given differences in provincial labor markets, wages, and existing child care infrastructure across Canada.
Frequently asked questions
How does subsidized daycare work in Quebec?
Quebec operates a network of subsidized centres (CPE) and subsidized home daycares where parents pay a reduced daily rate set by the province, currently $9.65 a day as of 2025. The government covers the remaining cost directly to the daycare provider, rather than reimbursing parents after the fact.
How much do parents get per child in Quebec?
Parents don’t receive a direct per-child payment; instead they pay a reduced daily rate at subsidized spots. Families using unsubsidized private daycare can claim a tax credit covering 67% to 78% of eligible expenses, depending on family income, according to the Ministère des Finances.
What is the new child care subsidy in 2026?
As of the available 2025 figures, the base subsidized rate is $9.65 a day, with a higher-income surcharge applying above the $75,820 net income threshold. Specific 2026 rate adjustments, if any, would follow the same sliding-scale formula the province has used in recent years.
Does Quebec have free childcare?
No. Quebec’s system is heavily subsidized but not free; parents pay a base daily rate, currently $9.65, with additional surcharges for higher-income families. Unsubsidized private daycare remains an option at market rates of $35 to $60 a day, according to Family Care.
How is the mothers’ earnings effect calculated?
Researchers compared income tax records for mothers in cohorts with access to subsidized daycare against those without it, tracking earnings before, during, and for roughly two decades after the daycare years. The gap in reported earnings between the two groups, and how it changed over time, forms the basis of the study’s findings.
If you’re a Quebec parent weighing daycare options today, the math still favors the subsidized route on cost alone. The long-term earnings data now gives it a stronger case on career grounds too.