New Deal for Families

The Canadian economy grew 108% since 1976, even after adjusting for inflation.  On average, this means it produces an extra $35,000 per household compared to 1976.

Yet the new reality for parents with preschool kids is a decline in the standard living.  Compared to the previous generation, young families have less time together, less household income after housing, and insufficient services to balance work and young kids.

This is a bad deal.  The Generation Raising Young Kids doesn’t get its share of the economic growth.  A New Deal will change this by providing a Time Dividend to families.

Just as the average dividend paid by Dow Jones Industrial stocks is 2.8%, a Time Dividend would ensure the generation raising young kids accesses 2.8% of the economic prosperity produced today compared to the mid-1970s.  2.8% equals $22 billion annually.

The Time Dividend will mean:

1. We put the family back into Canadian values, while acknowledging the diversity of households, and recognizing the very different circumstances facing parents today compared to the Baby Boomers.  This difference is particularly striking before kids reach school.

2. Spending more time together, and spending less on stuff.

3. Choices for women and men to contribute at home and on the job.

4. We enable and expect personal responsibility:  moms and dads alike will have enough time to raise their kids, and enough time to earn a living.

The Time Dividend requires three policy changes:

New Mom and New Dad Benefits will transform the uneven access to parental leave that is unaffordable and ignores dads into a benefit system that ensures all parents today have the time and resources to care personally for their newborns. How?

1. Extend parental leave from 12 months to 18 months, generally reserving the extra six months for dads (with exceptions for lone-parents and same-sex couples).

2. Make sure leave is affordable by insuring 80% of parents’ income up to $60,000 a year.  This increase will double the existing maximum benefit.  The new minimum benefit will be $440 weekly, enough to eradicate child and family poverty for this age group.

3. The benefits would be available to single- and dual-earner households regardless of parents’ attachment to the labour market, and would include the self-employed.  Moms and dads who currently do not qualify for leave would see their income increase by at least $14,000 in the 12 months following the birth of their child.

4. During a child’s first 18 months, parents will enjoy increased access to healthy child check-ins and parenting support to monitor for early developmental delays and to answer parents’ questions regarding children’s feeding, sleeping, crying, etc.

$10 a day child care services will remedy today’s epidemic of unregulated, unaffordable child care and early learning services to ensure that parents have enough employment time to manage the rising cost of housing and stalled household incomes. How?

  1. When the New Mom and Dad Benefits end, reduce child care service fees to no more than $10/day (full-time) and $7/day (part-time), making it free for families earning less than $40,000/year.
  2. Ample caregivers will be on site to ensure that kids spend their time in developmentally stimulating activities and play, including children with extra support needs.  Caregivers will have appropriate training in child development, and will be paid pay equity wages.
  3. The services will support healthy child development by supplementing, but never replacing, the care that families provide directly.  Families can choose to use the services regardless of parental employment.  Families will be able to access parenting support even if they do not choose to enrol their children in non-parental services.
  4. Where numbers permit, families can choose programs that feature a language other than English or French in recognition that Canadian families speak many languages at home.

Flex-time for employees and employers will remedy workplace standards that make it standard practice to ignore the family by ensuring all employees can choose to combine work and family successfully. How?

1. Overtime, Employment Insurance, and Canada Public Pension premiums paid by employers will be adapted to make it less costly for businesses to use employees up to 35 hours per week, and more costly for hours thereafter.

2. Overtime will kick in at 35 hours a week (averaged over a year).  Overtime premiums will be paid either as cash or earned time away from work.

3. With new incentives, employers will reduce the work week 3-5 hours on average for the half of men and the third of women who currently work more than 40 hours/week.  These employees will trade some after-tax wages (or future wage increases) in order to gain 4 more weeks of time per year.  In negotiation with employers, this time could be taken in chunks, or as earned hours away from work each week throughout the year.

4. Changes to the National Child Benefit Supplement will ensure any reduction in employment hours does not reduce income in low-earning families.  This may be especially important for some lone parent households.

5. Employees who currently work part-time hours will gain opportunities for more employment.

6. Within two-parent homes, flex-time may not change the total hours that parents work, but redistribute them more evenly between dads and moms.

Because Canadians are living longer, there are pressures to raise the official retirement age from 65 toward 70.  The New Deal does not reject this shift, but insists it must occur with greater appreciation for the time pressures facing employees when their children are young.  In other words, adults will trade some hours in retirment for more hours when their children are young.

Across the country, the three policy changes in the Time Dividend will cost Canadians $22 billion annually, before counting the immediate benefits, or considering from what programs we may re-allocate funding to pay for them.  For each Canadian adult, $22 billion a year means $2.20 per day, less than a cup of coffee and doughnut at Tim Horton’s.

$22 billion is about 1.25% of the Canadian economy.

It is about one-third of what Canadians currently pay for Old Age Security and RRSP subsidies.

Between 2002 and 2009, Canadians increased our public spending on medical care by more than $22 billion annually, after adjusting for inflation.  Clearly, $22 billion can be found for priorities.

Generation X-it

15 Responses to New Deal for Families

  1. Rhoda Taylor says:

    Brilliant, Let us know what we can do to help promote this!

  2. Chloe Perron says:

    As a mostly stay at home mom, often battling with the pressures to make just enough money to have my young son in part time daycare, so I can also enjoy working and contributing to our household, I found it immensely interesting to hear Mr Kershaw put into words the problems, frustrations and great challenges that my husband and I face every day since our son was born. Because I wasn’t able to find full time employment for the few years before we decided to have a baby (blame it on the economy if you will) I did not qualify for any parental benefits, meaning the pressure on my husband is immensely one sided to support us (as well as his disabled mother) while our son is small. Bring into that mix, that I actually like to work and would prefer to part time, but the cost of daycare out weighs that possibility. There just isn’t the money to pay for daycare so I can find a job, leaving us both often frustrated with the situation, my husband missing out on a lot of the joys of parenthood as he often works 12 hour days.
    Making parental leave affordable and manageable for families and daycare actually affordable would mean the overall benefits to mothers, fathers and children would be the best kind of life imaginable.
    Thank you for the great work and insight.

  3. Loreena Lambert says:

    This has truly explained why it seems like my husband and I seem to work so hard all the time and never seem to get anywhere. In fact we seem to be in a constant downward spiral in which the hole keeps getting deeper. With one young child we aren’t even just getting by anymore. It seems that it is just a matter of time until we could lose everything and all our hard work goes down the drain. We were so strapped for time and money already with commuting to work, student loans and with trying to afford a mortgage and now with a new young child the situation has got worse. Some may say it was your choice to have a child so now deal with it and I understand that but shouldn’t we all be able to have a family and still get by? I didn’t want to go through life without the experience and my husband and I are now paying the consequences. I love my child to the very core of my soul and would love to be able to give her more of my time and have even contemplated selling our house but then what kind of future will she have. At least if we can hang on we can at least give her our home at the end. I love this proposition for change and would like to help in anyway possible.

  4. Pingback: The Toll of Stress on Parents — and Kids - NYTimes.com

  5. As an American, I am positively drooling over your current state of affairs; TWELVE MONTHS of leave for a new baby? We get 12 weeks, unpaid, here in the grand ole’ US of A. Which is not to say I don’t agree with the arguments you make to expand Canada’s current support system for families, I just have one question: how do I become a Canadian citizen?

  6. Pingback: The Toll of Stress on Parents — and Kids

  7. Shelley says:

    Hi –
    This idea was presented at the Legacy of Ideas: International Children’s Well-Being Symposium and the concepts are certainly intriguing. Much like the comments above, it seems to summate quite well the current situation that is at the heart of family functioning today. I only have a couple of comments for further synthesis of this new deal – to incorporate two very important concepts: fully defining the family and encouraging the community to come alongside parents to raise our children. I see that in order for this idea to gain traction, first we need to use inclusive language that depicts all possible scenarios that our families of today find themselves in – not just the traditional nuclear family. Secondly, we need to strongly ponder the options of expanding parental leave to include other family members, such as grandparents, aunts, uncles, etc. On this later point, although I am one of the minority to actually use the full year of both of the maternity leaves that I qualified for, it will not be something that I will be using in the future as we have our established family. However, with this said, as I think about the low statistics of parents that are currently using the full-year of the leave and the suggestion to extend this to 18 months, I would feel less stress if I as the Mom needed to take this full-time away from my career. A solution to resolve this stress, would be if it was not solely my partner that I could look to share this leave with, but perhaps my parents or extended family as well.
    Canada has some work to do in this area to truly measure up to other countries and I believe that this is a place to start. I appreciate that this is targeted for the Boomer generation, as they seem to be the ones who are getting out the vote and have a firm placeholder in the political domain. In my opinion, it will take someone with courage and a strong vision to legislate this change, so it is not easily buffeted with the changing leadership platforms. This is a new deal to champion for sure.

  8. Deb Szreier says:

    How can I help make this happen ?

  9. Michelle says:

    These are some great ideas. How can we promote this?

  10. Miriam says:

    Very good plan! It seems to me there is one additional element to be considered: Many baby boomers have been hit hard by the recession and need to work until they drop dead or retire at 80 (seriously), so that they don’t become an additional and costly burden to their children. What do you suggest in this regard?

  11. Julie says:

    We need the government to step up and make this plan a reality right now!

  12. Gordana says:

    My thoughts after reading:

    There is so much talk about encouraging women to work in science, engineering and technology. An image of women in these professions is painted to match the current men image (long hours, career development on the expense of personal life, main focus on work etc.). But, for the equality to be real, both images have to adjust. Men have to take a bigger role in the caring for children such as parental leave, taking time of work when children are sick etc. Until this happens, no government spending will be approved for the childcare. There are about 20% women sitting in the parliament and it has been like that for the last 20 years.

    I like the suggested changes. We need to start putting our personal lives on the same level with our careers. The successful career should include the balance between the work and play for everybody.

  13. DeAnna says:

    So what exactly is this Time Dividend? And how exactly is this plan being paid for? I have not been able to find anything in the literature on that.

  14. Kristina H says:

    Would love to see this plan in effect in the next year or two…what has taken Canada so long to come up with what seems to me like a great soloution to a nation wide problem…countries in Europe have had something similar in place for years and it’s about time that we caught up so that families aren’t constantly streesed about daycare and money issues. Canada should be promoting having families, but it is becoming extremely difficult and many people are deciding to not have children because of the realated costs associated with it.

  15. I would like to invite you to the Early Childhood Development Community in Facebook:
    https://www.facebook.com/DesarrolloInfantilTemprano

    This is a space dedicated to promote early childhood development (ECD), in other words, the integral development of children between 0 and 6 years.

    Thank you and kind regards,

    Javier Sáenz Coré
    Content Curator
    Early Childhood Development Community
    https://www.facebook.com/DesarrolloInfantilTemprano
    https://twitter.com/DInfantilT

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