TD Bank said investing in early education programs will help Canada address the major economic threats its facing over the coming decades, including poverty, critical skills shortages and yawning productivity gaps that hold our economy back.
While the bank credits federal and provincial governments with providing funding for early childhood education, in most parts of Canada a large gap between the end of parental leave and the start of formal education exists, TD says, leaving parents on their own to bridge that gap.
"While governments at all levels are in no position to boost program spending at this time given budget constraints, this is one area that they should consider making a high priority over the medium term, as their finances move back into balance," the bank said.
Huge economic return
The report presents a compelling economic argument in favour of the notion. For every dollar that governments spend on early childhood education, TD says the economic return to society down the line ranges between $1.50 and $3. And "the benefit ratio for disadvantaged children [is] in the double digits," the report says.
"With an unquestionable number of positive effects, it is evident that more focus should be put on investing in, and improving, the early learning system."
Federal and provincial governments currently provide about $11 billion annually to early childhood education, but that's lagging well behind what other developed economies spend.
"To give a rough estimate, it would take an additional $3 to $4 billion of investment to bring Canada up to the average of other industrialized nations," the bank said.
At 0.25 per cent of GDP, Canada ranks last among English-speaking countries.
TD even questions why formal education doesn't begin until a child's fourth year. "This seems to be a legacy of a policy that was in place before we understood the degree of learning that takes place early in life."
Benefits outweigh costs
Data show that the earlier children are given access to high-quality education, the more likely they are to remain in the school system and succeed.
"It raises employment prospects and reduces duration of unemployment if it occurs," TD says. "At the end of the day, investment in education is the great enabler that leads to a stronger economy and society."
The bank cites a U.S. study that showed participants of an early childhood education program were less likely to smoke, drink alcohol, and use drugs, while they were more likely to own a home and a car later on.
Quebec currently provides the most comprehensive program in the country, with $7 per day child care for all children under 13.
"Studies show some positive effects following the implementation of the program, including a rise in the female participation rate from lowest to highest in Canada, moving above the national average on standardized test scores, an increase in fertility rates and a 50 per cent reduction in poverty," TD noted.
"Having an efficient, high-quality early childhood program in place, which is accessible for all children and affordable for parents, would be beneficial for children, parents as well as the broader economy," the report concludes.