Excerpts
This is Bridging the Divide, a column bringing together Canadians from different backgrounds and experiences to tackle pressing issues facing our country. We hope these unconventional pairings will inspire new ideas to make Canada a better place for everyone.
For more than 50 years, Canadians have been having too few children to replace the population. Now births have fallen to the lowest level on record.
That has major consequences for economic growth, government finances and the sustainability of a social welfare system designed for a much younger country. Today, Canada has more pet dogs than children under 16.
Researchers and advocates have long argued that governments should respond to falling fertility, though they do not agree on the best way to do so.
Ross McKitrick, a professor of economics at the University of Guelph, argues Canada needs an action plan to increase domestic fertility and proposes tax-and-transfer changes that reward larger families. Sitian Liu, an assistant professor of economics at Queen’s University, counters that policy should focus less on financial incentives and more on the conditions of parenting, such as affordable child care because those shape whether raising children is realistically possible.
Both agree that Canada faces a serious demographic challenge. They disagree on whether governments should try to boost birth rates directly or instead make parenting easier in the hope fertility will rise on its own.
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Ross McKitrick: Fertility rates are crashing around the world, and Canada is no exception. Yet there is a strange silence about the problem.
Canada needs a national conversation because we face real consequences if young Canadians cannot achieve their family ambitions. Our social welfare system was built for a time when a large workforce supported a small senior population. Now the population pyramid has inverted, and the system was never designed for that.
We should be experimenting with new tax, spending and financial incentives to see what works to remove the barriers to having children.
Sitian Liu: I don’t think we should rely on taxation or cash payments to encourage people to have more children. I support more family-friendly policies that make it easier for people to balance their work and life such as better access to child care, after-school care and improved parental leave policies.
Cash benefits and tax incentives can raise fertility in the short run only. Quebec’s allowance for newborn children, introduced in 1988, provided a lump-sum payment of up to $8,000 to Quebec residents with a newborn child. It increased Quebec’s fertility rates, in the short run but didn’t increase the total number of children that people had in their lifetime. Families decided to have children sooner rather than having more children.
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McKitrick: Certainly, the ability to navigate the work-life balance is critical. But we have to be careful with publicly funded child care that it doesn’t displace private child care. In Quebec, price controls drove many private child-care centres out of business. They reduced cost but also availability.
Liu: Daycare availability matters more than cash benefits. Many new families are immigrants and do not have relatives nearby to help. Even when they can afford it, they often cannot find a daycare space.
China’s experience shows that financial incentives alone are not enough to raise birth rates. The country has introduced annual cash payments for children under three, free preschool and local baby subsidies. But these have not been enough to change family decisions.
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If we want to encourage higher birth rates, we need to consider these issues together and focus on policies that address the real constraints on family formation, including parental leave, child care, after-school care and housing.
I would like to see gender-neutral family policies. Workplace flexibility can help families, but it can also create inequality because some workers choose jobs with better work-life balance in exchange for lower wages. That can widen income gaps. Family friendly policies that help all people balance work and family life may be a more durable way to support higher fertility over the long term.
McKitrick: I do not attach much importance to gender-neutral policies. The burden of having babies falls on women so there is nothing wrong with maternity benefits being primarily focused on them. I took paternity leave for both my children and valued the opportunity. But if a family decides the woman should take the full leave while the husband stays in the workforce, policy should not penalize that choice.
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