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Friday 5 May 2006

The daycare lobby produces another slick piece of political propaganda

Princeton University’s online dictionary of English terms defines ‘confidence game’ as “a swindle in which you… persuade a person to buy worthless property.” That sounds a lot like what Canada’s massive daycare lobby is engaged in — and the intended victims are you and me.

The latest twist in this polished campaign to convince Canadians that they need to invest billions of their tax dollars in a state-run daycare monopoly came last week when the Caledon Institute, a social policy think-tank based in Ottawa, released a paper entitled The Incredible Shrinking Child Care Allowance. This remarkable document purports to expose the deficiencies of the Conservative government’s plan, announced in the May 2 budget, to provide parents with a child care allowance of 1,200 dollars per year for each child under the age of six.

The very name of this “report” ought to alert readers to the possibility that its author and the organization he represents have an axe to grind. Substituting invective for substance – a trade-mark tactic of the left – the title seems calculated to ridicule, rather than critique, the government’s proposals, a sure sign that its content lacks sufficient credibility to stand on its own.

The Incredible Shrinking Child Care Allowance includes, among its many recriminations, the accusation that low income families will receive very little real benefit from the allowance. To prove the point, the author “analyzes” the impact of taxes for families with various levels of net family income.

To the uninitiated, this methodology appears to be sound — but it’s not. Since net income is derived by subtracting allowable deductions from gross income, it is not a valid measurement of economic condition. Consider, for example, someone with a gross income of $100,000 and deductions totalling $70,000. That individual would report a net income of $30,000, but he can hardly be said to be living a life of privation. All taxpayers, without exception, automatically qualify for generous tax deductions, especially if they have children. In short, anyone with a net annual income of $30,000 always has a gross income of much more than this.

A second glaring error in Caledon’s “analysis” rests in its use of family income to calculate the impact of taxes on the proposed allowance. Once again, to the uninformed this seems sound enough, but as anyone who has had to prepare and file a tax return knows, individuals pay tax — not families. This is an important distinction. To be sure, there are families struggling to make ends meet with gross incomes of $30,000 or less, but because each partner receives the same basic deductions as everyone else, and because taxes are calculated on individual, not family, income, such a family would, in all likelihood, pay no tax at all on the child care allowance they receive because that allowance would be claimed as income to the partner who earns less.

The report goes on to contend that: “Most Canadian families need and use child care outside the home so that parents can work in the paid labour force or study.” One searches in vain for the source of this important statement. Could it be that it was omitted because it simply doesn’t exist?

According to Statistics Canada’s recent report entitled Child care: An eight year profile, 53.6 percent of children between 6 months and 5 years of age were in some form of “child care” in 2002-2003. (Statistical analyses usually lag a few years behind real time.) The term child care, however, refers in this case to all non-parental care, whether that care is provided in the home or not.  Of that 53.6 percent, 30 percent were cared for by relatives (Grandma, for instance) both inside and outside the home — the report does not break this down — while approximately 10 percent were definitely being cared for in their own homes by a non-relative.

Furthermore, the 53.6 percent figure represents children, not families, and is limited to those children who are of pre-school age. In other words, most Canadian families do not make child care arrangements outside of the home as the Caledon Institute report alleges.

What’s going on here?

The Caledon Institute was created, not to conduct independent, impartial research that decision-makers could then use to develop policy. On the contrary, it was created to advance a predetermined policy agenda, and its research is tailored to support that objective. In this respect, Caledon is no different than the myriad of similar taxpayer-funded “research” groups that emerged and flourished in the last decade or so. And to the credit of its participants, at least Caledon is honest about this. As its website reads: it “occasionally undertakes contract projects… on the basis that such work advances Caledon’s research agenda… (emphasis added).”

But agenda or no, as social scientists, Caledon’s researchers have an ethical responsibility to ensure that the material they produce meets minimum standards of academic integrity, something The Incredible Shrinking Child Care Allowance fails to do.

Although some journalists dutifully and solemnly reported the “findings” made by the Caledon Institute as fact, others that I spoke with refused, having recognized the document for what it is — a slick piece of political propaganda masquerading as science.

That’s too bad, because that itself was the real news.