The CPC 'throw a tax credit at the problem' approach is regressive in this context; it rewards those of us who can afford to do things in the first place. It does nothing for those living paycheque to paycheque who simply can't afford the up-front costs of things. A tax credit doesn't fundamentally alter the raw affordability of childcare, and that's what's needed.
A couple have a child. Between the two of them they take a year of parental leave, maybe with some top up, maybe not, but then they have to figure out what happens once the kid turns 1. The kid needs to be cared for. Most of the time the mother is the primary caregiver. Most of the time the father has a higher income and higher earnings potential, so disproportionately it's women who stay home with the kid.
The couple facing this question at the one year mark needs to figure out whether childcare means a stay at home parent, or paying for childcare. If a parent stays at home, that's completely OK- but it does mean that that's one person, already in Canada, already with a home, who cannot take part much or at all in the workforce. That's a job that needs to be backfilled. That person isn't going to have much or any income and likely won't pay much or any income tax. The couple will have a lower income, less of a financial safety net, less ability to pay for, e.g., sports, other activities, etc. There's a greater likelihood the government will directly pay them through, e.g., the Canada Child Benefit.
Conversely, if there's affordable childcare, that couple may make the decision for the second parent to return to the workforce. They're now earning more income, can feed some of that back into the economy. Their Canada Child Benefit may reduce partially or completely. They'll contribute more to CPP, EI etc. A job will be filled by someone already in Canada who already has a home. That parent will have access to greater career growth. They may also be able to afford to have a second (or further additional) child. And 16, 17 years down the road, that kid is also someone living and housed in Canada in turn able to enter the labour market, initially filling those low skill, low pay jobs that we see a lot of TFWs being flown in to take.
So, this is very simplified, but it some of the considerations that go into how affordable childcare plays a role in our larger issues around population growth, labour force participation, temporary workers, and housing.
