Vouchers Look Pretty in Pink

Commentary, Frontier Centre, Healthcare, Housing Affordability, Poverty, Worth A Look

You may have missed the release of the federal Liberal’s Pink Book II last week. Certainly the Liberal Women’s Caucus new women’s platform was overshadowed by other female issues, such as the bizarre allegation that Tory MP James Moore was ogling lingerie models in the House of Commons or, more seriously, Liberal MP Belinda Stronach’s recent mastectomy.

But if you did miss it, you probably don’t realize that the Liberals have suddenly decided to endorse vouchers in lieu of direct government involvement in social programs. The reason? The Liberals claim government delivery of social services can be inefficient, poorly targeted, supply-constrained and limiting of choices for recipients. Better to leave it to the private sector.

This surprising new position represents a massive change in perspective for a party that has traditionally supported heavy centralization and government control over social programs at the expense of personal choice and the market. Medicare is a perfect case in point. So the voucher issue clearly deserves greater daylight. Unfortunately, further investigation suggests it is just a brief break in the clouds for the Liberals, and not a sign of any broader dawning of enlightenment or economic practicality. But at least it’s a start.

Pink Book II’s chapter on poverty notes that the traditional approach towards affordable housing has been direct government investment in subsidized apartments. It hasn’t worked. “Not only is the creation of new subsidized housing costly, but subsidized housing benefits only a small number of households who are in need,” the report states. The report notes that reliance on governmentsupplied housing creates supply constraints which in turn cause “lengthy wait lists and other restrictions.”

Instead of this top-down approach, Pink Book II argues in favour of a “portable shelter subsidy.” A simpler name would be a housing voucher. This could be a monthly cash benefit or a tax credit delivered to low income Canadians deemed in need of housing support. While housing is largely a provincial matter, and affordable housing itself can be a rather vague concept, vouchers are worth exploring in their own right.

With vouchers, recipients are freed to make their own choices. With respect to housing, they can choose where and how to live instead of being constrained by government building decisions. Such a system is more convenient and discreet for recipients, better targeted to those truly in need and far less expensive to run from a taxpayer’s point of view. Quebec, B.C. and Manitoba already have similar programs, as does New Zealand and Germany. The Federation of Rental-Housing Providers of Ontario has long advocated vouchers for that province. (Although the report’s claim that former Liberal housing minister Joe Fontana was an early advocate of vouchers is blatant revisionist history.)

To summarize, a new federal Liberal report eschews rent controls, publicly funded construction and all the other failed but doctrinaire government approaches to housing for the poor in favour of vouchers, choice and the free market. It is an acceptance of the practical over the ideological.
Yet this revelation inevitably leads to a much bigger question. If vouchers and choice are better than inefficient government-provided programs when it comes to affordable housing for women, why not take this logic on the road and really open ’er up? Strangely, the Liberals seem unable to apply their housing insights to other topics.

Elsewhere in the same document the Liberal’s Women’s Caucus blindly tout the notion of a $15-billion-ayear national daycare program — in essence a bigger version of what the last Liberal administration tried to create before it was defeated by the Conservatives. But the Martin government’s child care plan would have relied on centralized bureaucratic decision-making, discriminated against private sector operators plus a great many families and inevitably created massive queuing as has been the case with Quebec’s existing $7-a-day daycare. In short, every problem associated with affordable housing would be recreated in child care.

Now consider applying a housing voucher system to child care. If choice is pre-eminent, then governments have an obligation to support all forms of parental child-rearing. The Harper government has made a modest move in this direction with its Universal Child Care Benefit, providing $1,200 per year to families with young children regardless of their decision to either stay at home, hire a nanny or send their kid to a regulated daycare. Yet it remains a fact that parents who use formal daycare centres receive the vast bulk of government supports directed towards child care.

A true voucher system would involve equivalent subsidies for both stay-at-home and daycare families. Finland already has such a system. Finnish parents can decide to send their child to a formal daycare and pay a subsidized amount geared to income that tops out at about $300 per month. Or they can receive a monthly at-home child care allowance of approximately $425.

Measuring the success or failure of child care regimes can be a tricky business. But parents in Finland seem to love theirs. For children under two, almost twice as many families take the home allowance as compared to the child care subsidy. And even Sweden, that font of suffocating state control of children, is on the verge of implementing its own at-home benefit to relieve the burden on constrained government programs and to be fairer to all families.

As for long-run outcomes, the OECD’s recently released Programme for International Student Assessment (PISA) found that out of 57 countries and 400,000 students tested on their science knowledge it was voucher-friendly Finland that finished first overall. Sweden was a disappointing 22nd, sandwiched between Hungary and Poland. Canada finished third. What role did child care vouchers play in the PISA results? It’s hard to tell of course, although it seems obvious that state control of early education is no guarantee of future academic success.

If the Liberals think vouchers, choice and the private sector are sensible solutions to affordable housing problems, then such prescriptions should make equal sense in application to child care. And health care. And education. And the list goes on. Pink Book II’s “portable shelter subsidy” is something of a revelation for Liberals. Here’s hoping they can follow through on their own logic.

Peter Shawn Taylor is a freelance writer based in Waterloo, Ont.