Canada's $10-a-Day Childcare: How Smart Parents Are Investing the Savings in XEQT

I still remember the exact moment I saw our first daycare invoice. My wife and I had just moved our oldest off the waitlist and into a licensed centre in Ontario. The monthly fee: $1,800. For one child. Before food. Before the extra charges for sunscreen application and “enhanced programming” (which, as far as I could tell, meant they played with slightly fancier blocks).

I did the math at the kitchen table that night. $1,800 a month is $21,600 a year. That is more than my first year of university tuition, residence, and meal plan combined. I looked at my wife and said, “We are paying a mortgage-sized bill for someone to watch our toddler eat crayons.”

We made it work because we had to. We cut the travel budget, stopped eating out, and I will not lie – the XEQT contributions took a hit. Plenty of Canadian parents have lived this exact story.

Then the childcare fees started dropping.

Canada’s $10-a-day childcare program – officially the Canada-Wide Early Learning and Child Care (CWELCC) system – has been rolling out across the country, and the impact on family budgets has been massive. Our fees dropped by more than half. And suddenly, we had hundreds of dollars a month that we did not have before. Money that was not earmarked for anything. Money that felt, in the best possible way, like a windfall.

The question became: what do we do with it?

The answer, for our family, was obvious. We redirected it straight into XEQT.

This post is about why that decision might be the single best financial move available to Canadian parents right now, and exactly how to do it.

1. Canada’s $10-a-Day Childcare: What You Need to Know

If you are a parent of young children in Canada, you have probably heard about the CWELCC program. But the details – what it covers, where it applies, and how much you actually save – vary widely depending on your province. Let me break it down.

How the Program Works

In 2021, the federal government signed agreements with every province and territory to reduce regulated childcare fees to an average of $10 per day by 2025-2026. The program is funded through federal transfers to the provinces, which then reduce fees at participating licensed childcare centres.

The key details:

• Applies to regulated, licensed childcare – daycare centres, family daycares, and some before/after school programs
• Does not apply to nannies, informal babysitters, or unlicensed care
• Covers children aged 0-5 (some provinces extend to age 6 or include before/after school care for older children)
• Fee reductions are applied automatically at participating centres – you do not need to apply separately
• Most provinces have reached or are near the $10/day average as of 2026, though availability remains a challenge in some regions

What About Availability?

Here is the honest truth: the program is working well on the fee side, but the availability side is still catching up. Waitlists remain long in major urban centres like Toronto, Vancouver, and Montreal. Some parents are in the frustrating position of qualifying for $10-a-day care but not being able to find a spot.

If you are one of those parents still waiting for a spot, bookmark this article. When you do get in, you will want a plan for those savings.

For parents who are already benefiting from reduced fees, the savings are real and significant. Let me show you the numbers.

2. The Real Numbers: How Much Are Canadian Families Saving?

Childcare costs varied wildly across Canada before the CWELCC program, and so did the reductions. Here is a province-by-province look at where things stand.

Childcare Cost Reductions by Province

*Quebec has had its own subsidized childcare system since 1997, so the federal program has had less impact there.

The takeaway: If you live outside of Quebec and have a child in regulated daycare, you are likely saving somewhere between $500 and $1,500 per month compared to what you would have paid five years ago. That is not a rounding error. That is a life-changing amount of money.

For Families with Multiple Children

The savings multiply with each child in care. A family in Ontario with two children in regulated daycare could be saving $2,400 to $3,200 per month compared to pre-program fees. That is $28,800 to $38,400 per year in freed-up cash flow.

Even in lower-cost provinces, two kids in care could mean $800 to $1,400 per month in savings. We are talking about the equivalent of a car payment, a mortgage increase, or – and this is the point of this article – a serious investment contribution.

3. The “Found Money” Insight That Changes Everything

Here is the concept that I want you to sit with, because it is the key to this entire strategy.

These childcare savings are money you never had in your budget. You were already paying the old rates. Your household was already functioning on whatever was left after childcare costs. Your lifestyle, your spending habits, your budget – all of it was built around the higher fee.

When the fees dropped, your expenses dropped. But your income stayed the same.

This is what behavioural economists call a “windfall effect.” The money feels free because you were never counting on having it. And that makes it psychologically easier to invest than almost any other source of savings.

Think about it:

• Cutting your grocery budget by $500/month feels like deprivation. You notice it every day.
• Getting a $500/month raise and investing it requires discipline. The lifestyle creep pressure is real.
• Having your childcare fees drop by $500/month feels like a gift. You were already living without that money.

This is the golden window. The moment between “the fees went down” and “we adjusted our lifestyle to spend the extra money” is when you have the best chance of redirecting those dollars into something that will grow for decades.

If you have already absorbed the savings into your budget – eating out more, a nicer car, a bigger apartment – it is not too late. But it is harder to claw it back once spending habits adjust. The sooner you act, the easier this is.

4. What Your Childcare Savings Could Become in XEQT

This is the part that gets me genuinely excited, because the numbers are staggering.

Let me show you what happens when you take the childcare savings you are already receiving and invest them in XEQT – a globally diversified, all-equity ETF that holds over 9,000 stocks across 49 countries – for the duration of your children’s childhood.

I am using an 8% average annual return for these projections, which is consistent with XEQT’s underlying index performance over long historical periods. Returns are not guaranteed, of course, but this is a reasonable long-term assumption.

Compound Growth Projections: Childcare Savings Invested in XEQT

*Assumes 8% average annual return, compounded monthly. Does not account for taxes in non-registered accounts.

Read that table again. A family investing $1,000 per month – a realistic savings figure for a family in Ontario or BC with one child – could accumulate over $346,000 in 15 years. That is the approximate window from when your child enters daycare to when they finish high school.

For a two-child family investing $1,500 per month, the 15-year figure exceeds half a million dollars.

And here is the part that makes compound interest so powerful: more than half of that total is growth, not contributions. At $1,000/month for 15 years, you contribute $180,000 of your own money. The other $166,000 is compound growth – money your money earned while you were busy changing diapers and driving to soccer practice.

What Could That Money Mean for Your Family?

• $173,000 (15 years at $500/month): A substantial down payment on a home for your child, or four years of university fully funded
• $346,000 (15 years at $1,000/month): A complete home down payment in most Canadian cities, or financial independence for your family years earlier
• $519,000 (15 years at $1,500/month): Genuine generational wealth – the kind of money that changes a family’s trajectory

The childcare you are paying $10 a day for could fund your child’s entire financial head start in life. That is the power of taking “found money” and putting it to work.

5. Where to Put the Money: RESP, TFSA, or RRSP?

You have the savings. You know you want to invest in XEQT. But which account should you use? The answer depends on your goals, and the best strategy often involves more than one account.

Option 1: RESP (Registered Education Savings Plan)

If your children’s education is a priority – and for most parents it is – the RESP should be your first stop for a portion of your childcare savings.

Why the RESP is powerful:

• Free government money: The Canada Education Savings Grant (CESG) matches 20% of your contributions, up to $500 per year per child ($2,500 annual contribution to max it out)
• Tax-sheltered growth: All investment growth inside the RESP is tax-free until withdrawn
• Lower tax on withdrawal: When your child withdraws the growth for school, it is taxed in their hands – and students typically have little income, so the tax hit is minimal or zero

The CESG alone gives you an instant 20% return on the first $2,500 you contribute each year per child. No investment in the world matches that guaranteed return. I cover this in detail in my RESP investing guide.

Strategy: Contribute $2,500/year per child to max out the CESG, invested in XEQT. That is roughly $208/month per child. Direct this portion of your childcare savings to the RESP first.

Option 2: TFSA (Tax-Free Savings Account)

After maxing out the RESP grant, the TFSA is your most flexible option. Here is why:

• Tax-free growth: Just like the RESP, your XEQT investments grow tax-free
• Tax-free withdrawals: Unlike the RESP or RRSP, you can withdraw anytime for any reason with zero tax consequences
• No restrictions on use: The money can go toward your child’s future, your retirement, a family emergency, or anything else
• Contribution room carries forward: If you have unused TFSA room from previous years, you may have a significant amount of space available

For parents who want flexibility – maybe the money goes to your child’s education, maybe it funds a family home upgrade, maybe it becomes your early retirement fund – the TFSA is ideal. For a deeper comparison, see my guide on TFSA vs. RRSP for XEQT.

Option 3: RRSP (Registered Retirement Savings Plan)

The RRSP makes sense if you are in a higher tax bracket and want an immediate tax deduction:

• Upfront tax deduction: Contributions reduce your taxable income now, which can mean a significant refund
• The refund can be reinvested: Take that tax refund and put it right back into XEQT (in your TFSA or RESP)
• Tax-deferred growth: You pay tax when you withdraw in retirement, ideally at a lower rate

Strategy: If you are earning over $100,000 and your TFSA is maxed, the RRSP gives you the biggest tax benefit today. Invest the contribution in XEQT, then reinvest the tax refund.

The Recommended Split

Here is how I would allocate $1,000/month in childcare savings across accounts:

The exact split depends on your family’s situation, but the principle is the same: capture the free CESG money first, then fill your TFSA, then consider the RRSP or in-trust options.

6. How to Automate the Whole Thing (Set It and Forget It)

The best investment plan is one you do not have to think about. And with young kids, you definitely do not have the mental bandwidth to manually buy XEQT every month. I barely have the mental bandwidth to remember where I left my coffee.

Here is how to set up a fully automated system that turns your childcare savings into long-term wealth without any ongoing effort.

Step 1: Open Your Accounts on Wealthsimple

If you do not already have a Wealthsimple account, open one here and get $25 towards your first XEQT purchase. You can open a TFSA, RRSP, and RESP all in one place, commission-free.

Step 2: Set Up Automatic Deposits

Schedule a recurring deposit from your chequing account to your Wealthsimple accounts. Time it to hit right after your payday – before the money has a chance to disappear into lifestyle spending.

• Set the amount to match your childcare savings (or whatever portion you are investing)
• Match the frequency to your pay schedule – biweekly or monthly
• Spread across your accounts according to the split above

Step 3: Enable Auto-Invest for XEQT

This is the critical step. Wealthsimple’s auto-invest feature lets you automatically purchase XEQT (or any ETF) whenever cash hits your account. No logging in, no placing orders, no timing the market.

Set it once and your childcare savings flow automatically from your bank account into XEQT. The entire system runs on autopilot.

Step 4: Adjust Annually

Once a year – maybe when your child’s birthday rolls around, which is easy to remember – review the amounts:

• Did childcare fees change? Adjust the contribution.
• Did you get a raise? Consider increasing.
• Did a child age out of daycare? Redirect that money to your XEQT contributions instead of absorbing it into lifestyle spending.

That is it. Four steps, maybe thirty minutes of setup, and you have built a wealth machine that runs itself.

7. The Generational Wealth Angle: What This Could Mean for Your Children

Let me paint a picture of what this strategy looks like over a full generation.

Say you start investing $1,000/month of childcare savings when your child is two years old. You keep going until they are fourteen and the savings have fully wound down (either the program changes or your children age out of childcare). That is twelve years of contributions.

At 8% annual growth, your portfolio is worth roughly $240,000 when your child turns fourteen.

But here is the thing about compound growth – it does not stop when the contributions stop. If you leave that $240,000 invested in XEQT and do not touch it:

• When your child is 18 (4 more years of growth): ~$326,000
• When your child is 25 (11 more years): ~$518,000
• When your child is 30 (16 more years): ~$710,000

$710,000. From redirecting childcare savings into XEQT. Not from a six-figure salary. Not from an inheritance. Not from picking the next Tesla. From a government childcare program and the patience to let compound growth do its work.

That is the kind of money that changes a family’s story. It is the kind of head start that your parents probably could not give you – not because they did not love you, but because they did not have a $10-a-day childcare program handing them hundreds of extra dollars every month.

You have an opportunity that previous generations of Canadian parents did not have. The childcare savings are new. The accessible investing platforms are new. The combination of the two is a generational wealth-building window that is wide open right now.

For more on how to build a family wealth strategy, see my generational wealth guide.

8. “But We Need That Money for Other Expenses”

I hear this one a lot, and I want to address it honestly because it is a legitimate concern.

Life with young kids is expensive. The childcare fee reduction is real, but so are all the other costs: groceries, clothes they outgrow in three months, activities, the car seat that expires, the house that suddenly feels too small. When those fees dropped, it might have felt less like a windfall and more like a pressure valve – finally, some breathing room.

If your family genuinely needs every dollar of those savings to cover essential expenses, that is completely valid. This article is not about making you feel guilty for spending money on your family. Feed your kids. Keep the heat on. Handle the emergencies.

But I would challenge you to be honest about the difference between needs and wants when it comes to the childcare savings:

• Did your grocery bill actually go up by $800/month, or did you start buying more convenience foods and eating out more?
• Did you need the bigger car, or did the lower childcare fees make the payment feel affordable?
• Are the kids’ extracurricular activities essential, or did you sign them up because the budget suddenly had room?

There is no judgment here. We all do this – it is called lifestyle inflation, and it is completely natural. But if you can identify even $200-$300 of the childcare savings that quietly got absorbed into lifestyle spending rather than genuine needs, that is $200-$300 that could be growing in XEQT instead.

The Compromise Approach

You do not have to invest all of the savings. Here is a realistic split that many families find sustainable:

• 50% to current needs and quality of life: Activities for the kids, family outings, a slightly better grocery budget. You deserve to enjoy life.
• 30% to XEQT investing: Building long-term wealth for your family. This is the portion that will compound into something meaningful.
• 20% to emergency fund or debt repayment: If you have high-interest debt or a thin emergency fund, shore those up first.

On $1,000/month in childcare savings, that is $300/month into XEQT. Over 15 years at 8%, that $300/month becomes roughly $104,000. Not bad for money you did not even know you would have.

9. Your Step-by-Step Action Plan

You have read the projections. You understand the opportunity. Here is exactly what to do this week.

Step 1: Calculate Your Actual Savings

Log into your childcare centre’s parent portal or dig out your old invoices. What were you paying before the CWELCC reductions? What are you paying now? The difference is your childcare savings number.

Step 2: Decide How Much to Invest

Be realistic. If $500/month feels like too much, start with $200. The cost of waiting is real, but so is the cost of overcommitting and then stopping entirely because the amount was unsustainable.

Step 3: Choose Your Accounts

Follow the priority order from Section 5:

1. RESP (up to $208/month per child to max the CESG)
2. TFSA (for flexible, tax-free growth)
3. RRSP (if your TFSA is full and you want the deduction)

Step 4: Open Your Accounts and Automate

If you do not have a brokerage account, Wealthsimple is the easiest option for Canadian parents. Commission-free XEQT purchases, auto-invest, and you can manage your TFSA, RRSP, and RESP all in one app.

Set up the automatic deposits and auto-invest for XEQT. Twenty minutes. Do it during naptime.

Step 5: Talk to Your Partner

If you have a partner, get on the same page. Agree on the amount, the account split, and the commitment to not redirect the money back into lifestyle spending. As I wrote in my parental leave investing guide, the financial conversations you have early on as parents set the tone for decades of family wealth-building.

Step 6: Forget About It

Seriously. Once the automation is set, do not check the account every day. Do not panic when markets dip. Do not tinker. The whole point of XEQT is that it gives you global diversification in a single fund that rebalances itself. Your job is to keep contributing and let time do the heavy lifting.

Go play with your kids. The portfolio will take care of itself.

Step 7: Teach Your Kids What You Are Doing

When your children are old enough to understand, tell them about it. Show them the account. Explain how compound growth works. The financial literacy you pass along might be worth even more than the money itself. For ideas on how to start those conversations, check out my guide on teaching kids about investing.

10. The Bigger Picture: A Once-in-a-Generation Opportunity

I want to end with some perspective, because I think the significance of this moment is easy to miss when you are in the middle of the chaos of raising young kids.

Canada’s $10-a-day childcare program is one of the largest federal investments in families in decades. For the first time in most of our lifetimes, the government has meaningfully reduced one of the biggest expenses young families face. That is not a political statement – it is a financial fact, regardless of which party you vote for.

For previous generations of Canadian parents, childcare costs were simply a reality you absorbed. You paid $1,500 or $2,000 a month, you tightened the budget everywhere else, and by the time the kids were in school, you were behind on retirement savings, behind on the mortgage, behind on everything.

Your generation has a different option. You have the reduced fees. You have commission-free investing platforms. You have globally diversified ETFs like XEQT that give you the entire world’s stock market in a single purchase. And you have the power of compound interest working over a 15-to-20-year runway.

The parents who look back on this era and feel the best about their financial decisions will not be the ones who used the childcare savings to upgrade their SUV. They will be the ones who quietly, automatically, consistently redirected those savings into XEQT and let compound growth turn $10-a-day childcare into generational wealth.

You are reading this article. You understand the opportunity. Now go set up the automation and get back to the beautiful, exhausting, crayon-eating chaos of raising your kids.

The money will be there when you need it. And it will be a lot more than you put in.

Related Reading

• What Is XEQT? – Everything you need to know about Canada’s most popular all-equity ETF
• Investing in XEQT on Parental Leave – How to keep building wealth when your income drops during mat or pat leave
• RESP Investing with XEQT – The complete guide to maximizing your child’s education savings
• Investing for Kids: XEQT in a Trust Account – How to invest for your children beyond the RESP
• The Power of Compound Interest with XEQT – Why time in the market is your greatest advantage
• The Cost of Waiting to Invest in XEQT – The exact dollar cost of every month you delay

XEQT (iShares Core Equity ETF Portfolio) is a long-term investment. Returns are not guaranteed, and past performance does not predict future results. This article is for educational purposes and is not financial advice. Always consider your personal financial situation before making investment decisions.