In 1997, the provincial government of Québec, the second most populous province in Canada, initiated a new child‐care policy. Licensed child‐care service providers began offering day‐care spaces at the reduced fee of $5.00 per day per child for children aged 4. By 2000, the policy applied to all children not in kindergarten. Using annual data (1993–2002) drawn from Statistics Canada's Survey of Labour and Income Dynamics, the results show that the policy had a large and statistically significant impact on the labor supply of mothers with preschool children.