Ontario and feds ink $10 a day child care deal. Here is what parents need to know

Ontario child-care fees will be reduced by up to 25 per cent as of April 2022 with a further 25 per cent reduction scheduled for December.

The imminent fee reductions for children ages five and under in licensed spaces are part of a $13.2 billion, six-year deal with the federal government to subsidize the cost of child care.

Ontario is the final province or territory to sign on to the national accord, which aims to further reduce fees to an average of $10 a day by Sept. 2025.

The deals with other provinces and territories stipulated that the money be spent over five years.

However, because Ontario’s deal was reached just days prior to the end of the fiscal year, an allowance was made for the province to defer the first year of funding into the second year of the agreement.

For a look at federal child-care deals signed with jurisdictions across Canada follow this link

That means that parents with children in daycare will essentially have to wait at least three months longer for fee relief than their counterparts in other provinces, most of which reduced fees by at least 25 per cent retroactive to Jan. 1.

In Ontario the fee reduction will be retroactive to April 1, with rebates to parents expected to begin in May when the province is in the midst of an election campaign.

It should be noted that some parents might have to wait longer as the province works with municipalities to enroll the more than 5,000 licenced childcare centres and home care agencies in Ontario in the program between now and September.

“Individual operators will have to enroll in the program but parents themselves will not, they will receive an automatic benefit and savings on a monthly basis,” Education Minister Stephen Lecce told reporters during a press conference at a Brampton child care centre on Monday. “Operators will make that decision, they have to do so before September and within 60 days of that decision the expectation and part of this agreement codifies it, is that those savings would trickle down to the parents, to the consumer.”

Trudeau says Ontario didn’t get more money compared to other provinces

Ontario ultimately ended up getting the same $10.2 billion in funding over five years that it was offered at the outset of negotiations with the federal government, a sum that Lecce previously argued wouldn’t be sufficient to reduce fees to an average of $10 a day.

But the feds did clarify that the province will receive an additional $2.9 billion in the sixth year of the agreement.

The Trudeau government had always said that it would provide $9.2 billion in ongoing funding to keep childcare costs low after 2025 but it didn’t make specific commitments in the individual deals with other provinces and territories, as it did with Ontario.

During Monday’s press conference Lecce argued that the sixth year of funding amounts to an additional $600 million per year for Ontario but Prime Minister Justin Trudeau pointed out that the province’s isn’t receiving more than it’s population based share of the federal dollars. 

Trudeau said that ultimately families in Ontario will end up “with the same quality of deal” as parents in other provinces, many of which signed on to the accord last summer and are getting relief sooner as a result. 

“Ontario's allocation was $10.2 billion (over five years) as we calculated it almost a year ago and that's exactly what this deal is. But the focus that we had is respecting and understanding that every province has a different system coming into this deal and requires different levels of flexibilities and different provinces got different levels of flexibility,” Trudeau said. “Ontario, for example, wanted in writing the deal for the sixth year, and we were happy to sign up because as you may remember when we announced this childcare funding, it was permanent funding. So all the other provinces also know that they will get funding on the sixth year the seventh year, on the 10th year on the 20th year.”

Opposition criticizes Ford over delay

The bilateral child care agreement, which was formally signed on Monday, brings an end to months of negotiations which often played out in public.

Members of the Ford government initially said that the child care accord failed to take into account the billions that Ontario spends on full-day kindergarten for four and five year olds.

Then in recent months they began to raise concerns about escalating costs that could leave Queen’s Park responsible for making up the difference.

In the end the feds did commit to what the province is billing as a “mandated financial review process” after the third year, which could see funding levels adjusted if costs prove to be higher than anticipated.

But it comes at the expense of a delayed rebate for parents who already have children in childcare.

As an example, Saskatchewan reduced fees by 50 per cent as of November and also plans to issue parents rebate cheques retroactive to last July.

Speaking with reporters at Queen’s Park on Monday afternoon, Liberal Leader Steven Del Duca called the delay in reaching a deal “an epic failure” by the Ford government and a “horrible missed opportunity” to save families thousands of dollars.

“There's a federal partner who's been saying for a year ‘We have billions of dollars on the table, Ontario come and get it, Doug Ford come and get it’ and Doug Ford waited to be the very last one in line,” Del Duca said. “There is nothing there today. Literally there is nothing there that is over and above what could have been delivered months ago.”

Officials in Ontario have said that the 50 per cent reduction in fees will save parents an estimated $6,000 per child once it is fully implemented in December.

In a statement issued on Monday afternoon, NDP Leader Andrea Horwath said that the deal is “welcome news” for parents. Horwath, however, said that “by holding out for an extra nine months, Doug Ford didn’t get a better deal, he just robbed Ontario’s parents of nine months of lower prices.”

Meanwhile in a separate statement the Association of Day Care Operators of Ontario, which represents for profit providers, welcomed news of the deal.

The Ontario deal makes all licenced child care facilities eligible for the funding, unlike some of the other provincial deals which prioritize not-for-profit centres.

“We’re still working our way through the details of the agreement, but we were really pleased to see that Ontario has taken steps to help all families access child care that meets their needs,” Executive Director Andrea Hannen said in the statement. “All licensed centres can apply to participate the $10/day program, including those run as small businesses. This is really key. Without this provision, a lot of families would have been excluded."

In addition to the two 25 per cent fee reductions planned for 2022, the province says that there will also be further unspecified fee reductions in September, 2024 en route to achieving the $10 a day target in 2025.

As part of the agreement, the federal and provincial governments are also committing to creating 86,000 new child care spaces in Ontario by 2026. About 15,000 of those spaces have already been created since 2019.