Stagnant funding for $10-a-day child-care has Ontario operators worried, advocates say

Ontario child-care operators that have opted in to $10-a-day care have been told their funding will remain the same for approximately another eight months, something advocates say is creating a challenge within the industry.

“We’re kind of playing a waiting game,” Carolyn Ferns, policy coordinator for Ontario Coalition For Better Childcare, told CTV News Toronto Thursday. “Meanwhile, childcare programs, they operate their budgets kind of right on a knife's edge, as one operator told me.

“They're really worried about what this means.”

Under the Canada-Wide Early Learning and Child Care (CWELCC) system, fees for parents were expected to drop to about 50 per cent of 2020 levels already.

A year ago, the province told participating child-care operators that they will cover the cost of any lost fees through 2023, at a cost of about $1.2 billion.

The funding approach caused concern for some operators, who said the funding doesn’t take inflation into account. According to Ferns, without the ability to increase parent fees to offset rising costs, programs will be impacted.

“What does that look like? It looks like child-care programs having to close a room because they can't staff, or limit their enrollment, because they can't staff,” she said. “If it continues like this, that's just going to get worse.”

It should be noted that no further reduction of childcare fees has been announced for 2024.

A memo sent to licenced operators in September, and obtained by CTV News Toronto, says that funding approach used by the provincial government over the last year will therefor remain in place for at least the first eight months of 2024. It says this is “pending the announcement of the new funding approach.”

“The ministry recognizes that licensees may be subject to cost escalation that is beyond their control (e.g. rent increases) and may feel that the revenue replacement funding approach could impact their capacity to participate in the CWELCC system,” the memo said.

“The ministry has heard this concern and intends to communicate further on this matter through the release of the 2024 funding allocations.”

Those allocations are targeted for early November 2023.

Ferns said the government has said there could be an additional allocation by the province of about 2.75 per cent to offset costs, but that still doesn’t quite make up for the inflationary costs of operating a child-care program.

The Bank of Canada announced this week it is holding its interest rate at five per cent.

“When they said they were making this a second transitional year, what they said was, ‘we're gonna give you exactly the same funding you had in 2022,’” Ferns said.

Officials within the Ministry of Education has said that funding allocations should be sufficient to support the full cost of reducing parent fees and improving compensation for registered early child-hood educators (RECES). Officials say the ministry is working with stakeholders and developing a new funding approach informed by data collected through a mini-survey, as well as feedback on the government’s discussion paper.

The Ontario Coalition For Better Childcare released a report last week showing that Ontario RECES are among the lowest paid in Canada, with wages at about $19 an hour.

Education Minister Stephen Lecce promised during the summer to work on increasing wages, but little information has been released.

Last week he said that an update on wage increases could come sometime in the fall.

COST OF CHILD CARE STILL HIGH IN GTA

A new report by the left-leaning think tank Canadian Centre for Policy Alternatives found that costs remain high within the Greater Toronto and Hamilton Area.

The report, which assessed Canada’s progress towards $10-a-day child-care, found that more than half of the 32 jurisdictions that agreed to CWELCC succeeded in reducing fees by 50 per cent. Of the 30 cities with data, half (14) had little to no spare capacity for an additional preschool-aged child. For infants and toddlers, little or no spare capacity was reported in 22 of the 30 cities.

“Overall, most Ontario cities achieved the federal 50 per cent fee reduction target in most age groups,” the report found.

“Hamilton didn’t quite reach the federal targets due to previous fee reductions and there were near-misses of the 50 per cent target in some of the wealthier Toronto suburbs—Oakville, Vaughan and Markham.”

These areas, the report found, had relatively high fees to begin with and had a high percentage of for-profit operators. The median preschool-age fees in Oakville, Vaughan and Toronto were reported to be about $600 a month, according to the report.

However, this is down from about $1,200 a month in 2020.

“Ontario, Alberta and B.C. cities crowd the high end of the list for 2023’s highest fees. Nevertheless, median fees in Ontario are much lower than they were in 2020. If Ontario had moved to $10 a day in 2023—as four other provinces and territories did—parents would have seen a much larger percentage drop, particularly as fees were very high to begin with.”

The government’s public plan involved reducing child-care fees by 52.75 per cent by the end of 2023. By September 2025, fees are expected to drop to an average of $10 a day.

It’s unclear how quickly this reduction is anticipated to happen, or what, if any, the 2024 goals will be.