Heather Sheen, a Toronto mother of two currently on maternity leave, worries about how her family will afford child care since finding out her toddler Hannah’s day care recently decided to opt out of the federal deal, a decision that will double her fees.Galit Rodan/The Globe and Mail
When Heather Sheen first enrolled her daughter in a daycare centre near her Toronto home in 2022, the young mother was paying $1,550 a month in fees. Thanks to Ontario signing on to the federal child-care deal that year, those fees have since been cut down by more than half, to just $685 a month.
Last week, however, she got the news she had been dreading: Her centre is dropping out of the federal program because of objections to the new cost-based funding model Ontario is introducing in January.
Whereas centres are currently being reimbursed for money they would have been paid in parent fees, operators in the new model will be receiving benchmark funding based on what the province says is the typical costs to operate child care, plus an average annual profit of 8 per cent.
But some for-profit operators have said the new formula unfairly limits how they can spend their money, which will diminish the quality of care they can offer. For that reason, Ms. Sheen’s daycare told parents it has decided to opt out of the Canada-Wide Early Learning and Child Care, or CWELCC, system, and fees are set to more than double in the new year.
Ontario presses Ottawa for more child-care money as some for-profit operators protest
Ms. Sheen, who is currently on maternity leave with her second child and earning employment insurance, said the update will be a financial shock to her family.
“Now all of a sudden, we’re going to be paying an arm and a leg for something that we haven’t been paying an arm and a leg for over two years now,” she said.
Growing pains in CWELCC are frustrating many parents. The federal program, which promised to cut child-care costs to an average of $10 a day by 2026, has seen fees reduced by at least 50 per cent across the country.
But with demand far exceeding supply, and many owners complaining of the administrative burdens of the program, a national group of private child-care owners say the current funding model should be replaced by one that sees money given directly to parents.
On the other hand, economists and researchers who support a public child-care system say that funding parents directly will do nothing to control costs or improve accessibility.
“We have a Canada tax benefit that’s already going out to families that’s income tested. That’s already a system that’s in place across the country. There’s no reason you couldn’t use that framework and add something in to it for child care,” said Krystal Churcher, co-chair of the AACE National Coalition of Child Care Operators, which represents mostly for-profit centres.
The organization is advocating for a “funding follows the family” approach that it says not only respects parental choice, but will reduce fees and cut administrative costs. That approach to funding would solve the problem for parents currently with children in a CWELCC centre who might face disruptions down the road, Krystal Churcher, co-chair of the organization, said.
“You might think this is great because you’re seeing these reductions in your fees and you have a great space. But what if you move? What if your child-care centre closes, or something happens at that centre and it’s no longer the right fit for your family? Where do you go?”
When Heather Sheen first enrolled her daughter in Toronto daycare centre in 2022, monthly fees were $1,550. The cost dropped to $685 a month after Ontario signed on to the federal child care deal that year, but she worries they will rise once again.Galit Rodan/The Globe and Mail
Ms. Sheen says it would be much better if parents were given child-care funding in the form of government vouchers or tax credits.
“I’d much rather have that direct parent reimbursement than nothing at all,” she said. “If it’s not working for all centres, they really have to make it work for the parents at the end of the day.”
But others argue that a free-market system, where parents are given money to do with as they please, is what we had prior to CWELCC, with Stephen Harper’s government sending cheques to families under the universal child-care benefit. But under that model, costs kept going up, and wait-lists were still long.
“The whole reason why this system came to the top of the political agenda is because people had huge problems in finding child care and getting child care, and getting good quality child care and affording it,” said Gordon Cleveland, an associate professor emeritus of economics at the University of Toronto Scarborough and a member of the federal government’s National Advisory Council on Early Learning and Child Care.
In September, Mr. Cleveland’s report titled Giving Parents Money Doesn’t Solve Child Care Problems, was published by the Prosperity Project, a registered charity dedicated to removing barriers of women’s participating in the economy. The report points out that a family allowance program that fully replaced that matched the amount the federal government is currently investing in CWELCC would mean sending families a minimum of $12,800 a year for each preschool child.
That would cost the federal government about $28.5-billion annually, according to the report – much more than the $27-billion-plus the feds are investing in CWELCC between 2021 and 2026. Dr. Cleveland also notes that getting rid of the current system and replacing it with a free-market approach where parents are given some money would mean no controls on fees charged by operators.
But those parents who are shut out of the system, or who, like Ms. Sheen, suddenly find themselves on the outside looking in, are understandably frustrated, Dr. Gordon acknowledged. That is why expansion of the current system must be a top priority, he said.
Marni Flaherty, interim chief executive officer of the Canadian Child Care Federation, a non-profit organization dedicated to improving child care and early learning, is unequivocal about what she says are the shortcomings of giving money directly to parents in a free-market system.
“It doesn’t support the development of a high quality, accessible, inclusive early learning and child-care system,” she said. “And it doesn’t increase choice for parents.”
As for Ms. Sheen, she is now scrambling to find an affordable space for her daughter, although she’s not optimistic.
“It’s going to be impossible to get in to another daycare that’s subsidized with only a month-and-a-half to find one,” she said.