Children's backpacks and shoes at a daycare in Langley, B.C., on May 29, 2018.DARRYL DYCK/The Canadian Press
The federal government is warning that increasing the number of for-profit child-care operators will create a two-tier system as Ontario pushes for more private providers to help alleviate lengthy waiting lists for families.
The dispute over how best to deliver child care under the federal government’s $10-a-day program is taking place as Ontario pledges to release a new funding formula that Education Minister Todd Smith says will “more accurately” reflect the true cost of child care in the province.
The province has so far created less than a third of the 86,000 spaces it committed to by 2026. Meanwhile, waiting lists have ballooned since the introduction of the program, which has already cut fees in half for parents at participating child-care centres and they are set to be lowered further to an average of $10 a day.
Jenna Sudds, federal Minister of Families, Children and Social Development, in a recent interview blamed Ontario for the lack of available child-care spaces, accusing the province of not giving operators clarity and predictability around what their funding is going to look like in the months and years to come.
“This lack of funding certainty for centres is just having this domino effect, in which the centres don’t have financial certainty, they’re not able to grow and waiting lists then of course continue to grow,” Ms. Sudds told The Globe and Mail.
“It would be an absolute let-down on behalf of the provincial government and a failure to families here in Ontario if they do not move forward quickly with this funding formula to ensure that these operators can stay open.”
She said research shows that non-profit child-care centres provide a higher quality of care where every dollar is reinvested in the centre, in the children and in the work force.
“In my role it is critical to ensure that public dollars are safeguarded, public dollars are well spent. I don’t believe we want to see a two-tier system in which we have private centres operating outside of the Canada-wide system,” she said.
“We’ve seen how private health care operations have gone, we’ve seen how long-term care that was privatized has gone in this province, and I think it is in the best interest of our province and of parents and children, to build this public system.”
Mr. Smith, meanwhile, says the federal government’s cap on for-profit spaces has meant that municipalities have had to turn down thousands of child-care spaces in the $10-a-day system, even as families struggle to secure a spot.
Last month, the minister sent a letter to Ms. Sudds, co-signed by the Association of Municipalities of Ontario, calling on her to lift the cap on for-profit spaces. The deal with the federal government commits to maintaining of 70 per cent non-profit spaces and 30 per cent for-profit spaces.
“I just believe regardless of the provider, families are looking for affordable, quality child care close to home, and that’s what I want to work with Minister Sudds to deliver on,” Mr. Smith told The Globe.
He said 96 per cent of for-profit operators own one or two child-care sites, and are small business owners in a sector that is predominantly female.
“There have been numerous municipalities across the province that have told us that because of the ratio that’s in place … that many municipalities are having to turn away child-care spaces and applications from child-care providers,” he said.
Mr. Smith, who took over the education portfolio in June from Stephen Lecce, said the provincial government will release a new funding formula likely in the next two weeks that will take effect next January.
“That will provide a lot more certainty, I believe, because we have taken the time to ensure that we’ve done it right,” Mr. Smith said.
In response to Mr. Smith’s letter about lifting the for-profit cap, Ms. Sudds said she is “open to having a conversation” with Ontario about the issue but asked for more data to understand the situation in the province. She also asked how Ontario intends to safeguard the use of public funds “so that they do not end up in the hands of private equity or multinational corporations?”
“I am not comfortable with creating a system that offers big businesses the opportunity to make big profits off of caring for children in Ontario,” she wrote.
In a follow-up letter sent to Mr. Smith on July 24, Association of Municipalities of Ontario president Colin Best reiterated the organization’s support for greater flexibility on the ratios of non-profit and for-profit operators. “This is a pragmatic approach that would remove a barrier to growth in the immediate term,” he wrote. But he also said there is a “critical need to support a healthy and robust non-profit child-care sector that is sustainable over the long-term.”
As of Dec. 31, 2023, more than 51,000 net new spaces for children aged 0-5 years old have been created since 2019, of which 25,500 were through the $10-a-day program.
Donna Spreitzer, executive director of advocacy group Toronto Community for Better Child Care, said the provincial government has underfunded the non-profit child-care sector and called on Ontario to beef up investments to keep centres afloat.
“This government, when they want to do something, they find money,” she said.
Ottawa and Alberta also had to sort through the issue of how much private operators can profit. About 67 per cent of daycare spaces in Alberta are run privately, making it an outlier from the rest of Canada. According to a deal signed in January, 2023, providers can generate a “reasonable profit” but the surplus earnings, or other resources, are to be directed toward improving child-care services rather than for the personal benefit of owners, members, investors, or to enhance asset growth.
With a report from The Canadian Press