Child Care Crisis in Ontario
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Ontario’s Manufactured Crisis
There is a crisis in Ontario’s child care system. Advocates are beginning to wonder whether this crisis has been deliberately manufactured by the Ontario government.
CWELCC had enormous promise
In April 2021 child care advocates, parents and educators were thrilled that a national child care program (Canada-wide Early Learning and Child Care or CWELCC) had been announced by the Liberal government in Ottawa. Champagne corks were popping! Finally, there was going to be $10 a day child care!
Of course, there were worries. Would it be accessible to everyone? Would it ensure that educators were well paid? Would it be high-quality? Everyone was ready to get down to work creating a system they’d spent years hoping for.
Despite the initial costs, this expensive program (initial promises were of $30 billion over 5 years) was meant to be an overall benefit to Canadian society because it would:
- Increase the labour-force participation of women
- Increase the education of children in crucial early years of childhood
- Help to make the opportunities of all children more equal ameliorating some of the disadvantages of poverty, racialization, and disability.
It is estimated that good, quality, affordable child care has an ROI of up to $6 for every dollar invested.
With the long-term benefits in mind, the federal and provincial governments made agreements for child care programs across the country. The Federal government pays for CWELCC in exchange for specific conditions in the agreements, and the provinces agree to administer the program while adhering to certain conditions.
Warned of the pitfalls
Child care advocates have been advocating for a system like CWELCC for over 50 years. Experts and economists have been studying how to do it and making recommendations for many years.
Not only did the government have research papers, briefs and models to rely on for advice, they also had a made-in-Canada example of this type of program and the pitfalls and potential problems with implementing it – Quebec’s much envied $5-a-day program. Quebec’s program started in 1997 so we have 25+ years of experience right next door to help plan for potential pitfalls and problems.
Quebec’s problems
So what did we learn from Quebec’s experience?
Explosion in Demand
The first thing that happened in Quebec was that there was a huge increase in parents that wanted child care for their kids. All of a sudden, there were a ton of parents (mostly mothers) who could afford to go back to work because they didn’t have to put almost all of their take-home pay towards child care fees. This is one of the main reasons for creating a child care program – more labour participation (and tax revenue) by women, so it’s a good problem to have, but a tricky one to solve.
Inequities in access
A huge number of families wanted $5-a-day-care but who were the types of families that got it? The poor, the immigrants, the racialized, and the uneducated families? Well, yes, but the well-educated, middle class or rich parents were first off the mark and got the best quality services. This led to criticisms of the program’s substantial inequities.
For-profits resulted in drop in quality
To deal with the increased demand, the government of Quebec introduced a new way of funding it by increasing tax credits for using for-profit child care ‘garderies’. The quality of child care fell dramatically. The previous Minister of Families in Quebec called it the “biggest mistake the Quebec government committed in the last 25 years.”
The Federal government, in its negotiations with the provinces, attempted to address these issues – putting limits on the proportion of for-profit centres in the system, starting slowly with only children of a certain age range, ensuring there was extra funding for “in need” areas and vulnerable populations.
The Government of Ontario held off serious negotiations until they were the last province left to strike a deal, and then they whittled these protections down as much as possible.
Administering the Program
Federal funding for CWELCC in Ontario alone is $10.2 billion. It’s a program that affects hundreds of thousands of families. The provincial Government should have expected that it was going to be an enormous challenge to get a major rejigging of the system done in a few years without any hiccups.
Ontario downloads the responsibility for administration of licensed child care to municipalities (the only province to do so). This isn’t a new development, but it means extra administrative duties for municipalities, for example: approving centres for CWELCC enrollment, calculating which areas are priorities for the allocation of spaces, putting out RFPs for new spaces, administering the “start-up” grants from the province, and lots more.
because parents are not paying the majority of the fees anymore, it does mean that the province has all the money and power in the administration of the child care programs.
It also means that because the province doesn’t have to administer the program, it has been incredibly opaque about how the program will be funded and how it will function, leaving municipalities scrambling to administer changes that are communicated late and without much detail.
Recently, it was announced that the transition funding for municipalities is being cut by $85.5 million this year, because despite the additional responsibilities, there was only administrative funding for a short transitional period. This leaves the administration of CWELCC in jeopardy just when the program is rolling out many of its biggest changes.
Crazy Waitlists
Anyone that’s done a high-school economics course understands the way supply and demand works – you drop the price of something and more people will want it. So why couldn’t the Ontario government grasp this simple concept?
There are countless stories of parents putting their names on child care waiting lists as soon as conception is confirmed – and those spaces still not being available when needed! Perhaps these stories are urban legends, but indications are that waiting lists are getting worse, not better. Statistics Canada put out a report showing that more parents are having difficulty finding child care than before the CWELCC program (36% in 2019 vs 49% in 2023). The same report found that 26% of children not in child care are on at least one waiting list, again, an increase since 2019.
Experts predicted demand of more than 2-3 times the amount Ontario had planned for in its child care program. This wasn’t just child care advocates throwing around wild numbers, the TD Bank was predicting an extra 315,000 spaces would be needed. The Ontario government’s program only planned for an increase of tens of thousands of spaces. The Ontario government didn’t even have to make their policy with untested forecasts, they had the example of Quebec, where demand for child care soared well beyond initial predictions.
Two years after the program started, we still have ridiculously long waiting lists and parents think the problem is the $10-a-day program instead of the way the government prepared and implemented CWELCC.
Severe Staff Shortages
Even if the demand for child care had remained at the levels the government predicted, there was already a severe shortage of Early Childhood Educators, meaning expansion of the system is doubly difficult. This continuing shortage ensures that any expansion in the child care sector will be a significant challenge.
Low pay overall
Early Childhood Educators (ECEs) have been paid a shamefully low wage for years. We pay garbage collectors more than we do educators with a diploma who are caring for and teaching our youngest children. There are not enough people willing to train to become ECEs and work in child care centres mainly because the job pays so little. Before CWELCC, many ECEs tolerated the low pay because they recognized that there was only so much that parents could pay for child care. Higher wages for ECEs would mean poorer parents wouldn’t be able to afford to have their children cared for, putting families into precarious financial positions.
At the start of CWELCC, this was the state of the labour market in child care; a chronically underpaid and overworked group of professionals, with more employers requiring their expertise as their numbers shrink.
Higher pay in other provinces
So what does the Ontario government do to attract more ECEs? It introduces a pitiful wage floor, leaving ECE wages lower than other provinces. The wage floor doesn’t help many of the ECEs in non-profits and public child care centres who tend to pay their ECEs a higher wage than the wage floor. In areas with a higher cost of living, the wage floor doesn’t pay a living wage. In a labour market where demand is exploding and most other provinces are paying higher wages, why would ECEs remain in Ontario? The situation is reflected in the number of centres that have physical space for more children, but not enough staff to care for them. This is obviously not the way to fix a severe staff shortage.
The shortage of ECEs is probably the foremost challenge facing the sector in Ontario. Without more qualified people willing to work in child care centres, waitlists will grow, quality will diminish, and an increase in spaces will never materialize.
The (Under) Funding of Centres
Before CWELCC, parents paid the lion’s share of the cost of child care. Of course, some parents had subsidies and there were always various tax benefits to having children. Centres could budget and set fees based on their costs and what parents could afford to pay. Since 2022 in CWELCC-enrolled centres, child care fees have been frozen for the centres but have been reduced by more than 50% to the parents, with the aim of an average cost to parents of $10 a day by 2026.
So how are child care centres paying their bills?
The Government still does not have a formula for calculating funding to centres. There have only been provisional and inadequate measures to help replace the reduction in parent fees.
For each centre, the Government took the fees charged in 2022 and are using that number as the basis for fee replacement, well below inflation increases for the last two years.
As we all know, costs have increased dramatically over the last couple of years and those increases have not been reflected in the fee replacement figures. Of course, the fee replacement model of funding means that more expensive centres are now getting more money, and the centres that were keeping their fees as low as possible, or who froze fees during the pandemic, are suffering.
Of course, on top of the other costs, the Government also created a wage floor for ECEs. So it provided a top-up to bring staff that were previously paid an amount below the floor up to the minimum. Sounds good, but what it means in practice is that centres that were already paying their staff well are now getting less funding than centres that were paying those insultingly low wages.
In 2022 the province commenced the reduction in parent fees – 50% by the end of 2023 – completely upending the way the system was funded. Since the program started, there has been little stability or certainty provided by the province. Child care operators were only told the amounts they would be funded with less than 8 weeks left in 2023 in order to budget for January 2024.
A funding formula might finally shed some light on how the financial side of the program will work, but we don’t have a final funding formula yet for a program that started in 2022. In the meantime they have cut transitional funding that allowed the municipalities to cope with all the administrative increases required under the new system – a system that they tore apart and are now only part of the way through reconstructing.
Expansion of Centres
Amidst the explosion in demand for child care spaces, and despite the severe staff shortages, and unstable funding, the child care system needs to undergo a monumental expansion, but the Government is expecting to budget for an increase of only 86,000 new spaces [Aside – they are counting this from 2019, but of course between 2019 and 2022 new spaces opened – the actual number of new spaces is closer to 50k ]. This expansion, it says, will happen by 2026, regardless of the fact that new child care centres often take multiple years to complete construction and open their doors.
For months, the Government refused to release any plans for expansion – not telling municipalities and child care operators which areas would be allocated funding for new child care spaces. When those space allocations were finally released, municipalities had scant time to put together a mechanism to fulfill the space allocations and centres had only a few weeks to put together applications to snag those space allocations.
There was no capital funding announced to build any new centres and there was no funding formula either. Centres had no way to estimate operational budgets for the new spaces and they certainly couldn’t apply for financing to build new child care centres for those spaces (child care centres often cost upwards of $2 million to build). The province did offer a laughable “start up funding” of up to $350,000 for new centres that just covers the costs of equipment and supplies..
For non-profit centres finding financing is very difficult, they are not like traditional businesses and very rarely are considered for mortgages or other methods of financing building projects or of acquiring real estate. This leaves only a very few large organizations with sufficient reserves and resources to begin projects to expand child care centres.
Unlike non-profit organizations, for-profit businesses have multiple vehicles for such projects, and they have applied for space allocations in large numbers across the province. It is only because of the CWELCC agreement’s condition that 70% of expansion must be in nonprofit and public centres that there has not been an explosion of new for-profit centres. How could it be any different without any funding or government-backed financing for non-profit centres that cannot access funds in the same way? The government has repeatedly ignored calls for support of capital projects in the child care sector, ensuring that their (already unrealistically low) expansion targets will not be met.
Where are we now?
The one shining success of the program is the reduction of fees. For parents with children in CWELCC spaces, child care is finally becoming affordable, many women can finally re-enter the labour force. And within the next two years fees are scheduled to drop even further. If the entire system doesn’t collapse beforehand.
The Ontario government has left us with a perfect storm of factors that will ensure the failure of the CWELCC agreement. There has been:
- Mismanagement of the administration of the program
- Lack of vital information about funding given to child care centres and municipalities making it impossible for anyone to budget for the future
- Paltry increases in wages for child care workers that will not alleviate the severe shortage in staff
- For-profit centres getting proportionately more funding than non-profit centres
- No support for capital projects to increase the number of spaces, despite soaring demand for child care
- An increase in children on waiting lists, frustrating the parents not already in the system
The result of this is told in multiple stories in the media: infant spaces closing, hardly any new centres planned, worsening accessibility to child care, longer waiting lists, staff leaving the profession, remaining staff exhausted and underpaid, centres dropping out of the program, more new for-profit spaces than non-profit spaces despite the agreement (indicating there may be a drop in the quality of child care in Ontario’s future). The child care sector is on the brink of collapse and the government has ignored all advice, and made it incredibly difficult for anyone within the sector to cope with the changes. The Ontario government is allowing the failure of CWELCC to happen on the backs of the poorest workers, our newest and tiniest citizens, and working families. We can only hope that families are so in love with their affordable child care that they are willing to fight to keep the CWELCC program going.