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Our Responses to the Proposed Ontario Child Care Funding Formula Questions

Staffing Grant

  • The funding formula should be providing for significantly increased staff compensation to deal with the obvious crisis in retention and recruitment of staff – especially registered early childhood educators.  By basing the formula on the “average base wage rate”, there does not appear to be any intention to increase staff compensation levels to mitigate the crisis.  Instead, the method of assessing the “average wage rate” is very unclear and does not provide any assurance that the actual amounts provided would be sufficient to allow centres to operate comfortably, let alone expand.  
  • It would be more appropriate to establish a wage grid (that recognizes the qualifications, experience, and levels of responsibility of the staff) so that operators could be confident that they will actually receive wage rates at or above the amounts necessary to operate, plus provide for adequate benefits.
  • How are the wages of staff who have received director’s approvals calculated?  They may be counted by the ministry as RECEs but may be paid at lower rates.  This may affect the averages that the Ministry is seeking to use; in some cases, it may provide incentives for acquiring directors’ approvals.
  • Missing are allowances for training and professional development or coverage for absences for staff undertaking professional development.
  • Also missing are allowances for staff planning time and for team meeting time.
  • Change the operating days from 260 to however many days there are in a year.  For example in most years, most centres operate for 261 days and sometimes 262 days. If centres were funded for less than the number of days that they are obliged to open, this would result in a significant shortfall.
  • Staffing grants should be based on the expected number of hours and days that a centre will be open.  For example, kindergarten children don’t all attend full time during the summer and often, staffing levels are reduced at the beginnings and the ends of the day.  Staffing to the number of hours that the centre will be open will advantage centres were children attend for less than full-time hours; this may impact centres in priority areas in particular.
  • Not knowing the amount of the annual wage cost increase.
  • Variations in staffing costs are based on hours worked not just on the number of staff hired so this could be an implementation challenge.
  • There is no mention of “benefits” in the calculation of average wage.  Is this implicit or has it been excluded?  Also “average” benefits may vary across staff and may not dovetail with the “expected number of hours worked”.

Program Leadership Grant

  • Only one FTE supervisor and no assistant supervisor is insufficient.  This does not account for all the hours the centre is open and doesn’t address the need for more supervisory staff in larger centres.
  • Missing is an allowance for pedagogues that are above required ratios who are key to improving quality in programs.
  • There is no planning and team building time – an essential element of program leadership – in the funding formula proposal.
  • Supervisor’s wages appear to be based on past averages.  To ensure a healthy sector, it will be essential to ensure that supervisors receive increased recognition and compensation for their role.

Operations Grant

  • There does not appear to be any recognition of the considerably larger costs going forward that are due to administration and reporting requirements.  This should be an explicit part of the operating grant.
  • It seems that the operations grant for school boards will permit an allocation for licensed spaces + an additional amount for the gross floor areas occupied by child care.
  • There is an assumption that child care centres in community spaces do not need this additional component.  But, there are many child care programs in community centres, recreational facilities or other public spaces where children do use additional space.
  • No allowance seems to have been made for playground space either in this section or under the accommodations grant section.
  • Basing the funding formula on operating capacity, not licensed spaces, is not only short-sighted in terms of the long-term goals of the system to create spaces for all parents who need it, but it does not provide encouragement to operators to try to move forward positively with confidence.  
  • Basing the funding formula on licensed spaces (or known operating capacity because of certain situations) could be successful if MOE provided a reconciliation opportunity at the end of the fiscal year.  This would also be necessary as a way to prevent misuse of the system. 
  • Balancing encouragement with misuse of government funds will be a major implementation challenge.
  • It is extremely important that there be flexibility and discretion in the system so that programs are able to adapt to cultural situations.  
  • There should be funds readily available for staff and parents to access training in equity, diversity, and inclusion.  Such opportunities should be promoted by the Ministry.

  • The funding formula is silent on what will happen to future funding for children whose families receive child care subsidies.  This is a big problem.  There is no explicit commitment in the funding formula about the amount and distribution of money or number of families who will benefit from child care subsidies directed at low-income families and families otherwise in need.  We know that as the parent fee for licensed services is lowered, a larger and larger percentage of available spaces will be taken by families whose incomes are above subsidy-eligible levels. We also know that providing high quality care for subsidized children may take extra staff time and result in higher costs.  If the funding formula does not reward centres who take subsidized children with extra funding, subsidized children will tend to get squeezed out.  It may also be necessary to take other measures, such as reserving spaces for subsidized children, to ensure that children receiving child care subsidies and other prioritized children are at the front of the line for available spaces.

  • The new funding formula should restore local funding discretion, allowing municipalities with long subsidy waiting lists to direct more funding to these families, as well as allowing municipalities to direct more funding to children with special needs, to centres serving Indigenous children, to centres increasing accessibility for rural families, etc.  In this way, the program may have a chance of becoming culturally significant.

Accommodation Grant

  • The accommodation grant formula is based on gross floor area.  Does this include playground space?   Does it include other space regularly utilized by child care programs (such as gyms and other recreational facilities)?
  • How will this accommodation formula consider capital renewal and capital maintenance?  Will the typical rental rate be based on new facilities, old facilities or what?
  • There are many variations and nuances in calculating costs in a child care centre – including for accommodation.  For example, some centres may be licensed for 100 children but because of the staffing shortages, they are unable to operate 100 spaces.  They reduce their capacity to 79.  They have a 10-year lease and are still obliged to cover the costs of the full accommodation; or the landlord has given them a break so that they are not paying for the full cost of all the accommodation, but they still must pay maintenance and utilities.  Also, they may be able to expand during the year because they have managed to recruit and retain new staff members.  If they are only covered for operating costs, they will not be able to take advantage of these opportunities, but the Ministry may still have to pay additional costs for unused space and the associated costs of the unused space.  It would be much better to allow centres to operate to capacity and provide for reconciliation opportunities at year’s end.

It is time that the Ministry recognized that its mandate is to cover learning from “cradle to grave” – or at least to recognize that early learning and child care is a key component of our education system.  It should be Ministry policy that space in schools should automatically be allocated to early learning and child care programs.  Just like education from kindergarten to Grade 12, the Ministry should cover all of the costs of operating programs in the schools.  The practice (although varied across the province and by school boards) has been to allow school boards to treat child care programs as “revenue generators”.  This is a problem that sends a message to parents that early learning and child care is not important, it sends a message to child care operators and staff that they are second-class citizens in the system and it results in Ontario losing out on the important opportunities of child development!

One example is owners of real estate who understand that there is an early learning and child care program funded by the government and not enough space to meet demand.  Owners could demand excessive rents in these situations of scarcity.

Also, non-arm’s length owners (relatives/partners of for-profit operators) who own real estate could also demand higher rents for dedicated space because of scarcity. This is precisely why we need a capital grants program and a loan guarantee program for non-profit and public operators so they can establish viable premises at reasonable prices.

Yes in some circumstances. The accommodation (i.e., occupancy cost) formula should distinguish between for-profit and not-for-profit auspices.  For-profits may own their own building or may have a non-arm’s-length interest in the value of the property.  Accommodation funding may increase the value of their real estate in private hands.  Not-for-profits do not accrue these increases in value because their assets stay in public hands.  This suggests there should be very tight rules on accommodation grants for for-profits that have any financial interest in their premises, and looser rules on accommodation grants for not-for-profits.  It is not clear that the proposed funding formula will take these important considerations into account.

Scarcity of premises to locate new or expanded child care centres will put serious brakes on expansion at reasonable costs.

Service System Management Administration Grant

The proposed funding formula makes CMSMs and DSSABs into flow-through agencies for the distribution of funds, rather than service system managers.  Previously, CMSMs and DSSABs have played a key role in defining and funding local child care priorities.  The new funding formula should restore some of this local funding discretion, allowing municipalities with long subsidy waiting lists to direct more funding to these families, allowing other municipalities to direct more funding to children with special needs, to centres serving Indigenous children, to centres increasing accessibility for rural families, etc.

Because of the problems with many of the aspects of the propose funding formula, it is clear that the CMSMs/DSSABs will be spending an enormous amount of their time troubleshooting the difficulties and exceptions faced by centres as it relates to meeting their workforce compensation needs, their operating expenses and also their accommodation expenses.

In conclusion, this leads us back to our statement at the outset of our paper which states unequivocally that: Building Blocks for Child Care (b2c2) believes that the purpose of a child care funding formula is to, first and foremost, provide guarantees of appropriate levels of funding going forward to enable current programs to continue to operate effectively and to enable rapid growth in the not-for-profit and public sectors at the same time as there are robust cost controls to ensure that taxpayers’ money is being spent wisely.  As you can tell from our responses, we are not confident that this proposed funding formula will achieve these objectives.

Conclusion

In conclusion, this leads us back to our statement at the outset of our paper which states unequivocally that: Building Blocks for Child Care (b2c2) believes that the purpose of a child care funding formula is to, first and foremost, provide guarantees of appropriate levels of funding going forward to enable current programs to continue to operate effectively and to enable rapid growth in the not-for-profit and public sectors at the same time as there are robust cost controls to ensure that taxpayers’ money is being spent wisely.  As you can tell from our responses, we are not confident that this proposed funding formula will achieve these objectives.

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