Ten dollars a day for child care services? Say less! Ontario used to be alone in not having agreed to Trudeau’s plan for publicly funded national child care, but finally on Monday, March 28 2022, the $10.2 billion agreement was signed, after what some would call, an awful long wait. There were three main factors that held the Ontario Premier and Federal Government from signing the deal. These were, dealing with the mix of private and not-for-profit operators, balancing the amount of public and non-profit child programs, and ensuring we have enough Federal funds before, during and after the 5 year term.
Ontario’s government believes that they have made a smart choice by taking a while to sign the child care deal because our system is complex. We have a mix of private and not-for- profit operators. Non-profit organizations can be private foundations unless it is approved to be a public charity. Private operators don’t need outside directors, they are controlled by friends or family.
The Premier and Justin Trudeau took a long time to sign off on the deal because Ontario is now going to be involved in this with other provinces across Canada. They were cautious of making this event happen due to Ontario holding one fifth of child care spaces runned by for-profit corporations, charging the highest fees in our province. The Federal government estimated last year that cutting fees to $10 a day would save about $7,300 for a child. The deal will require the Provincial Government to create 86,000 new spaces by 2027, reduce fees by 50% in the first year, and down to $10 a day within five years, in exchange for Federal funding. Most Ontarians would agree that the Federal Government and the Premier have made a wise decision by taking their time rather than signing on a deal that they won’t be able to change until 2027.
The deal involves Ontario having to create 86,000 new child-care spaces, including $2.9 billion of saved money to extend the child care deal to six years. Provincial sources have been taking into account that there are affordability challenges for families across Canada due to the pandemic. This is proven by some of the well thought out actions made by the Provincial Government who is trying to make sure that this agreement will be fiscally sustainable. “A news release issued Monday by the Ontario Ministry of Education said the deal includes “flexibility to allocate federal funding in a way that will allow the province to deliver an average of $10 a day child care, including by spending the initial $10.2 billion over four years instead of five.”
No Government in the future will have to deal with having to fund a heavy share of the program, if the Government is able to keep up with the $30 billion budget in its “review mechanism’’ tool. This is a tool that can be implemented in the third year, to deal with the cost by asking for more money from taxpayers. On a good note, the deal will cut child care fees in the province by half by the end of the school year, meaning parents will get rebates for licensed child care. Inflation rates are going wild right now, but $10 a day will help parents have a break from deciding whether to buy that next dozen eggs, while providing significant investment for families. Furthermore, most Ontarians would agree that the economic effects of the pandemic will extend beyond 5 years, so perhaps a longer time period for this child care plan would be more beneficial. It will provide long term reassurance to those families who will still be struggling with the implications of the post pandemic life.
Premier Doug Ford of Ontario recognised that we were the only jurisdiction without the deal while Ottawa was desperate to sign it with us. It represented a large financial contribution due to Ontario having a lot of kids, which was one of the reasons they wanted it done. Ottawa allotted each province a per-capita share of the budgeted funding for the child-care agreements based on the population of children in each province. That amounts to $10.2 billion for Ontario, hence, why Ottawa was desperate to get us to sign the deal.
Ontario was dealing with lots of confusion whether to go with Ottawa’s deal, their choices were if they should limit new child-care funding to public and non-profit programs, or, put more for-profit businesses to run in public schools. All of this confusion resulted in help from the Progressive Conservatives. They began arguing that this offer didn’t take into account the three billion dollars a year that the province spends on full-day kindergarten for four or five year old children. They asked the Liberals, (based on how the political policy system works) to put aside $30 billion in last year’s budget and to campaign on a national child-care plan that would aim to create more spaces and reduce fees to $10 per day within five years. They simply agreed on this deal since they know they cannot order them to do anything.
This made municipalities direct more public funds to for- profit child care spaces, meaning this is not giving parents any financial flexibility. That was an argument Stephan Lecce stated to make Ottawa more cautious. It delayed the Premier and Federal Government from confirming their signature on the deal. When Karina Gould, the Federal Minister for families announced that Ontario still hadn’t signed the deal, it became a problem. It represented that Ontario wouldn’t have been able to be part of the meaningful negotiation of spending its share through Federal funding of $10.2 billion over five years. Ontario was alone in not being part of the deal; seven provinces and Yukon jumped on board in July and August, before the Federal election was called. Alberta joined in November, New Brunswick and Northwest Territories in December, and Nunavut at the end of January. This was when the Progressive Conservatives came in to try and find a solution to avoid Ontario from being alone.
Another thing keeping the Premier and the Federal Government from signing the deal was how Toronto mayor John Tory made a signature on a child care initiative this term, called the Ontario Child Care Tax Credit. This is a financial benefit modelled on a Quebec tax credit that drove up the development of for profit centers, but it only made costs rise for parents in Quebec. The child care deal is something that Canadians are totally up for, due to the fact it may extend beyond year 2027 because provincial sources were able to fit in a sixth year of saving up enough to contribute to solving affordability challenges for families across Canada.
According to a study done by Canadian child care experts and the Finance Minister, Ottawa sees Ontario as a heavy user of Federal funds to increase the number of for-profit child care spaces. Ontarians send more Federal tax dollars to Ottawa than what the Federal government directly spends in Ontario, including transfers to the provincial government. This is because Federals are responsible for significant services such as foreign affairs, employment insurances, banking Federal taxes, criminal law, and many more. Financial markets are investing in child care at an alarming rate. Large Canadian corporations are gobbling up small nurseries without investing in better services. Too often, programs are left heavily indebted and at risk of closing, the study found. Ontario is the last province or territory to join the national plan.
However there are some things that Ottawa helped Ontario with in order to convince them to sign the deal; Ottawa allotted each province a per-capita share of the budgeted funding for the child-care agreements based on the population of children in each province. That amounts to $10.2 billion for Ontario. Child-care staff deserve the same pay increases, as those in non-profit or public programs. Now with the child care deal in action, staff will be receiving those pay increases. A quarter of Ontario’s child care spots are run by for-profit businesses, meaning parents registered at those places were spending large amounts, but thankfully now with the child care deal signed, many families will get an overdue financial break. Across the board, the deals should add more than 250,000 subsidized, licensed child-care spaces across Canada within the next four years. Karina Gould the Federal Minister of families, children and social development, said that “other provinces who signed the child care deal before Ontario seemed to rush a little too soon and that they now complain of not having enough money to pay for extra spaces and programs to fit more kids.’’ Since Ontario thought this through by being the last, these provinces will have to discuss funding extra child care infrastructure.
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