Ontario, feds agree to 1-year child-care extension

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TORONTO — Ontario has won a one-year extension with the federal government of its national $10-a-day child care program, giving parents peace of mind that their fees won't go up for at least another 12 months, but there's still a lot of hard work to be done.

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The program, which reduces parents' fees for child care – currently averaging $19 a day in Ontario as an interim step towards $10 – was scheduled to end on March 31.

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Most provinces and territories signed extensions with the federal government ahead of this year's federal election, but Ontario signed only an agreement in principle to continue the program.

Ontario Education Minister Paul Calandra said the federal government needs to address the $2 billion-a-year shortfall that would arise if the current funding structure remains in place, and warned that parent fees would rise without additional funding.

The one-year extension for Ontario comes with $695 million in additional funding from Ottawa, which Calandra said means fees for parents won't increase next year, but it's not enough to further reduce the fee to $10 a day.

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Calandra says this is a great start and recognition from the federal government that more needs to be done.

“This is an admission on their part that it takes an additional $695 million every year just to maintain the $19 level,” he said in an interview.

“It's not going to bring us down to an average of $10. It's going to keep us at an average of $19 for the next year, and then we'll continue to work on how we can get that number down together.”

Extension talks didn't begin in earnest until recently, which has left some parents, operators and advocates nervous about what will happen to rates starting April 1, but Calandra said once talks started they didn't stop and both sides had a good working relationship.

Federal Work and Families Minister Patty Hajdu said she is optimistic about negotiations with Ontario to reach an agreement for future years.

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“I think there is, without a doubt, a desire at all levels of government to expand and protect child care,” she said in an interview. “This is a key element of affordability for many Canadian families.”

With the program anchored in Ontario for another year, Calandra said his focus – along with negotiations for a longer-term deal – will be on the mix of non-profit and for-profit providers in the system.

The province said the cap on commercial space in its deal with the federal government was hampering growth, with Peel Region alone forced to give up more than 2,000 potential spaces under the $10-a-day program because the operators were commercial.

The federal government now seems more open to discussing the issue, Calandra said.

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“At least they are now willing to look at this with us in the near future, which is light years ahead of where we were in the past,” he said. “I’m quite optimistic and moving forward.”

Hajdu said she is focused on high quality, which she said is often found in government and nonprofit systems.

“It's really a key element of a successful national childcare plan to ensure that the quality of care is consistent across the country,” she said.

When Ontario signed a child care deal with the federal government in 2022, it agreed to create 86,000 new places in the system by December 2026, which a financial accounting specialist said would still leave the province unable to meet demand for more than 220,000 places.

The province has only achieved about 75 per cent of its interim goal of creating space by the end of 2024, according to the auditor general.

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Additionally, while the number of registered early childhood educators in the system has increased, it is still below the province's target, and while the government estimated in 2022 that it would need 8,500 more preschools by 2026, the auditor said that figure has now risen to 10,000.

Daycare operators say one of the biggest challenges in creating new facilities and maintaining existing ones is a lack of staff. Ontario has introduced a wage floor for ECEs, but workers, advocates and some operators have called for better compensation, including a wage grid, to improve recruitment and retention.

Ontario officials have previously said the province cannot fund the wage system on its own, and Hajdu said Monday she is interested in working with Ontario to find “what resources are needed that are realistic and achievable to stabilize the entire sector.”

“I think we all agree that in order to have a strong and stable sector, we must pay and compensate fairly, and that ECE workers must have the desire to stay,” she said.

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