Alberta not verifying daycare funds used to lower costs for parents: auditor general

Alberta's auditor general says the province isn't verifying whether daycare operators are using public funds to lower fees for parents.

Alberta’s auditor general says the provincial government has not done the work to ensure daycares getting public funds use them to lower fees for parents or top up staff wages.

Doug Wylie, in a report released Thursday, says without proper verification, Alberta could be overcompensating operators with federal and provincial funds meant to lower the average cost of daycare to $10 per day.

“There is a risk that public funds may not be used as intended — leading to parents overpaying for child-care and educators being under-compensated,” the report says.

Under the program, daycare operators sign funding agreements with the province based on the number of children attending the daycare and their ages. Daycares must then submit reports to the province to back up their claims.

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In reviewing documents submitted by 25 daycares, Wylie’s office found more than half delivered misleading numbers regarding things like attendance records. Some exaggerated the amount of time a child spent in care, and others filed duplicate records for each child.

There also were “significant issues” found in three cases. The report says in one case, inaccurate reporting led Alberta to overpay a daycare by roughly $26,000 in a month.

The report doesn’t include an overall estimate for how much funding may be misspent year-to-year, but notes that Alberta spent over $1 billion on child-care and daycare subsidies in 2023-24.

Wylie, in an interview, said it wasn’t the goal of his office to find an overall dollar figure.

Rather, the audit was focused on the efficacy of the government’s processes in monitoring the 2,600 facilities that receive funding, he said.

“In an ideal world, the way it should work is the department’s process should be able to identify those answers for you,” Wylie said of a potential dollar figure.

Similar to potentially not lowering parent fees, the report says the government also doesn’t have processes in place to ensure daycare operators use funding from a separate program to top up staff wages.

Beyond financial risks to families, Wylie said not having proper verification in place could lead to a lack of public trust in the program and others offered by governments.

“There’s a perception that those programs should be well run and the integrity should be top notch,” Wylie said.

Wylie’s office is recommending the government create new processes to verify claims made by daycare operators, and make sure operators are using their funding appropriately.

Education and Childcare Minister Demetrios Nicolaides, in a statement, said his office will work to address the issues in the report.

“I will be working with my department officials to implement a more streamlined and accountable claims system, among other tools to make sure our monitoring and performance measurement are based on accurate information,” Nicolaides said.

“We take the recommendations from the Office of the Auditor General seriously, and we thank them for their feedback on how we can strengthen accountability for public dollars to maximize its benefit to families and frontline educators.”

Diana Batten, the Opposition NDP’s children and family services critic, said the United Conservative Party government was failing parents.

She noted the province recently ended a separate daycare subsidy program that she said led to significant cost increases for many.

“Smith and her uncaring government have delivered a double hit to parents struggling to afford child care, making it even more expensive,” Batten said in a statement.

“It’s a failure to live up to their responsibility, improper management of public funds and it’s just cruel.”

The province replaced the subsidy program, which applied to more than 65,000 children, with an overall flat fee that applied to all children attending licensed daycares and family day homes.

Wylie’s office released a second report Thursday providing an update on a previous audit it undertook on a government support program for businesses affected by COVID-19 public health measures.

That report says an internal government audit found as much as $105 million could have been doled out to ineligible recipients, but Wylie’s office believed that number could be as high as $158 million.

Wylie’s report says the government is in the process of recovering $7.6 million, but has no further plans to try and claw back more.

Economy Minister Joseph Schow said in a statement that after reviewing nearly 2,000 cases, the government believes “the vast majority of applicants met program qualifications.”

This report by The Canadian Press was first published July 17, 2025.

Jack Farrell, The Canadian Press