Child-care operator wary of future amid funding eligibility changes

Some local operators are calling Alberta's decision to stop offering funds to new for-profit daycares "disappointing" after a cap was placed on new grants.

Alberta could run out of federally funded for-profit child-care spaces by this summer and, in anticipation, says it is limiting which new spaces receive the remaining dollars.

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Industry members were told this on Thursday via a letter signed by Jobs, Economy and Trade Minister Matt Jones, who would be switched in a cabinet shuffle the next day.

Under the Canada-Alberta Canada-Wide Early Learning and Child Care Agreement (CACWELCC), which the province signed in November 2021 and is set to expire on March 31, 2026, a cap of 26,200 child-care spaces are eligible for federal funding.

In the letter, Jones said Alberta’s requests for more flexibility have been denied, leaving the provincial government with the “difficult” decision about how to “best use” the remaining funding.

Effective May 15, affordability funding will be given first to existing for-profit programs that are creating space to meet a proven demand, as well as new private spaces in Grande Prairie, Red Deer, Lethbridge, Fort McMurray and Canmore/Banff, where there are long waitlists. The operators must be in the final stage of the licensing process and open on or before Sept. 30, unless they have a different timeline outlined in a Space Creation Grant Agreement with the province.

The change is necessary “to address the immediate pressure caused by the federal cap,” Jones’ letter read.

But an operator who planned to open a second daycare this fall says it jeopardizes quality care for families who have been waiting and the livelihoods of those who invested in starting a new business.

“What can you say to parents who are expecting affordable care, but now we can’t provide it?” asked Rhesa Palaypay, one of the founders of Trinity Early Learning Academy.

Palaypay plans to still open the new location in St. Albert, but isn’t yet sure how she is going to make that happen. She estimated she has invested $750,000 since January 2024 into the new business, which she said she started because her first facility, Klarvatten Daycare, couldn’t keep up with demand.

“It is quite an investment and a lot of risk for us – and not only me. To all child-care operators.”

The chair of the Alberta chapter of the Association of Childcare Entrepreneurs says this latest development only makes the rollout of the provincial-federal program a larger mess.

She called the program’s design around space quotas and targets, rather than program quality and operator support, a fatal flaw.

“It makes it really hard to even want to be in this space. It’s expensive, it’s risky, and your partner in it … the federal government, the provincial government, nobody communicates with each other,” Krystal Churcher told CTV News Edmonton on Wednesday.

“I think that we’re going to see a disaster in our child-care system over the next few years, where if we don’t correct it now, we’re going to have child care that is really declining in quality (and) we’re going to have children that are put in situations where there’s risk because the operators are brand new to this the field, and there’s not enough support.”

Alberta’s new education and childcare minister, Demetrios Nicolaides, on Wednesday reiterated the province needs to address the pressure caused by the federal cap, but said he’d be gathering feedback.

“I’ve been minister of childcare for maybe about three, four days, so one of the first things that I’ll be doing very shortly here is reaching out to many of those operators, advocacy organizations, umbrella groups, and chatting with them in a little more detail to try and get the best possible understanding of the pain points, challenges, concerns that we can work together to address them,” Nicolaides told reporters.

The province says licensed for-profit programs that don’t receive affordability funding can apply for wage top-up, professional development, and other kinds of funding for certified early childhood educators from the Alberta government.

New for-profit spaces that don’t meet this criteria won’t be eligible and parents who choose an ineligible program won’t see their fees reduced.

The change does not affect the non-profit program stream, nor the process and criteria for licensing. It also does not affect existing programs with an Affordability Grant or Space Creation Grant.

Alberta has not yet signed onto an extension of the CACWELCC.

Nicolaides said he wanted to have more robust discussions about Alberta’s needs during the renegotiation.

“I would suggest to operators, to parents, to the ministry, let’s not worry necessarily about reworking the program we’re in right now. We’re stuck here until March. Let’s make sure that we’re actually engaging with stakeholders and creating a really solid program and plan for April 1, because people are making business decisions right now,” Churcher said.

With files from CTV News Edmonton’s Chelan Skulski