Provinces knew the deal when they signed on to $10-a-day child care: Liberal minister

OTTAWA -

Provinces and territories had their "eyes wide open" when they signed on to the federal $10-a-day child-care program, says Families Minister Jenna Sudds.

Her assertion that they must now make it work comes amid growing pushback from daycares that say the program is going to make them go bankrupt. 

Operators in multiple provinces are threatening to pull out of the national child-care system or even close their doors. They say the federal-provincial agreements limit the fees they can charge while not providing enough support to cover all their costs. 

"It's been underfunded from the beginning," said Krystal Churcher, the chair of the Association of Alberta Childcare Entrepreneurs.

Churcher said Alberta operators are planning to start a series of "rolling closures" on Tuesday to draw attention to the problems that come with offering parents low-cost child care without ensuring the cost of delivery is still covered.

"You can't even buy coffee and a muffin for $10 a day," said Churcher. "We're walking out in protest."

A national, affordable daycare program has long been a Liberal promise, but it never got beyond the promise stage until 2021. 

That year, Finance Minister Chrystia Freeland's budget included a $30-billion, five-year offer to provinces and territories that signed agreements to deliver child care that would first cut fees in half, then cut them to $10 a day by 2025-26.

The program has become a signature policy for the Liberals, and one they boast about regularly, saying it contributes to the economy and helps women rejoin the workforce.

Every province and territory eventually signed on, most of them before the end of 2021. Ontario was the last hold-out, reaching an agreement at the end of March 2022. 

In exchange for the federal money, provinces had to implement the federal vision, which while cutting fees also sought to increase wages for child-care workers.

In every province and territory, operators have now had more than a full year of experience with the program in place. They say they're finding the funds coming in aren't enough to cover costs. 

The YMCA is asking Ontario for more money for its child-care programs, which account for one in five licensed spots across that province.

"Unfortunately, while cost savings are being offered to families, the cost burden on operators like the YMCA has grown," the charity said in a pre-budget submission to the Ontario government.

"This is because the current approach to revenue replacement funding is insufficient, leaving many non-profit operators with deficits and uncertain outlooks as we negotiate with each municipality for pressure funding."

A spokesperson for Ontario Education Minister Stephen Lecce told The Canadian Press earlier this month that the province would be seeking additional funds from Ottawa.

Finance Minister Chrystia Freeland did not open the door to agreeing to that when asked about it Monday.

"We put a huge amount of money on the table in the 2021 budget for early learning and child care," Freeland said. "We are committed to it, and are committed to fully implementing it."

Provinces signed on because it's good for their residents and good for their economies, she said. 

But Churcher said the program was rolled out too quickly, with high demands and not enough understanding of the impact.

She said her centre's fees were frozen when she signed on to the program, and it's those fees that now form the basis for provincial funding. 

Daycare providers in Alberta can charge parents a limited amount — an average of $15 a day at this point — and the province then pays them the difference, but only up to where fees were frozen. 

Funding for the program increases three per cent a year in Alberta.

Churcher said that is just not enough, given the added costs of inflation on food and utilities. She said there are also thousands of dollars in costs to have their finances audited each year to meet the requirements of the program.

At the Liberals' cabinet retreat in Montreal last week, Sudds went even further than Freeland in emphasizing the responsibility that provinces bear. 

"The provinces and territories entered into these agreements eyes wide open and knowing what the expectations were, knowing how many spaces we expected to be created and what dollars were on the table for them to work with," she said. 

"And I fully expect we'll continue working ... with them to ensure that this is successful."

This report by The Canadian Press was first published Jan. 29, 2024

With files from Allison Jones in Toronto