While imperfect, the $10-a-day system has been widely applauded for making child care more affordable and equitable for more Canadians. And it looks like it’s here to stay, as legislation that commits the federal government to funding the system long term is poised to become law. However, the national daycare plan is facing some big challenges, including a still-limited number of spaces and the widely reported closures of child care centres that can’t cover their costs.
“Supply is still insufficient to meet the urgent demand for affordable child care spaces,” says Morna Ballantyne, executive director of Child Care Now, a group that advocates for publicly funded child care. “The early learning and child care sector is undergoing major change.”
Families who were fortunate enough to secure a subsidized spot for their child and receive rebates for their fees are estimated to save thousands per year: as much as $6,780 annually per child in Nova Scotia and $9,390 annually per child in British Columbia, for example. If a daycare centre were to pull out of the program, or even shut down, these families would be left scrambling to find affordable child care.
How $10-a-day daycare works
The goal of the national child care plan is to provide affordable and inclusive care for all families. To make this happen, provincial and territorial governments made funding deals that have rolled out in stages, starting with daycares that elected to join the program and freeze their fees in March of 2022. This was followed by a series of refunds to parents via a child care fee subsidy (whose details vary by province and territory). Currently, CWELCC-participating daycares continue to reduce their frozen fees, with a plan to get the cost down to $10 per day by 2026.
Why some daycares are pulling out of the program
Operators in multiple provinces are threatening to pull out of the system—and some have already gone back to their old private fee structure or closed their doors. They say the federal-provincial agreements, which limit the fees they can charge, are not providing enough funding to cover their costs. Daycares that opted in to the program at the outset are still receiving funding coverage to match their revenue at that time, but as inflation neared an annual average of 4% over 2023, the governments’ top-up of less than 3% has been insufficient. As a result, many daycares have faced a shortfall, and some say they have been saddled with unsustainable levels of debt.
A group of operators in Alberta, led by the Association of Alberta Childcare Entrepreneurs, held a series of rolling closures in early February to bring attention to the issue. The Alberta government has since promised changes to the funding model, including affordability grants and a streamlined payment process for daycare operators.
In Ontario, under the province’s current funding model, the YMCA, the largest licensed daycare provider in the province, says it’s running at a loss of $10,000 to $13,000 per year for each infant in its care. The YMCA has said it hoped to see a new funding formula in the fall of 2023, but that hasn’t materialized. A spokesperson for Ontario Education Minister Stephen Lecce has said the province is pushing for more federal money.
In other parts of the country, particularly in big cities where the cost of living is high, the story is much the same. An analysis by Cardus, a public policy group, said the rollout of child care expansion programs in British Columbia, Saskatchewan and New Brunswick have all been slow to start and have had underwhelming results. In its first year, New Brunswick only created 300 new child care spaces, which is barely a dent in its five-year target of 3,400 additional spots. While the funding to cover operating costs—which have been on the rise due to inflation—is a major piece of the puzzle in many areas, it’s just part of the problem. Staffing daycares is the other issue.
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