Daycares risk closing across Ontario if the province doesn’t soon update how it pays them under the national $10-a-day program, the largest operator warns.
The call from the YMCA and other providers comes as the province seeks to significantly increase the number of child care spaces. When the Ontario government signed on to the program in 2022, it committed to creating 86,000 spaces, although the province’s fiscal watchdog estimates demand will outstrip supply by more than 220,000 spaces.
YMCA child care services account for a fifth of all licensed spaces in the province, and while the non-profit is a big supporter of the $10-a-day program, it says the way it is currently funded is not sustainable.
“Unfortunately, while savings have been provided to families, the financial burden on operators like the YMCA has increased,” the charity told the government in a pre-budget submission.
“This is because the current approach to income replacement funding is insufficient, leaving many not-for-profit operators with deficits and uncertain prospects as we negotiate funding under pressure with each municipality. . »
Financing on frozen prices
The fees parents pay for child care have been cut in half, with the provincial government replacing that revenue from child care centers using its share of federal funding that Ottawa distributed to provinces and territories when they joined the program.
But this calculation is not enough, say some operators.
Traditionally, child care centers increased parents’ fees when faced with increasing expenses such as staff costs, food costs, rent, heating and supplies. However, all operators wishing to join the plan had to freeze their rates in March 2022, and many voluntarily froze them in 2020, not wanting to increase rates during the COVID-19 pandemic.
This means that the government’s revenue replacement model is based on rates that do not reflect the true current cost of child care, operators say, and that the 2.1% increase that Ontario retained for 2024 to take inflation into account is not enough. This figure for 2023 was 2.75%.
“We’re hearing more and more operators who are ready to close their centers and leave the profession,” says Sharon Siriboe, director of the Ontario Independent Child Care Association, who also runs a center in Peel Region, West Toronto.
“While we have been successful in replacing income, it has not been enough for many operators as they continue to struggle to stay afloat in very difficult economic times. »
What the YMCA and others want to see is what they call a “full cost recovery” model.
Carolyn Ferns, policy coordinator for the Ontario Coalition for Better Child Care, said operators should be able to submit budgets and if costs are reasonable, they should be covered. “ [Le remplacement des revenus] was the only way they could have achieved it in the first place, she says. That was in 2022. It’s 2024 now and they haven’t changed the model. They didn’t understand. »
Jamison Steeve, director of strategy for the YMCA of Greater Toronto, said the YMCA had hoped to see a new funding formula in the fall of 2023, but that did not materialize. This needs to happen as soon as possible, Mr Steeve said, because at present the charity is essentially subsidizing the cost of care.
“ [Pour] an infant in our care, if subject to the current funding model, we would incur a loss of between $10,000 and $13,000 per year […] if the financing formula is not corrected in the future, he explains. It’s difficult for any provider in the nonprofit or for-profit sector to have this level of uncertainty from year to year about what the funding model will look like. »
More federal money?
A spokesperson for Ontario Education Minister Stephen Lecce said the province was pushing for more federal money.
“While Ontario will continue to increase funding for operators each year, starting this month we will begin a review of the federal agreement and vigorously advocate for a long-term increase in funding to better support operators and families,” wrote Isha Chaudhuri in a press release.
A spokesperson for Jenna Sudds, federal minister of families, children and social development, said the agreements reached when provinces and territories signed on to the program were designed to provide them with the flexibility to respond to inflation, and that funding increases every year.
“The Government of Canada continues to work with governments [provinciaux et territoriaux] to better understand their needs and challenges and support the successful implementation of a pan-Canadian system [d’apprentissage et de garde des jeunes enfants] », Explains the press release from Soraya Lemur.
Operators are also awaiting funding from the province to increase salaries for early childhood educators, as Mr. Lecce announced late last year. Meanwhile, a workforce crisis persists, with many centers – including the YMCA – unable to recruit and retain enough staff to operate at maximum capacity.
“You had staff working on the front lines during COVID-19 and a lot of them feel undervalued in this profession,” says Sharon Siriboe of the Ontario Independent Child Care Association. The way operators can at least incentivize staff to stay is to create a culture of appreciation and higher wages. »