Ontario cancels $50M fund that helped child-care centres keep parent fees down

Thestar.com
May 2, 2019
Laurie Monsebraaten and Kristin Rushowy

Ontario is cutting $80 million from licensed child care across the province, including a $50 million fund that helped centres cover increasing labour costs and shield parents from fee increases.

The move has already led to at least one child-care centre in Peel Region telling parents their fees will increase -- up to an extra $72 a month for full-time infant care.

Ontario Education Minister Lisa Thompson speaks with a journalist at the Ontario Legislature in Toronto on August 1, 2018. When asked about the funding cancellation, Thompson mentioned the province’s recently announced child-care tax credit for families with incomes of up to $150,000.

More will likely follow, said Carolyn Ferns of the Ontario Coalition for Better Child Care.

“It’s supposed to help control child-care fees for Ontario families, so if it’s being cut by $50 million, that’s going to have a direct impact on costs for families,” she said. “The impact is going to be that parent fees are going to go up and Ontario families already pay the highest child-care fees in the country.”

Another $30 million in administrative cuts is also being squeezed from the system, according to an education ministry memo released this week that outlines almost $1.6 billion in child-care funding to municipalities for 2019.

Almost all of the province’s 47 municipalities and district social service administration boards will see less money for child care from the province this year, including Toronto, where almost $27.6 million is being cut, according to the memo.

“By our calculations, $40 million is gone from the general operating fund for licensed child care. And that’s not peanuts,” Ferns said Wednesday. “That’s money for fee subsidies and general operating costs. It’s the bread and butter.”

City officials, who are still trying to gauge the impact of the cuts, declined to comment Wednesday. Mayor John Tory is expected to address the issue later this week, a spokesperson said.

Toronto parents pay the highest fees in the country, with infant fees topping $2,000 a month.

The government’s so-called “fee stabilization support” was introduced last year by the former Liberal government when the minimum wage increased from $11.60 to $14 an hour. It helped to subsidize pay raises in daycares where staff earned less than $14 an hour, so the costs weren’t passed on to parents through higher fees.

Municipalities were told April 18 that the funding ended March 31 and that any money that flowed after that date “will be recovered,” the ministry memo said.

In the legislature Wednesday, New Democrat MPP Marit Stiles questioned the cuts.

“I don’t know why this government is in such a rush to get it so very wrong,” said Stiles (Davenport.)

The “abrupt end to this stabilization funding means that child-care facilities are being hit with massive changes to their funding formulas with absolutely no warning from this government,” she said. “Clearly this government has no idea how this change will impact Ontario families, because once again they haven’t consulted with the key stakeholders before they pull the funding.”

But Education Minister Lisa Thompson said the measure was one-time funding “put in place to correct a mistake that the former Liberal government made.”

She said Progressive Conservatives’ child-care changes are “getting it right once and for all for Ontario daycare,” noting the government is continuing a grant to enhance the wages of early childhood educators by $2 an hour.

As for parents, the government’s recently announced $390 million child-care tax credit will “be leaving, ultimately, more money in their pockets, (and give) parents flexibility, accessibility and affordability when it comes to obtaining care in Ontario.”

The tax credit, announced in the April budget, applies on a sliding scale to families with incomes of up to $150,000 and will provide a rebate of up to $6,000 per child under 7, and up to $3,750 per child between 7 and 16.

“We’re investing $2 billion,” Premier Doug Ford told the legislature. “We’re helping 300,000 families out there -- 300,000 families.”

But Liberal MPP Mitzie Hunter said the government’s changes are “hurting families and also destabilizing a system that they rely on.”

In addition to cutting funds to stabilize parent fees, the province is downloading more child-care costs to municipalities under a new 80-20 split -- without any consultations, she said.

“The Ford government has really shifted more of the burden of the cost to municipalities,” she told the Star. “It’s going to be felt by parents -- those fees are going to be passed on from the child-care centres to parents directly and going to drive the cost of child care up in this province.”
The child-care rebate “is fixed,” Hunter noted, and will cover less of parents’ costs as fees increase. “If you are driving up the costs of child-care in the province, you are destabilizing the whole system.”