Ontario cutting funding from daycare centres not in $10-a-day program

Ontario child-care centres not enrolled in the national $10-a-day program will soon lose provincial funding, which supports fee subsidies for low-income families and provides a $2-an-hour wage enhancement for staff.

In a memo to licensed operators, an assistant deputy minister of education outlined changes to provincial funding for the $10-a-day program. Starting in 2025, centres that opt out of the program will no longer receive routine funding, including “general operating, fee subsidy or wage enhancement grants.”

Families currently receiving fee subsidies will continue to do so until their child ages out or leaves their provider, but new families with children under five in non-participating centres will no longer have access to subsidies. Instead, that funding will be redirected to support the $10-a-day system to “ensure the success of that system,” the memo said.

The Ministry of Education recently introduced a new funding formula for centres in the $10-a-day program. This new approach is designed to cover actual costs and offer flexibility to operators, many of whom had struggled to keep their doors open under the previous funding model. While the changes may help stabilize the sector, operators remain concerned about long-term growth.

The decision to cut funding from non-participating centres will make it more difficult for them to operate and for families to access care outside the $10-a-day system, said Andrea Hannen, executive director of the Association of Day Care Operators of Ontario.

“When these centres lose access to provincial funding, including wage enhancements for staff and fee subsidies for families, they will either have to close or significantly raise their fees,” Hannen said. “This means fewer licensed child-care options for families with modest incomes.”

Centres in the $10-a-day program offer reduced fees for parents, while those outside the program have the flexibility to set fees based on operational costs, explained a spokesperson for Education Minister Jill Dunlop.

Ontario’s agreement with the federal government to join the $10-a-day program includes a commitment to create 86,000 new child-care spaces. So far, only 25,500 of the 51,000 new spaces created are within the $10-a-day system. The province blames a federal cap on the percentage of for-profit spaces, which municipalities say forces them to reject thousands of applications from for-profit operators.

“We continue to urge the federal government to lift the cap on for-profit providers, as it limits operators' ability to join the $10-a-day program and reduces the availability of affordable child-care spaces near families,” Dunlop’s spokesperson Edyta McKay said.

Federal Minister Jenna Sudds has indicated she is open to discussing the cap, but first wants more details on how Ontario is encouraging the creation of non-profit spaces, as the $10-a-day system is intended to be primarily public and non-profit.

Alana Powell, executive director of the Association of Early Childhood Educators of Ontario, expressed concern over the potential loss of the $2-an-hour wage enhancement for staff in non-participating centres.

“While we support the move toward a Canada-wide public system, any wage loss will be devastating for educators, especially given the current economic climate,” Powell said.

The wage enhancement, introduced in 2016 for registered early childhood educators and licensed child-care workers, has been vital to retaining staff. After Ontario joined the $10-a-day program, it set a wage floor for early childhood educators, which was later raised to $23.86 an hour following criticism that the pay was too low to address staffing shortages. Advocates continue to argue that this rate is insufficient to recruit and retain workers needed for the 86,000 promised new spaces.