Accessibility and Quality of Child Care Services in Quebec

These (link below in next paragraph) are slides from a recent webinar presentation I made along with colleagues from Équipe de recherche Qualité des contextes éducatifs de la petite enfance at UQAM. You can listen to the French version of my talk or the whole webinar

But, I have also reproduced most of that talk in English here:

Christa Japel has also done similar work here

Give Them an Inch and They’ll Take a Mile: The Story of For-Profit Child Care in Ontario

The Ministry of Education in Ontario is beginning to understand that they really can’t satisfy for-profit child care providers with anything less than the full cake and eat it too.  The Ontario government has bent over backwards to accommodate the for-profit child care operators; they want them to opt into the Canada-wide Early Learning and Child Care (CWELCC) system.  What has the Ministry done so far for the for-profit operators?

  • It changed the regulations so that municipalities (mandated to be Service System Managers) no longer have the discretion to sign purchase-of-service agreements only with not-for-profit providers (16 of the 47 had this type of provision);
  • It changed regulations so that measurement of quality in a centre could not be used as a criterion for eligiblity for CWELCC sign-up;
  • It completely gutted the new Management and Funding Guidelines for 2022 which the Ministry itself had established back in April.  The April version of the guidelines affirmed that municipalities should judge whether the funds given to operators in 2022 were based on actual costs.  In other words, the municipalities should judge whether operators had ineligible expenditures or excesssive profit claims.  The August Guidelines eliminated these provisions.
  • It ordered municipalities to collect very little financial data from operators.  The April version of the Guidelines said that “CMSMs/DSSABs are required to collect sufficient and detailed financial information from Licensees…. CMSMs/DSSABs will review all financial components including cost and expense line items for reasonability and eligibility, while ensuring CWELCC System objectives will be achieved….”  The August version of the Guidelines said “Information collected from Licensees to support implementation should be kept to the minimum amount necessary to meet the reporting requirements outlined in the CWELCC Guidelines….”

As of October 18th, the Ministry of Education has announced that the August 2022 Guidelines will continue for 2023; there will be few controls over how child care operators spend the revenues they receive from the CWELCC program.  Information collection will be kept to a minimum.  All of this despite the fact that, with a 50% cut in fees at the end of 2022, more than twice as much government money will be going to operators.

Ontario’s Action Plan (part of the CWELCC Agreement with the federal government) said there would be a revised allocation methodology in 2023.  That didn’t happen. Now, the new costs-based funding system will be in place for 2024.

But that’s not enough concessions as far as the for-profit operators are concerned.  They want more.  Sharon Siriboe, the director of the Ontario Association of Independent Childcare Centres wants guaranteed funding rules before for-profit operators will join the system.  “How can any small business remain viable and be asked to make such significant changes with only 14 months of clarity?”

What is the problem here?

Ontario signed an agreement with the federal government back in late March of 2022 – the Ontario-Canada Canada-wide Early Learning and Child Care Agreement.  In it, Ontario committed itself to the vision of building a largely not-for-profit system of accessible, affordable, inclusive child care services of high quality with federal money – $10 Billion of it over 4 years.

In Section 4.1 of that agreement, it states that “Ontario intends to maintain and build upon its existing robust accountability framework by introducing a further control mechanism. Ontario proposes to implement a cost control framework following the signing of the agreement that will be in place for all providers that opt into the Canada-wide ELCC system. The Parties are interested in approaches to ensure the sound and reasonable use of public funds, ensuring that costs and earnings of child care licensees that opt-in to the Canada-wide ELCC system are reasonable and that surplus earnings beyond reasonable earnings are directed towards improving child care services.”  

I don’t really like calling it a “cost control framework”.  It would be better to call it a “wise spending of public dollars” framework.  The objective is not to have costs that are as low as possible; the objective is to spend public dollars sensibly to achieve the objectives of affordability, accessibility and quality.  Ontario has agreed with the federal government that there will be a mechanism that ensures that all providers spend public funds wisely and that both the costs claimed by these providers and the earnings (profit) claimed by these providers are reasonable in achieving the objectives of this new child care system.

What is this new cost control/wise spending of public dollars framework?   Ontario tries to claim they have one already, but they don’t.  They have what we could call a fee control framework.  In other words, base fees for every operator are frozen at whatever their value was on March 27, 2022.  Each operator will get revenue from government equal to 25% of this base fee if they join CWELCC in 2022.  The operator will use these funds to backdate a 25% fee reduction to parents.  There will be another cut to fees at the end of December.  This will take fees down by 50% compared to the level they had in 2020. And, in 2023, operators will get revenues from government to cover these fee reductions for parents.  These rules control the fees charged by operators, but they in no way validate the costs and earnings that are covered by the new government revenues.  There is effectively no reporting on what these costs and earnings are.  There is no way to calculate the amount of surplus taken by operators, or to see how it is used.

That’s the way the for-profit operators like it.  No requirement for reporting on how the public funds they receive are spent until well into 2024.  Even then, only a requirement for an annual audit. No need to justify the salaries paid to management.  No need to justify the profits they claim each year, which are built into the fees they charge.  We know from the CCPA fees survey that for-profit operators in cities across Ontario charge higher fees than not-for-profits.  Their median fees are between 8% and 40% higher than the not-for-profits, depending on the municipality. Why?  Are these fee (and revenue) differentials justified?  The for-profit sector would prefer not to tell.  They don’t want detailed accountability for the public funds they receive.

I have recently argued that the Ministry of Education should be requiring all operators in 2023 to submit detailed budgets of planned expenditures.  These would be reconciled against actual spending (and profit) at the end of the year.  This, along with related operating data, could provide the detailed costs and spending information the Ministry of Education would need to design a new costs-based funding system.  But the Ministry doesn’t want to do that.  Instead they are giving the for-profit child care operators a free pass for another year.  The Ministry plans to develop a new costs-based funding system for 2024 with virtually no costs data upon which to build it.  And, the for-profit operators are even objecting to this.  They apparently want the free pass to continue for ever.

Why, you might wonder?  From an economic point of view, the position of the for-profit operators is quite rational.  They have a licence to provide child care services in Ontario and many of them make good money providing these services.  From now on, having a licence to provide child care services to children 0-5 in Ontario is going to mean receiving hundreds of thousands of dollars a year in guaranteed government funding; by September 2025, government-provided revenues will cover over 80% of the per-child costs of most centres. Access to this kind of government funding is scarce; not everyone can get a licence   In a similar situation in Quebec, some fixed-fee centres have been able to sell their licences to new operators for over a million dollars.  That’s not selling equipment or real estate; that’s just the price of buying the licence.  In Ontario, the fewer the reporting requirements, the fewer the controls over how operators spend their money, the fewer the controls on profit, the higher will be the price when you come to sell your licence.  Large big-box for-profit child care chains may be willing to pay top dollar for existing licences of small for-profit operators if there are very few controls on the reasonableness of costs and earnings.  So, the demands of the for-profit operators are rational; they’re just not very good for Ontario children, families and for the building of a financially accountable child care system.


The second theme in today’s publication by IRPP (see earlier blog post for the first) is what needs to happen now to make sure that $10 a day child care works out for families and children. There’s a tsunami of additional demand for child care on the horizon as child care fees plummet and we’re not ready for it. Many provinces have not placed much emphasis on expansion of not-for-profit child care spaces and haven’t provided the funding or tools necessary to make it happen.

In today’s publication, which is available here…



… I make the following recommendations to federal and provincial governments:

Rapidly expand not-for-profit and public child care facilities.  Provincial and territorial governments should provide substantial capital grants or loan guarantees to not-for-profit operators to accelerate a planned and coordinated expansion. Large jurisdictions should enable specialized development agencies to design, plan and build not-for-profit centres, and should encourage the delivery of more child care services by municipalities, colleges and school boards.

Increase the wages of early childhood educators. With little improvement in pay for child care educators in over 30 years, wages have to rise substantially to recruit and retain enough qualified early childhood educators to meet demand and maintain or improve staff-child ratios.

Be prepared to inject more funding. No one has yet addressed whether $9 Billion a year is enough money to provide universal $10 a day child care in all jurisdictions, especially those where child care fees have been particularly high for years (e.g., B.C., Alberta, and Ontario).  It probably isn’t. A cost-shared federal-provincial supplementary financing program in high-fee jurisdictions would make good fiscal and social sense, as governments get a substantial revenue boost from the increased labour force participation of mothers.

Close gaps in maternity and parental benefits. There is a stark difference in the coverage and generosity of maternity and parental benefits between Quebec, which has its own program, and the rest of Canada, which relies on federal Employment Insurance. The federal government should address these gaps as part of planned Employment Insurance reforms.  It should follow through on the Liberals’ 2019 election platform promise to ensure that parent who do not qualify for paid leave through EI receive income benefits during the first year of their child’s life.

Comparing Then and Now: Child Care and Child and Family Benefits

Here’s a quick summary of some key conclusions from my new study published by IRPP today – Early Learning and Child Care in Canada: Where Have We Come From, Where Are We Going?



Child care spacesPositiveThere were a lot more licensed child care spaces in 2019 than there were in 1986 — 7 times as many — serving a fairly stable number of children.
Children in centre carePositiveThe popularity and acceptance of licensed centre-based child care has increased dramatically. Back in the early 1980s, only about 10% of preschool children of employed mothers used centre care, 40% were in informal paid care and about 50% were cared for by family members. In 2019, about half of preschool children of employed parents were in centre care, 20% in paid family child care and 30% cared for by family members.
Full-day kindergartenPositiveKindergarten in public schools has moved from mostly half-days during the school year for 5-year-olds to being widely available for full schooldays to 4- and 5-year-olds.
Mothers in the workforcePositiveLabour force participation of mothers has increased substantially since 1986. For instance, in 1986 the labour force participation rate for mothers with the youngest child 3 to 5 years of age was 62%. Now, it is 78%. This is still below rates in Quebec or for mothers with older children.
Child care feesNegativeChild care fees have risen substantially over the period from the mid-1980s. In fact, using preschool fees as the marker and adjusting for inflation, typical child care centre fees are over $3,000 more expensive in Ontario, Alberta and Nova Scotia, and more than $2,000 more expensive in British Columbia and New Brunswick. Quebec and Manitoba have been notable exceptions.
Staff-child ratiosMixedIn most provinces and territories, legislated staff-child ratios for centre care have not changed very much since 1986. Quebec’s staff-child ratios for children younger than 3 years are the worst across jurisdictions. The only province or territory to have gotten pretty consistently worse in staff-child ratios from 1986 to 2019 is Alberta.
Funding for low-income familiesMixedFunding of child care services across Canada has changed dramatically over the years. Back in 1986, the main federal funding instrument was the Canada Assistance Plan, which funded child care subsidies. All provinces and territories had child care subsidy payment systems targeting lower-income families and children. More than half of all child care funding came in the form of subsidies — often much more than half. Nowadays, Quebec no longer has a child care subsidy program of this type. In other provinces and territories, child care subsidies now comprise about 40% of total funding. However, there were approximately twice as many children receiving low-income child care subsidies in 2019 as in 1986 (176,738 compared to approximately 82,000)
Funding for operatorsPositiveDirect operational funding to licensed/regulated child care services — to lower fees, to raise wages, to improve quality — was in 2019 a very substantial proportion of all funding. It was nearly 100% of Quebec’s funding, and 50% on average in other provinces and territories.
Child care expenses deductionPositiveThe Child Care Expenses Deduction allows earners to deduct work-related child care expenses from income before taxes are assessed. In 1986, the claimable limit was $2,000 per child. Now, limits are $8,000 annually for children 0 to 6 and $5,000 annually for children 7 to 15 years.
Maternity and parental benefitsPositiveParental benefits have changed very dramatically since 1986. There were no legislated parental benefits at that time, only 15 weeks of maternity benefits under Unemployment Insurance. Now, Quebec and the rest of Canada have different maternity and parental benefit schemes, offering different levels of income replacement and different amounts of benefits reserved for the non-birthing parent. The total length of benefits — maternity, parental, paternity — can exceed a year, and can now include self-employed parents.
Child care educator wagesMixedChild care staff were poorly paid in 1986 and they are still poorly paid. Data on child care workers’ compensation are sketchy, but the evidence suggests that child care wages have improved and that wage enhancement grants in various provinces and territories have had some effect. But the picture is uneven. In some of Canada’s largest provinces, where the bulk of child care educators are located, and compared with the average hourly earnings of other workers, the movement in wages over time has been small.
Federal child benefitsPositiveFederal child benefits are, without doubt, larger than they were in 1986. These benefits provide between $5,000 and $7,000 per child (depending on age) to families with low incomes and some amount of child benefits to nearly all families. These benefits have had an impact on child poverty and are a very significant boost to income for families with very low incomes.