For-Profit Operators Don’t Want Child Care to Be a Public Service for Families

There’s a new Canada-wide organization of for-profit child care operators that has just been formed in Calgary.  Appropriately enough, they were brought together by CIPR Communications, a PR and marketing company they have hired to state their case.  They don’t like the new Canada-Wide Early Learning and Child Care system that the federal government and all provincial and territorial governments have agreed to create (to complement Quebec’s system).  They don’t want you and other families to have $10 a day child care.

Instead, their new policy idea is the same as the much-tested and discredited old policy idea – fund the parents to buy child care at ever rising fees (if they can find it) instead of funding services to ensure that they are affordable and available for families.  See discussion of these ideas here, here and here.

They are aggrieved that federal, provincial and territorial governments across the country have agreed that the preference should be for the expansion of not-for-profit and public child care services.  These for-profit operators believe the preference for not-for-profit child care is ideologically driven.  However, the Globe and Mail editorial this week told us why not-for-profits are preferred: “Research here and in other countries has consistently shown that, on average, non-profit child-care centres deliver better care than for-profit ones.”  An important part of the reason is that for-profit child care has historically paid much lower wages to staff than has the not-for-profit sector. 

And the private operators don’t like financial accountability.  They are happy for the federal government to spend $10 billion a year on child care and for provinces and territories to pay a similar amount.  But they don’t want the financial accountability that goes along with the new child care agreements.  That’s why they prefer funding to go to parents – no need to report on or account for the 90% of your revenues that come from government.  No limitations on profit earned.  No limits on excessive spending.  No need to account for the government money that buys you assets that you can then sell to others.  Talk about pigs at the trough. 

I recently gave a webinar presentation on behalf of Building Blocks for Child Care.  Its focus was on expansion issues, but I talked quite a bit about the appropriate role of for-profit operators in building the new early learning and child care system.  Let me quote at length from that presentation:

“There can be a role for for-profit operators in a universal system. Having a certain percentage of for-profits is not NECESSARILY a deal-breaker.  … the key is that for-profits in our universal child care system must accept the rules of the game.  What do I mean by rules of the game? Early learning and child care is becoming a public service somewhat like health and education.  Child care will be largely publicly funded and must be accountable for the ways it spends public funds.  Value for money received. Early learning and child care will be affordable to parents, will be of high quality, will be universally available in a wide range of forms suited to children’s and parents’ needs and will be delivered mainly by not-for-profit and public licensees, with some delivery of services by private for-profit operators.

“Something like 80%-90% of an operator’s revenues will come from government. Operators will have to be financially accountable for these funds and transparent about how they spend them.  Some expenditures will not be legitimate and many will. There will be monitoring, quality evaluation, and extensive reporting requirements. That’s the way that a universal fixed-fee system has to work, but most for-profit operators seem not to accept these rules of the game.

“For-profit operators want very few controls on their spending and the costs that they can claim.  They lobbied the Ministry [i.e., the Ontario Ministry of Education] successfully to get rid of most measures of financial accountability for the 2022 and 2023 funding guidelines. Yet, without financial accountability, they expect governments to compensate them for all of their costs above $10 a day.  How can that work?  It doesn’t.  In fact, if you talk to for-profit operators for a little while, you find out that they don’t like a fixed-fee system at all.  They want a tax credit scheme [i.e., funding provided to parents], in which for-profit operators charge whatever the market will bear, and governments give increasing amounts of money to parents to chase after the rising fees and try to make child care affordable.  They don’t accept the rules of the game.  And as long as they don’t accept the rules of the game, for-profit operators play a decisively negative role in our attempts to build a universal system of good quality child care services. “

These for-profit operators meeting in Calgary have just made clear what many of us already knew – many for-profit operators are unwilling to be participants in building an accountable, affordable, accessible, high quality system of child care as a public service for Canada’s families.  They would prefer a child care funding system that enriches them without controls or accountability.  Let’s ignore them and their PR company, but be willing to work with those for-profit operators that ARE willing to be part of building early learning and child care as a public service.