Those who oppose the $10 a day program often argue that there is a simple and better program to replace it – give money directly to parents instead. The logic is, at first glance, persuasive. If you give parents money, it seems like they should be able to purchase exactly the child care they need. And competition among different providers should, you might think, keep fees down. Programs that directly fund child care services, like the $10 a day program, are said to be bureaucratic and inflexible and to create huge shortages and long waiting lists.
There is some truth here, but much falsehood, and much deliberate ignoring of the evidence on the impact of a “family allowance” approach. I have just written a report for The Prosperity Project that examines the likely impacts of giving parents money instead of funding and providing child care services that parents can use. I unearth a lot of new data about families that are using child care in Canada and the number of parents who want access to affordable, accessible, high quality child care.
The evidence shows that this type of “family allowance” fails as public policy because it:
(a) isn’t what most families want
(b) doesn’t address families’ needs for child care
(c) would be much more expensive than the $10 a day program
(d) would have negative effects on women’s employment and the economy, and would increase the gender-based child penalty that mothers pay with reduced earnings
(e) has been tried before and hasn’t solved child care issues, and
(f) ignores the very large child benefit programs that already provide money to parents.
You should read the report in full (19 pages), or at least its Executive Summary (3 pages). Below, I provide a few tidbits to encourage you to dig deeper.
As of 2023, when Statistics Canada collected large amounts of data from parents about child care and employment, there are 938,000 Canadian children using licensed or accredited child care services – the kind of services supported by the federal government program. In fact, over three-quarters of children using any kind of child care are in licensed care. In 8 of Canada’s 13 jurisdictions, average fees for this child care is down to $10 a day or less. Other jurisdictions have lowered fees by at least half relative to fee levels in 2019-20. In other words, although the press scarcely covers it, a very large number of Canadian children and families are already benefiting from licensed child care that is subsidized to be affordable and more accessible.
Licensed child care is not the only part of the set of services and benefits that will make up a fully developed early learning and child care system. Many children benefit from full-day or part-day kindergarten at ages 4 and 5 years. Many children and families benefit from paid maternity and parental leave for up to 12 or even 18 months. If we put these all together, it is already true that in 2023 over 1.5 million children currently benefit from Canada’s early learning and child care and leave arrangements. That is about 2/3rds of all children 0-5 years of age.
Some people think that the reason some parents don’t currently use child care is because they don’t want to. But, outside Quebec, most families (58%) that currently do not use any child care would like to use some type of non-parental child care if they can find what they need and want. And, of these, the lion’s share – 62% – would like to use licensed child care, largely as a means to join or rejoin the workforce.
Some people argue that it is mostly affluent parents that benefit from universal child care programs and that marginalized families and those from diverse backgrounds are left behind. That is certainly true of market-based child care systems when fees are not controlled; high parent fees are only affordable by affluent families and many vulnerable families do not qualify for income-based subsidies. However in fixed-fee systems like the $10 a day program, families from all backgrounds gain access. I show a series of charts from Quebec making this point.
A family allowance program would have to give parents an amount of money that was equivalent, on average, to what they gain by having $10 a day child care. This family allowance program would cost the federal government just over $28.5 billion annually and its net cost would be three times as much as the cost of providing child care services.
Women who have children suffer substantial losses in earnings after the birth of a child. Economists have found that mothers’ earnings decrease by 49% in the year of a child’s birth. Even ten years later, women suffer from an average earnings loss of 34% relative to their earnings before childbirth. Universal child care has been found to substantially reduce these “child penalties”. In other words, accessible child care services make an important contribution to increasing gender equity.
Most child care in Ontario is provided by non-profit or public operators. This has been true for years. A full 70% of the licensed/regulated child care spaces for children 0-5 were non-profit or public back in 2022, when Ontario signed the Canada-Wide Agreement with Ottawa.
So, two things are not in doubt. First, it is obviously possible for non-profit and public child care services in Ontario to grow and expand, given the right conditions. They have done it successfully in the past, more successfully than the for-profit child care operators. Second, the Ontario government, with the support of municipal governments and school boards, knows exactly how to facilitate and co-ordinate the expansion of non-profit and public child care, because it has done this in the past.
So, if non-profit and public child care are not expanding rapidly in Ontario, it must have to do with the failures of Ontario government policy (as described in my recent blog post).
Ontario has failed to fix shortages of early childhood educators. Starting wages in Ontario are $5.00 an hour less than in P.E.I.!
It has failed to provide or enable sources of capital funding for expansion of community non-profit child care.
It has starved child care providers of revenue in the $10 a day program and has failed to provide any certainty about future revenue streams for operators.
Ontario has failed so comprehensively that you have to wonder if the failings are deliberate.
To cap it all off, we now find that Ontario is deliberately violating the terms of the Canada-Wide Agreement that it signed with the federal government back in March 2022. Ontario promised to increase child care capacity by at least 86,000 spaces, and it promised that a maximum of 30% of these new spaces would be operated by commercial for-profit operators. The balance would be community-based or school-based non-profit and public child care. It also promised that it would prioritize development of child care in underserved areas and amongst families with greater needs.
Instead, about 75% of the expansion that has occurred has been in for-profit spaces. And at least half of the new spaces are in areas of greater profitability rather than areas of greater need. Half of the new spaces can charge whatever fees they want, rather than being affordable spaces.
We know some details about Ontario’s expansion because of good journalism by Allison Jones of Canadian Press. She has recently written:
“Ontario’s deal committed the province to 86,000 new child–care spaces since 2019, though the deal was signed in 2022. But so far while there have been about 51,000 new spaces since 2019 for the kids five and under, the age group covered by the national program, only 25,500 of those are within the $10-a-day system.”
So, let’s do the math:
Pretty well all of the new spaces that are outside the $10 a day system (without any controls on fees) are for-profit, so that is already half of the 51,000 spaces.
Much of the growth inside the $10 a day system is also for-profit. When Ontario published its Action Plan in 2022 it told us that 15,000 spaces had opened since 2019 and 45% of this was for-profit.
A further 21,200 spaces were said to be “in the pipeline” and 66% of this was for-profit.
I estimate therefore that about half of the growth since 2019 that is inside the $10 a day system is for-profit (the Ministry of Education has these figures and is shy about releasing them, which tells you that they know they have something to hide).
In other words, about 75% of the total of 51,000 new spaces in Ontario since 2019 are in the for-profit sector.
This is a clear violation of the Canada-Wide Agreement Ontario signed in 2022. In that agreement it promised that “at the end of this Agreement, the proportion of not-for-profit licensed child care spaces for children age 0 to 5 compared to the total number of licensed child care spaces for children age 0 to 5 will be 70% or higher.” (emphasis added). The agreement clarifies the purpose of this clause: “to ensure that the existing proportion of not-for-profit licensed child care spaces for children age 0 to 5 will be maintained or increased by the end of this Agreement.”
In case there was any doubt, the “definitions” section of the agreement refers to the Child Care and Early Years Act, 2014 in defining licensed child care. In other words, it refers to all licensed child care governed by that act.
So, Ontario is taking federal money intended to build a publicly-managed, affordable and accessible high quality child care system and it is not doing what is necessary to provide spaces for children and families.
Of course, parents who are desperate for child care spaces right now don’t care if the spaces are for-profit, non-profit or public. They just want a space for their child and they want it now. The negative effects of relying on for-profit child care without sufficient controls won’t show up for a while.
That’s what happened in the early 2000s when the Government of Quebec, under Jean Charest, tried the same trick – relying on for-profit child care for expansion. The results were disastrous for the quality of child care services, with nearly half of the new for-profit centres failing quality assessments sponsored by the Quebec Government. Similar quality problems are what led Mathieu Lacombe, the Quebec Minister of Families from 2018 to 2022 to say that allowing for the expansion of private daycare, was the ‘biggest mistake the Quebec government committed in the last 25 years.”
As I wrote in that recent blog:
I am not trying to say that all for-profit operators provide poor quality child care or that all of them skimp on child care staffing. Some small for-profit operators provide good quality care and devote themselves to quality improvements. You can have a certain percentage of for-profit providers in a publicly-funded child care system, but there need to be strong measures of public management that limit the ability of for-profit enterprises to extract profit at the expense of quality.
That was the spirit of the Agreement that Ontario signed up to in 2022. If Ontario were to implement this agreement in good faith, it would adopt a generous funding formula to cover actual costs, it would make expansion of child care into an all-of-government priority with a range of provisions for capital financing, it would develop a wage grid for child care educators that is at least as generous as the one in PEI and it would implement the agreement it signed on the balance of non-profit and for-profit expansion. Ontario’s parents and children need the $10 a day child care system they were promised.
John Cherry, from Goodstart Early Learning, has written an evaluation of child care in Quebec and New South Wales. Apparently his purpose is to determine whether supply-side funded systems (like Quebec’s) are better or worse than demand-side funded systems (like in Australia).
To summarize briefly, John finds that Quebec does better on workforce participation and affordability, NSW does better on child care accessibility and quality. So, John concludes that Australia’s system is pretty good. His conclusion appears to be that Australia shouldn’t flirt with Quebec’s fixed-fee, supply-side-funded system.
It’s a problematic paper for several reasons. First, some of the details about Quebec are wrong. Second and more fundamentally, only part of Quebec’s child care system is supply-side funded and charges parents a fixed fee of approximately $10 a day. The other part (about 20% of the total) is demand-side funded like in Australia. In the demand-side-funded part, child care providers can set whatever parent fees the market will bear and some of this later gets reimbursed to parents. So, some of John’s comparisons, particularly on affordability and quality, are actually comparing a mixed system (Quebec) to a demand-side-funded system (New South Wales). These comparisons don’t tell us much about how a supply-side funded system would perform in Australia. Third, John does not explain how a demand-side funded child care system can deliver what we want from a universal child care system – dependably low fees, financial accountability for public funds, and planned expansion of capacity according to need. Let me explain.
Much of John’s paper is captured in Table 1 – Summary of ECEC Indicators. There’s a column for Quebec and one for New South Wales, comparing results on different indicators of ECEC health. I reprint it below.
Workforce Participation John agrees that Quebec does a better job than New South Wales in workforce participation. Absolutely true. 85% labour force participation for Quebec mothers with young children vs 71% in Australia. Add on top of that the fact that most Quebec mothers work full-time vs. Australian mothers mostly part-time and it does appear that a fixed low parent fee really does have a very substantial impact on mothers’ employment.
Affordability John then presents comparisons of affordability, but his numbers are too generous to New South Wales and not generous enough to Quebec. The differences in parent fees between supply-side funding and demand-side funding are much bigger than he admits. On NSW, John calculates that for a family with average income, the parent fee for a first child is $29.50 per day and for a second child it is $10.05 per day. In fact, the Productivity Commission draft report says that the average per child out-of-pocket parent fee across Australia (and therefore likely in NSW) is just shy of $45 per day. That includes the extra charges for centres open more than 10 hours per day, where parents have to pay the full fee for these extra hours even though they don’t use them.
And the Quebec numbers on parent fees are too high. In the supply-side funded centres and family homes, the daily fee for every child in 2024 is CA $9.10 (or about AU $10). The figure John quotes for Quebec of CA $17.20 per day includes the children who pay $9.10 but it also includes the high parent fees paid by demand-side funded parents before the tax credit reimburses them. In a fair comparison, Quebec’s child care is cheaper than in NSW by a considerable amount, not just by a little bit. That helps us understand why mothers’ employment has been so responsive in Quebec.
Accessibility Then there is accessibility. According to John, NSW scores high on accessibility of child care. But, he chooses a strange way of measuring it. He chooses the growth in the number of centre-based child care spaces in the last 5 years. NSW has added more child care spaces so therefore he concludes that accessibility is better in NSW.
A much better measure of accessibility would have been the coverage rate – what percent of the child population could be accommodated in approved services (licenced services in Canada). John provides these numbers on page 6 of his paper, but not in Table1 and not in his conclusions about accessibility. In fact, as he records, about 75% of children 0-5 in Quebec are in early childhood services. This compares to about 60% in New South Wales. John makes a big deal about services growing in New South Wales and not growing in Quebec. Of course, that’s what you would expect if accessibility was already better in Quebec; it wouldn’t need to grow its services as fast. The current rate of growth of services is not a good measure of current accessibility.
And if you compare the number of days of child care attended in Quebec and NSW, the accessibility in Quebec is even stronger. Over 90% of the children in Quebec who attend ECEC do so on a full-time basis, compared to about 30% in Australia (with another 25% in Australia attending 4 days a week).
Quality Finally, we get to a part of the comparison between Quebec and NSW on which John and I agree. The quality of child care in Quebec is lower than it should be, and probably is lower than it is in NSW. The most obvious indicators of this are the child-staff ratios. 5 children to 1 staff member for very young infants in Quebec vs. 4 to 1 in NSW. Personally, I think both of these ratios are too high for the very young, but I agree that a 5 to 1 ratio is shocking. As is a ratio of 8 to 1 in Quebec after children turn 19 months of age.
Quebec is an outlier here in Canada too. In Ontario, the required ratios are 10 children to 3 staff members for children 0-17 months, 5:1 for children 18 months to 35 months, and 8:1 for children 3 years to 6 years (except for before-and-after school care for kindergarten children). NSW’s ratios are comparable to Ontario’s.
Similarly, the wage rates paid to educators in Quebec are worse than in New South Wales. John is right on this.
John overstates the differences in percent of educators required to be qualified. He says it is 50% in Quebec and 100% in New South Wales. The regulated percent in Quebec is really 66.6% or 2/3rds. It was temporarily lower due to staff shortages during the pandemic. And the requirement in NSW is for 100% of front-line staff to be certified. But this is a bit misleading because only 50% of the front-line staff in NSW must have an ECE Diploma or above. The other 50% can have a Certificate III which is a qualification well below what is needed to provide good quality care for children on one’s own.
However, the inadequate quality of Quebec’s child care system is not really evidence that supply-side funding does not work. Instead it is evidence that Quebec services have not been adequately funded. The history of Quebec’s system explains this. Back in the 1990s, Quebec struck out on its own to build a universal child care system, without any funding from Canada’s federal government. Relying only on its own funding, Quebec ended up cutting corners on quality. If New South Wales were operating either a demand-side funded or a supply-side funded system with no Commonwealth funding – relying only on state funds – I am sure that quality would suffer too. But Quebec’s history is not New South Wales’ inevitable destiny. With strong Commonwealth commitment to spending on universal child care, New South Wales can have both supply-side funding and good quality care. As you can see in John Cherry’s Table 1, public funding of child care in New South Wales is already 50% higher than in Quebec – AU $5.7 bn vs. AU $3.7 bn annually.
What Conclusions Should We Draw From This Comparison? I understand John Cherry and Goodstart’s hesitation about a switch to supply-side funding. It would be a big transformation of funding arrangements and would constrain the power of child care operators to set their own fee levels. If it was done badly, it could have negative effects.
However, I think John and Goodstart need to explain how they will build a publicly-accountable universal low-fee high-quality child care system on Australia’s existing demand-side funding base. In my opinion, they need to answer (at least) three questions. How would they guarantee that the system will have low child care fees in the future? How can they build financial accountability for public funds into the existing system? And, what mechanisms of public planning for location of new services can ensure an equitable and efficient growth of new services in Australia?
Australia has seen parent fees rise consistently as public funding has increased over the years. The average parent fee per child is now about AU $135.00 per day. Every time the Commonwealth government pours more money into the system, out-of-pocket child care fees fall temporarily. After a short while, these out-of-pocket costs gradually rise back to previous levels. Nothing has worked to keep fees down in the long term. Supply-side funded systems guarantee low dependable out-of-pocket fees. Until Australia’s demand-side-funded child care system can provide the same guarantee, it cannot be considered a good basis for a universal system.
In a universal child care system, the vast majority of operator revenues come from governments. It is unacceptable to continue to have no public accountability for these substantial amounts of public funds. Currently, child care operators do not have to justify the fees they charge or show that public moneys are spent on legitimate costs of service provision. Goodstart should explain how this will be remedied in their plans for a universal child care system built on the existing demand-side foundations.
Finally, an equitable universal system of child care services needs to plan where new child care services will be located. It cannot leave this to the whims of private investors who all want to crowd their new services into higher income areas. How will this be accomplished within Australia’s demand-side funded system? These are the tough questions that need to be answered by the champions of a continuation of demand-side funding for Australian child care.
It is now widely acknowledged that the pay of early childhood educators is too low. Comparisons of ECE hourly wages to those in other competing occupations show that educators are paid as if they had a high school education rather than a college certificate or diploma. We can see the effects of this in the extreme shortages of fully-qualified ECEs for existing and new child care facilities. In most Canadian provinces and territories, growth in spaces is held back as much by the lack of staff as it is by the lack of organizational and financial support for planned and funded expansion.
The big questions for governments are (1) how much will it cost to raise wages? (2) how should they do it? and (3) who will pay?
Up till now, it’s been hard to answer the “cost” question because we haven’t had good data on how many program staff work in licensed services and what their average wages are now.
I’ve spent a large amount of time pulling together and analyzing the best publicly available data on this, province by province (sorry, I haven’t done the Territories yet). The details of this (staff numbers and typical wages by qualification level for each province) will appear in another blog on this site once I have finished crossing the t’s and dotting the i’s (lots of numbers and boring reading for most people). But, using those numbers, I can now make estimates of how much raising ECE wages will cost. If you have better numbers, I’m happy for you to send them to me so I can make revisions.
The table below shows my estimates of how much it would cost to raise the wages of fully-qualified ECEs across the country by 25% from whatever their current level is. For the average ECE, that would mean a raise of $5 to $7 an hour from current levels. I’m not trying to say that’s enough, or that this is the right way to raise ECE wages. If I look at the data on wage comparisons to other occupations, it very likely isn’t enough. But, it may begin to move the needle on the supply of early childhood educators. It may encourage more new ECE graduates and existing ECEs to stay in the sector.
Have a look at the last column province by province. Each cell shows the overall cost of raising qualified ECE hourly wages by 25% compared to what they are now (including the effects of wage grids, wage grants and wage supplements).
This is simply a simulation to give us all an idea of how much it will cost to have a significant rise in ECE wages. It is not a carefully thought out design for wage increases. What is needed will vary from one province to another; some provinces have done a lot already, others have done little. In provinces with generally high wage levels for all types of workers, a 25% rise in ECE wages may not do very much. In provinces that have already done a lot to raise wage levels and establish wage grids, a 25% wage rise might be very significant.
To see all of the columns, view the table below in a new window
ESTIMATED STAFF NUMBERS (0-12), CURRENT WAGE BILL, AND COSTS OF WAGE INCREASES FOR FULLY-QUALIFIED ECEs
Province
Number fully-qualified incl directors/ supervisors
Number of less qualified
Total program staff
Total FTE program staff
Current annual wage bill ($ mil)
Cost of 25% increase for fully-qualified ($ mil)
BC
16,800
6,800
23,600
20,600
$1,005.4
+$208.0
AB
13,000
10,750
23,750
21,000
$965.8
+$155.9
SK
1,650
1,300
2,950
2,600
$90.7
+$15.5
MB
3,400
3,000
6,400
5,700
$215.3
+$34.9
ON
35,000
20,000
55,000
51,000
$2,183.0
+$391.7
QC (0-4)
29,000
10,300
39,300
35,000
$1,576.0
+$315.9
NB
2,700
2,000
4,700
4,300
$186.0
+$29.9
NS
2,600
800
3,400
3,200
$142.4
+$29.9
PE
700
400
1,100
950
$42.3
+$7.3
NL
825
400
1,225
1,100
$48.2
+$8.9
CANADA
105,675
55,750
161,425
145,450
$6,455.1
+$1,198.0
CA – QC
76,675
45,450
122,125
110,450
$4,879.5
+$882.1
To see all of the columns, view the table above in a new window
Fully-qualified refers to ECEs with a 1-year college ECE certificate or a 2-year college ECE diploma, or more.
These calculations are produced by Gordon Cleveland, based on the estimated wages and staff numbers in Estimates of Staff Numbers and Wages in ELCC Centres, by Province, August 16, 2023. Numbers for the Territories are not yet included.
It is assumed that wages would have to rise equally for ECEs caring for children 6-12 years of age. However, in Quebec where fully-qualified staff caring for children 5-12 years are employed by the school system, numbers refer only to staff caring for children 0-4.
These numbers do not include the extra cost of compulsory benefits like contributions to pay for EI and CPP/QPP and vacation pay. That would add another 15%-18%, perhaps. However, these estimates do include an allowance for supply staff.
There is no magic in this 25% wage rise simulation. But, now, with data on current numbers of staff and on current wage levels, we can do whatever simulations we think are appropriate and estimate the costs of taking action (and compare them to the costs of inaction). That, I think, is a big step forward.
With these simulations in hand, we can turn to the next two questions. Question #2 was how exactly we should raise wages. That debate is too big for this blogpost, but let me make some observations. I believe that the big staff supply problem is centred in the inadequate supply of fully-qualified early childhood educators, whether that is a one-year ECE college certificate or a two-year ECE college diploma. Recruiting untrained staff or recruiting staff that need to take only an orientation course or two is not where the problem lies. That means we need to concentrate our scarce funds on raising the wages of qualified educators.
And once we have decided to concentrate our wage-raising efforts on fully-qualified staff, we need to avoid the Ontario mistake. Ontario decided to raise wages by concentrating their efforts on low-paid educators. In 2022, they boosted all early childhood educators earning less than $18 an hour up to $18, but they did nothing for anyone else. In 2023 and beyond, they are raising the pay of other educators by $1 per hour each year, but only if the educators currently earn less than $25 an hour; $25 is the top wage for this program. This focus only on low-paid educators ensures that ECE will continue to be a low-paid profession; even $25 an hour will keep educators well below competing occupations.
And, the Ontario wage supplement design ensures that most of the wage assistance will go to centres that previously were underpaying their workers, disproportionately those in the for-profit sector. The Doug Ford government is developing a bit of a reputation for favouring for-profit friends, whether it be the Greenbelt or child care, but this kind of wage supplement design will not do a good job of retaining the best-qualified and most experienced staff and making ECE an attractive profession.
Finally, there is the question of who will pay. I would be overjoyed if the federal government decided to come up with a billion dollars of extra annual funding, but I don’t think that will happen very soon, and wage rises do need to happen very soon. Some provinces may be willing to up their spending to solve wage problems, and that is welcome. But the most obvious immediate place to get funding for educator wages is to change priorities for the expenditure of federal dollars under the Canada-Wide Early Learning and Child Care Agreements. The very large majority of the federal funds under current Action Plans goes to lowering parent fees. Right now, many provinces are renegotiating Action Plans to cover the next three years. Why not allocate a larger portion of money in the next three years to cover wage increases for fully-qualified early childhood educators? And there should be provincial contributions to cover the wage increases for staff caring for 6-12 year-olds.
The numbers in the table above tell us about how much reallocation of dollars is needed in each province. Let’s get it done, or expansion will not happen and access to affordable child care will continue to be a dream for most families.
My opinion of British Columbia’s New Spaces Fund is shaped by the context. It’s a valuable, if imperfect, source of capital funding for the expansion of not-for-profit and public child care.
The context is that we’re not doing a good job in expanding the availability of child care services in Canada. That’s disappointing, of course, but also a danger to the ultimate success of the Canada-Wide Early Learning and Child Care program.
Without rapidly expanded capacity, most parents will not be able to benefit from $10 a day child care. Women will not be able to enter the labour force. The economic growth benefits of child care will not happen. Parents will be angry and frustrated at governments that have promised them services they can’t deliver. A new government may come in and turn everything over to the for-profit sector, loosening staffing regulations, and allowing operators to surcharge parents for “extras” to make providing child care more profitable.
The decision of federal and provincial/territorial governments to rely on the not-for-profit and public sectors for child care capacity was good for the long-run, but it’s having lots of problems in the short run. Not-for-profit and public services are typically of higher quality with better effects on children’s lives. Not-for-profit and public services become trustworthy community assets, here for the long term, in a way that for-profits do not, always anxious to sell assets or property to the highest bidder.
But, not-for-profits need more help to expand than the for-profits do. For-profits have better access to capital funding from the private sector than not-for-profits do; many banks and financial institutions are unwilling to make construction loans and mortgages to not-for-profit organizations. Most not-for-profit organizations find it too risky to make expansion promises until future on-going operational funding arrangements for services are settled; some for-profit organizations are willing to take a gamble that future operational funding will be generous, or that costs can be slashed to ensure a profit. On top of all this is the shortage of qualified early childhood educators. Not-for-profits are typically unwilling to expand until they can hire enough fully-qualified educators to run good-quality programs. For-profits are often willing to plan to operate without a full complement of trained staff, hoping they can get exemptions from government regulations and be able to operate with unqualified staff.
British Columbia’s New Spaces Fund is not perfect. Yet, in the context I’ve just described, it provides some important support for child care expansion to not-for-profit and public organizations in B.C. And that’s a lot more than I can say for most of Canada’s provinces, outside Quebec. The New Spaces program provides capital grants only to not-for-profit and public organizations who are willing and anxious to expand the supply of child care services. Previously, it was available to the for-profit sector who did not need it; that was a big mistake that has since been corrected. The budget last year was $292 million, about $84 million from provincial funds and the rest from federal funding under the Canada-Wide ELCC program.
Some of the projects are for minor renovations, some for equipment only, but some are for much bigger projects. The new Ministry of Education and Child Care prefers to have projects that are funded for $40,000 or less per space, but this restriction can be waived. Since, construction costs have been rising rapidly, $40,000 per space is now below full cost for many projects. And applicants are expected to come up with 10% of the entire project cost from other sources.
It’s also a one-time capital grant, so you have to know a lot of detailed cost and design elements up-front when you apply. At the time you apply, you are guessing at much of this. This is a disadvantage. A capital program, instead of a one-time capital grant, can be more flexible.
Eligible costs for the New Spaces program include project management, design/engineering costs and site evaluations, architect and accountant fees, and business planning development (business case model and analysis). Also eligible are infrastructure costs – water, sewer, roads, sidewalks. And equipment. And GST/PST and a 10% contingency.) Not included are costs of purchasing real estate, or buildings or commercial space (however, modular buildings to be erected on site are an eligible expenditure).
Many of the applicants for New Spaces funding are local governments, school boards, health district authorities, public post-secondary institutions, and First Nations. This is a great use of the program. Many of these bodies may have access to land for building, and many will have considerable experience in managing large development projects.
The New Spaces Fund is application-driven. In other words, organizations have to take the initiative and plan child care expansion and apply for capital funding. The New Spaces Fund is therefore a capital grants program, it is not part of a program of capital expansion. In many ways, this is a weakness and this feature has been criticized. Advocates say that B.C. needs planned child care expansion, focused first on areas of higher need, with support for many aspects of expansion – not just capital grants. Most child care centres do not have the resources to take on major capital development, raising millions of dollars of capital funding and managing multi-year expansion projects. Capital expansion requires more than just money. It needs organizations that will take responsibility for development; it needs architects with knowledge of child care, it needs design standards. It also needs a much longer guarantee that facilities will stay in place than the current 10-year requirement of the New Spaces Fund. Manitoba’s Ready-to-Move program is a model to look at for how resources of different actors can be mobilized for child care expansion.
While that’s true, let’s give B.C. some kudos for having a program of capital grants at all. Believe it or not, most provinces apparently believe that (capital) money grows on trees (for not-for-profit and public organizations). Alberta offers $5,000- $6,000 per space. Ontario offers about $7,000 per space. In the context where the cost of new-build construction is often more like $50,000-$60,000 per space, that’s not a serious amount of capital assistance.
B.C. has much to do. They are planning development of a wage grid to attract early childhood educators, but there is no deadline for when this will happen.
B.C. has not yet developed a funding formula for the provision of operational funding when parent fees are an average of $10 a day for everyone. This means that future revenue streams are uncertain, so the planning of child care expansion for not-for-profit and public services is more risky than it needs to be.
B.C. has not yet developed mechanisms for planning and guiding the child care expansion that will have to happen. Based on current use patterns in Quebec where parent fees are now $8.75 a day, we can expect that B.C. will need to have spaces for 174,180 children 0-5. That would mean a need for about 77,750 additional child care spaces compared to 2021. So, B.C. needs to get its game on. As many other provinces do.