‘For-profit operators are ready to step in’: Peel remains childcare desert, needs partners for $10-a-day program 

A recent joint letter to Ottawa from the PC government and the Association of Municipalities of Ontario warns that many cities and towns are struggling to implement the $10-a-day child care plan, and labels Peel—a known child care desert—as the poster child of the problem.

The agreement between the federal and provincial governments to deliver $10-a-day child care mandates that 70 percent of the spaces be provided by the nonprofit sector and 30 by for-profit businesses. This, according to the letter sent July 5, has created a bottleneck, with nonprofits unable to create enough spaces to meet the demand, and reach the 70 percent threshold.  

Ontario municipalities are being forced to turn down thousands of child-care spaces through the federal government's Canada-wide Early Learning and Child Care (CWELCC) program due to this cap on the number of for-profit spaces allowed under Ottawa’s deal with the PC government.

“We are now at the midpoint of the CWELCC agreement and with parents struggling to access affordable child care and service system managers constrained from creating child care spaces by the cap on for-profits, the situation is becoming untenable.”

The letter details the struggles of implementing the federal government's plan to provide more affordable child care, also widely known as the $10-a-day program — a five-year strategy initiated and funded by the federal government to reduce the cost of child care to an average of $10 per day by 2026.

In the letter, addressed to federal Minister of Families, Children and Social Development Jenna Sudds, the Province and AMO cited the "lack of adequate funding and imposed policies that are significantly limiting growth" as the key challenges many Ontario municipalities are facing. Another barrier identified is the hard cap on for-profit participation in the national program and its “strict ratios.”

Queen’s Park has identified Peel for needing the most new child-care spaces, but the region has turned down more than 2,000 potential spots under the $10-a-day program because those operators are for-profit, according to the joint letter. Meanwhile, previous reports from regional staff in March last year estimated more than 14,000 additional spaces are needed in Peel.

“Peel Region, often described as one of Canada’s child care deserts, is particularly challenged by ratio requirements,” the joint letter points out. As for-profit facilities continue to be turned down, “it does not appear that not-for-profit operators will be able to fill the gap.”

The Province acknowledges the critical role of not-for-profit providers in the child care system, but stresses they “cannot fill the capacity alone.”

Barriers in Peel’s nonprofit sector include staffing challenges (with many early child care workers being paid little more than minimum wage), a lack of funding for partner agencies stemming from the rapid growth of the region which has not been met with proportionate public-sector support from governments, and the inability to expand the non-profit sector into the licensed  home-based model which is popular across much of Mississauga and Brampton, but has not been able to meet the rapidly growing demand.

Communities where child care is limited leave fewer options for parents seeking support and employment situations often limit their ability to work from home. Even subsidized child care is out of reach for many families in Mississauga and Brampton where fees are among the highest in Canada due to the lack of spots. A 2019 report from the Canadian Centre for Policy Alternatives revealed preschooler openings in the two cities cost roughly $1,000 a month, compared to around $200 in Quebec cities, which benefit from provincial subsidies. This leaves parents in Peel in a precarious position of choosing between paying for childcare or securing employment — a decision that impacts women, particularly immigrant mothers, more acutely. This can lead to long-term financial impacts for families forced to make a choice. 

Regional staff previously pointed out there are more for-profit facilities that fall under the CWELCC program than nonprofit facilities — putting families at a disadvantage as for-profit providers charge more. 

The federal government invested $27 billion over five years under its 2021 budget to build a Canada-wide early learning and child care system with provinces and territories mostly partnering with licensed not-for-profit operators. Under its agreement with Ontario, from 2021 to 2026, the province’s estimated allocation is expected to be $13.2 billion. The object of the plan is to provide a 50 percent reduction in average parent fees for licensed Early Learning and Child Care (ELCC) by the end of 2022, reaching an average of $10 a day by the end of 2026 for licensed child care providers enrolled in the CWELCC system. 

Ontario committed to creating 86,000 new child care spaces by the end of 2026 to accommodate the new program. Since signing onto the deal in 2022, Ontario has created less than a third of these new spots, according to the Province. As a result of the lack of progress, AMO and the Province are requesting the federal government lift the current cap on the number of private child care providers allowed to register in the federal program to open up more quality licenced child care faster for families waiting to enroll their child. 

Meanwhile, as the federal government enforces the cap on for-profit providers, data directly from the Government of Canada’s website notes that in recent years, new openings being created have been predominately for-profit facilities, accounting for 45 percent of all new spots opened between April 2019 and December 2021. The data also found that as of February 2022, of the applications currently being processed by the Ministry for new centre-based child care spots, approximately 66 percent of the more than 21,200 spaces were for-profit.

A cap on the number of for-profit private child care providers allowed to register for the federal government’s $10-a-day plan is hindering partnerships.

(Andrew Ebrahim/ Unsplashed)

Of the data provided by 14 service areas on applications for expansion in 2023, five service system managers — tasked with overseeing the planning, funding, administration and operation of early years and licensed child care services — received all or most applications from for-profit operators, according to the July 5 letter. During that time, the Counties of Hastings and Wellington reported 100 percent of the incoming CWELCC applications were from for-profit licensees. Bruce County received 71 percent of new applications for the for-profit sector, while the City of Toronto received 62 percent and the for-profit sector applications to the Region of Waterloo accounted for 50 percent.

While the investment signalled a positive shift for many families struggling to cover costly care expenses, the reality is hundreds of thousands of families across the country are still waiting for child care to become available.

Ottawa’s cap on for-profit child care is not only hindering the program’s success, but also enabling new obstacles for the Region of Peel, where daycare spaces are scarce. The region has been left in a gridlock, faced with an already strained child care system with a lack of available room for children, which has been exacerbated with a staffing crisis that has halted existing child care facilities from expanding to bridge the void. 

As referenced in the letter, Peel has long been coined a “child care desert.” A 2018 study from the Canadian Centre for Policy Alternatives estimated almost half of Canadian children live in areas where there is not enough availability in licensed daycares, with at least three children vying for one available spot. It revealed the lowest average coverage was found in Saskatoon, and in Brampton and Kitchener, where there was one space for every four to five children.

Part of the challenge plaguing child care service providers across the province is the ability to retain workers in the sector, which the Ontario Coalition for Better Childcare — the province’s central advocacy group for a universal early childhood education and care system — has stressed is worsening.

The advocacy group has been calling on the Province for immediate action to improve pay for workers, highlighting that wages have dropped far below a livable level. This, the Coalition explained, has resulted in a child care workforce crisis it warns is “blunting the effectiveness of the Canada-Wide Early Learning and Child Care program — limiting enrolment, impacting quality and making programs unstable.” A report previously commissioned by the Coalition revealed Ontario has fallen behind most other provinces on wages in the child care sector, with Ontario being one of only four provinces that still has not introduced a salary scale or wage grid as part of the Canada-Wide strategy.

“Ontario has a child care workforce shortage amid an increased demand for child care spaces,” the advocacy group previously stated. “Currently many child care programs are limiting enrolment because they cannot adequately staff. This workforce crisis is now a major roadblock to the successful implementation of the [CWELCC] plan in Ontario. It is slowing planned space expansion and blocking access to child care for many families.” 

This was recently highlighted by the Region of Peel in staff presentation in June that revealed that with the introduction of the federal government’s child care plan “the Region has seen a shift in pressures related to child care programming and system management.” Staff said the Region “now requires greater flexibility in the use of non-mandatory Regional contribution to support current and future pressures in order to optimize services for children and families.”

Staff cautioned in February that the CWELCC program as well as its expansion — Peel was originally slated to bring 7,170 not-for-profit spots online — had presented new system challenges with the program’s implementation, including significantly increased workload and administrative needs for the Region. The June report went as far as to say the federal government’s program “has brought Peel back into a workforce deficit.” Through the national strategy Peel has been tasked with adding 11,980 new child care spaces (1,145 school-based and 10,835 community-based) to the system by the end of 2026. However, regional staff warn the additional openings cannot be operationalized without the addition of 1,625 child care staff to the workforce. 

“This creates massive system pressures to meet our expansion targets,” Nakiema Palmer, director of the Region’s Early Years and Child Care Services, told councillors in June. “The current workforce shortage poses the single most significant risk to the successful implementation of the Canada-Wide Early Learning and Child Care Program as a strong workforce is needed to ensure that families have access to affordable child care. It is also the main challenge that our child care partners continue to highlight.”

“This risk equation is simple: if we’re not able to address the workforce shortage, we will see empty child care classrooms, while experiencing growing waitlists for families requiring child care,” Palmer warned. 

The Ministry of Education’s own estimates previously predicted Ontario will require 8,500 additional Early Childhood Educators (ECEs) and child care workers in order to meet the target for CWELCC space expansion by 2026. 

The June report requested council allow staff to advocate to the Minister of Education for provincial policy changes — including fair wages for workers in the sector and prioritization of work permits for newcomers with ECE credentials — and additional, multi-year funding to address this challenge. Councillors, recognizing the imminent need to fill the gap, obliged. 

The lack of available child care in Peel has been a persistent issue; a 2018 study from the Canadian Centre for Policy Alternatives highlighted just how little coverage is available across Brampton and Mississauga.

(Canadian Centre for Policy Alternatives)

As the lack of staffing adds to the pressures mounting on the federal government’s promise to bring significant savings for families who may need assistance, it remains unclear how lifting the cap on for-profit providers would impact the current plan, or what additional funding, if any, would be required to subsidize more for-profit facilities in the system.

At the end of 2023, the Early Childhood Education Report revealed the federal government had spent 25 percent of its funding to date on for-profit providers in Ontario since the province signed onto the agreement. It cautions that more “funding will be needed to retain low fees, possibly at the expense of quality improvements and expansion efforts,” as operational costs increase as a result of inflation.

Under the current structure, providers submit their full budgets to their municipality and receive funding for fee reductions and wage supports. Municipalities (as the service system managers) are required to process enrolment applications and confirm eligibility within 10 days of receiving a program's application. The service system managers and licensees then have 30 calendar days from the date of application to execute an agreement for CWELCC funding.

A spokesperson for the Government of Canada said in an email to The Pointer that focusing the program’s growth in not-for-profit sector “supports the sound use of public funds,” by “ensuring that surplus earnings are reinvested in the programs and services to allow for continued growth of higher-quality programs, rather than distributed for the personal benefit of owners, members, investors or to enhance asset growth.”

“Governments of all levels have a fundamental responsibility to their citizens to ensure the sound and reasonable use of public funds; as such, agreements with provinces and territories include accountability provisions to ensure transparency and commitments to report on these expenditures. Accountability provisions apply to all operators that are part of a Canada-wide ELCC system, whether for-profit or not-for-profit.”

The spokesperson said in recognition of the challenges not-for-profit providers face in financing capital costs, the federal government is also providing Ontario with $201.8 million from the Early Learning and Child Care Infrastructure Fund to create child care spaces and support inclusive child care services across the province. They said the government will continue to work with the Province on how Ontario can meet its space creation targets by 2025-2026 and get parents off waitlists. They did not confirm whether the government is planning to act on the Province and AMO’s recommendation to lift the cap on for-profit facilities. 

As it points the finger at the federal government, the Province has also recently come under the microscope for a lack of “financial transparency” around the $10-a-day child care program, which the Canadian Union of Public Employees says has left operators running in deficits. According to the Union, the PC’s are months behind schedule on their planned release of the 2025 child care funding formula, leaving providers “operating blind,” and adding to the pressures already facing the strained sector. 

While questions spiral around whether the federal government will heed the pleas from the Province and its municipalities, waitlists continue to balloon across Ontario as families desperately wait for spots to open. 

“[T]he number of families on waitlists trying to access affordable child care is at an all-time high as the CWELCC system rolls out,” the joint letter highlighted. It referenced Kawartha Lakes which has reported that children now spend an average of 6.4 years waiting for a vacant child care space. The Region of Waterloo has also reported a waitlist increase of 115 percent compared to before the program’s launch, and the City of Ottawa has seen a 41 percent increase — something the PCs say is “exacerbated by the current artificial ratio cap on quality for-profit operators.”

“With waitlists so high, parents and guardians across the province are seeking quality child care for their children in their local community regardless of whether they will be for-profit, not-for-profit, or home based,” the joint letter states. “Ontario’s for-profit operators are ready to step in and support the need for additional quality child care spaces but are being turned away solely because of their organization status, hurting our ability to meet space creation targets and increase much-needed access for families.”  

While the Province and AMO anticipate the federal government’s Early Learning and Child Care Infrastructure Fund, introduced in 2022, and other budget initiatives could incentivize more not-for-profit participation, they warn “this alone will not solve immediate space creation that Ontario needs today.”

Email: [email protected] 

Twitter: @mcpaigepeacock

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