Lower daycare fees are a game-changer. But federal plan to expand spaces still faces roadblocks, say experts

For Canadian families who’ve seen their child care fees halved or plummet to $10 a day in the past few years, Canada’s affordable child care plan has undoubtedly been a game-changer.

After committing to build a Canada-Wide Early Learning and Child Care (CWELCC) system in its 2021 budget, the federal government followed up by signing agreements with each province and territory over the next year.

It pledged to invest up to $30 billion over five years and $9.2 billion annually thereafter, with the goal of bringing fees down to an average of $10 a day by 2026 and expanding the number of child-care spaces — 250,000  new spots across the country by March 2026.

Yet the journey to build an affordable, high-quality, inclusive and flexible child-care system hasn’t been without speed bumps. New parents eager for a spot are still meeting long wait lists, and beleaguered operators are struggling to turn expectations into reality.

Now, with pressure on to make it to 250,000 new spots in the next year and a half, daycare experts share what’s standing in the way.

Retaining and recruiting staff 

Since the CWELCC agreements emerged in 2021 and 2022, Canada has improved daycare affordability by shouldering some of the burden of child-care costs. Families with kids under age six paid lower fees for registered daycare programs and provinces largely used the federal funds to cover the lost revenue for operators, according to Carolyn Ferns, public policy coordinator for the Ontario Coalition for Better Child Care. 

Despite perennial staff shortages, the need to retain and recruit more daycare workers hasn’t received the same attention. 

“Overall, there’s still a lack of decent working pay for many early childhood educators (ECEs) and childcare workers,” Ferns said in Toronto.

To meet the federal goal of 250,000 new daycare spaces by March 2026, Ferns says provinces and territories must tackle the sector’s workforce crisis with systemic change: to retain those in the system and recruit a fresh wave to join them. She’s advocating for higher wages and a wage grid — a stepped-salary range recognizing qualifications and experience — for daycare workers, plus strong benefit and pension plans to make the sector a more sustainable career choice. Newfoundland and Nova Scotia, for instance, have made moves in this direction.

Building new centres  

Spurring the construction of new child care centres has been another challenge across regions, particularly for non-profit and public daycare providers who can struggle with planning and financing major capital projects alone. 

“Most child-care programs are run by voluntary organizations and particularly in those small and remote communities, they’re parent boards,” explained Kerry McCuaig, a fellow in early child care policy for the Atkinson Centre for Society and Child Development at the University of Toronto. 

The work it takes to build a new centre is out of reach for those organizations, said McCuaig.

“You’re asking parent boards to go out and buy land and get a contractor and get an architect and meet all the requirements of a [daycare]… and then fill it with kids and run it,” she said from Oxford, England. “What the sector is telling governments is ‘This is untenable.'” 

McCuaig noted some success in regions when schools and municipalities join in to collaborate on child-care expansion. 

It’s happening, for example, in Manitoba. To help rapidly increase daycare spaces, the province introduced an initiative collaborating with municipalities, Indigenous governing bodies and daycare operators to build more than two dozen new child-care facilities in largely rural and First Nation communities.  

The 25 new facilities — 11 now completed, the rest to come — are standardized buildings designed for child-care and assembled on-site with pre-fabricated components to shorten construction time. They go up in about nine months, says Sarah Whiteford, Manitoba’s assistant deputy minister of early learning and child care.

The project is connecting with college programs and other workplace groups to hire ECEs and staff for the new centres. The municipal governments and Indigenous governing bodies won’t charge rent from the daycare providers for the first 15 years of operation, during which time they’ll also take care of exterior maintenance and repairs. 

Another Manitoba initiative seeks to blend this quick-build idea with the province’s long-running policy of automatically putting daycare spaces in new schools: the province is working to add standalone, pre-fab daycare facilities when school divisions or post-secondary institutions are planning to expand, wherever space allows.

“There’s been a lot of work in Manitoba to look at all of these different types of public sector partners…. Who can we build with?” Whiteford said from Winnipeg. 

“Even with our post-secondary institutions, they were so keen because they could see the benefit” for students struggling to access higher education due to lack of child care.

Funding administration

For Ontario daycares signed up for the CWELCC deal, implementing their province’s funding formula and reconciling it with their existing budget and accounting has been a learning curve, according to Danielle Wittick, director of programs for NYAD Community Inc., a non-profit operating in seven Toronto District School Board locations in Scarborough, Ont. The administrative challenge was also cited by operators in other provinces.

In the initial stages of CWELCC, fees for families were frozen, but inflation saw rent and other costs rising dramatically. That meant a shortfall where “instead of being in the plus [due to the new money], we were all in the negative,” Wittick said, adding that delays in funds actually flowing through forced some operators to close. 

Lack of detailed information and communication have also shaken up operators. For instance, in Ontario, a new adjustment is coming to the province’s funding formula and operators say they have had a short timeline to submit the required application. “Everyone’s scrambling [and] there shouldn’t be scrambling, especially now that we’re going into Phase 2,” Wittick said.

Ontario’s evolution from the earlier fee-replacement approach to a cost-based one also sparked a protest at Queen’s Park by a group of for-profit daycare operators last month. 

“We’re actually not asking for this program to go away or for parents to lose access to affordable childcare, but what we’re concerned about is that the quality of the care that families are going to be receiving in our centres is going to be declining under the restrictions of this program,” Alberta daycare operator Krystal Churcher said during a different protest on Parliament Hill on Oct. 24.

As chair of the Alberta Association of Child Care Entrepreneurs and a vocal critic of the federal plan, Churcher is calling for “no-strings attached” on the daycare funding to provinces.

The federal government set central guidelines for provinces — make daycare affordable, expand spaces, improve wages — but gave each wide latitude, says Susan Prentice, a child care policy expert and professor at the University of Manitoba in Winnipeg. That’s why there are 13 different agreements.

“It’s completely appropriate that there should be accountability [with] the money transfers from Ottawa to provinces,” she said. “The strongest and most stable early learning in child-care systems are one where the service itself gets the funding and the service itself operates with some stability, providing affordability to parents. This is the best stewarding of public dollars.”

Atkinson fellow McCuaig feels CWELCC has made phenomenal progress, but there’s much work ahead to continue adding high-quality daycare spaces, get kids into those spots and support the workforce needed.

“To make this a success, it needs more money [from both federal and provincial governments]: $30 billion sounds like a lot of money, but when you spread that across the country it’s not much,” McCuaig said, noting that some provinces are still “sitting on” their funds. 

Even if the 250,000-space benchmark is achieved and filled, that’s still only about 59 per cent of the families seeking child care, she added. 

“Our goal should be that every child whose family wants them to participate should have that chance.”