Ontario Daycares in a Money-Losing Bind

Ontario Daycares in a Money-Losing Bind

Ontario weakened its $10-a-day child care funding rules. Now the federal government is demanding answers to questions about who is paying the billions of dollars in lost costs.

The money-losing changes were announced today by Ontario’s children’s minister, who says they are a result of the province’s decision to raise co-payments for daycare providers to $12.76.

The new rules were supposed to be implemented by April 2018 but have been held over until 2018 because the province wants to make sure its daycare providers are in a position to properly absorb the cost increases.

Ontario Minister of Children and Family Services Lisa MacLeod says the province will now require more than 20,000 Ontario daycare providers to take at least a 4 per cent pay cut.

The province wants them to use the money raised by the tax hike they were expecting to pay for the extra co-payments they’re now required to use.

The Ontario Daycare Association says the new rules are unfair to Ontario daycares given the province’s spending commitments and the fact the co-payments will be refunded to daycares at the end of the year.

The Association says it doesn’t expect the new rules to be fully implemented until the spring of 2019.

Here’s a timeline of how daycares in Canada got stuck in this new bind.

Decisions were made before the tax hike

The provincial government is only now admitting that it was forced to make the changes to the daycare funding rules when the tax hike on the province’s wealthiest residents was announced in late February.

According to documents obtained by the Toronto Star, the province told the Finance Department about the changes after reading about them in media reports suggesting the new cost sharing would hit Ontario’s daycare providers hard.

The documents say it all started when the provincial government received a letter from the daycare providers in November 2016. The letter claimed the government is not following up on its promise to expand the availability of childcare for families living in poverty.

Ontario responded that daycares were already being heavily impacted by the increases in the cost of co-payments, such as the increase of the co-pay for full-day care in Ontario from $18.50 to $30.50 by 2023.

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