3.2 Policy developments: The provinces and territories - Funding

Federal transfers to provincial and territorial governments for early childhood programs have been uneven; still, virtually every jurisdiction has increased spending.

Quebec’s 2007 plan to increase state-subsidized child care spaces by 20,000 over four years was completed in two30 and it committed to funding another 15,000 spaces in 2011. Alberta also added 20,000 additional spaces, surpassing its goal of 14,000,31 and British Columbia’s child care spots jumped by 10,000 with plans to add an additional 1,000 spaces each year for five years.32 Manitoba’s spaces will grow by 6,500, Saskatchewan’s by 3,500 and New Brunswick is developing its strategy for an additional 10,000 spaces, while Prince Edward Island moved to the front of the line with a newly designed early years system supported by a one-third increase in its early childhood budget.33

Efforts have also been made to include children with special needs in mainstream services. Newfoundland and Labrador, Nova Scotia, New Brunswick, Manitoba and the Yukon have devoted new resources and staff to support the integration of children with special needs. Newfoundland and Labrador, Nova Scotia, New Brunswick, Alberta and the Yukon have also targeted underserved groups, including infants and families requiring non-traditional and seasonal care. Manitoba has increased the supply of part-day nursery school to provide more early learning options for families, and Nova Scotia has extended its operating grants to part-day and school-age programs.

A number of jurisdictions have taken steps to address child care affordability for parents by increasing their child care subsidy ceilings (Saskatchewan, Nova Scotia, Yukon, Newfoundland and Labrador, Alberta) and/or by changing the eligibility criteria to allow access for more parents (Ontario, Quebec, Nova Scotia, Newfoundland and Labrador and the Yukon).

Education systems have also augmented their investments in early childhood. British Columbia expanded Strong Start, a school board operated kindergarten readiness program now operating in over 300 schools. Ontario’s Parenting and Family Literacy programs have expanded from 80 to 145. Nova Scotia continues to support a few early learning programs for 4-year-olds, and British Columbia, Ontario and Prince Edward Island have added fullday kindergarten to their schools, while Newfoundland, Manitoba and Saskatchewan have it under consideration.

But public funding for early childhood services still remains low and, on the child care side, is primarily directed to priming the market, encouraging operators to establish or expand services.

Public funding for regulated child care takes two approaches:

  • Funding families – through fee subsidies for low-income parents, or through tax deductions or credits.
  • Funding programs – usually through operating grants to offset wage costs or to support the participation of children with special needs, and onetime grants for capital, equipment and start-up.

All provinces and territories provide some form of direct operating funding to child care programs. Direct funding takes the pressure off parent fees and provides a level of stability to programs that parent fees alone cannot provide. Quebec, Manitoba and Prince Edward Island are the jurisdictions with more publicly managed services, including assured operating funds, along with provincially established wage rates and parent fees.

How much governments allocate to child care makes a difference, but how the funding is directed is also a factor. Funding into operating grants appears to have a positive impact on wages and program stability, whereas funding through fee subsides or tax transfers has little or no effect.

Quebec, with the highest operating grant and a low, government-established fee, has the highest average wage rate for ECEs working in child care centres in the country. Interestingly, in Quebec, when parent fees rose from $5 to $7 daily and operating grants were correspondingly reduced, many programs went into deficit. Observers speculate that even at low levels, parent fees are not a reliable source of funding for child care.34

Figure 5.6

With a market driven service, other influences also come into play. British Columbia, Alberta and Ontario have a higher percentage of families with incomes that permit them to pay the full fees. But even high incomes cannot compensate for the low level of operating funding for child care services.35

The funding methodology also determines who participates in programs. Government subsidy levels often do not match the fees licensed centres must charge to attract and keep qualified staff. Lowincome families are unable to pay the gap between the fees charged and the subsidies governments provide, forcing them to settle for less regulated options.

Saskatchewan and Manitoba flow fee subsidies only to non-profit providers. Continued funding to programs outside the Early Years Centre network is under review in Prince Edward Island. Until recently, no jurisdiction made capital funding available to commercial operators, leaving it to owners to finance their own property. The decision by Alberta, British Columbia, Nova Scotia and New Brunswick to extend capital funds to commercial interests has been accompanied by the expansion of commercial child care chains. For the first time, a publicly traded corporation, the Edleun Group, with ties to the now defunct Australian giant ABC child care,36 boasts it will become the largest child care chain in Canada.37

Figure 5.7

International research indicates commercial child care chains drag down program quality and undermine public accountability.38 A commercial presence does not increase the number of child care spaces since chains are more likely to buy out independent operators than establish new programs.39, 40

Canada has other big commercial operators, including Kids and Company that specializes in workplace child care. However, foreign chains present a new twist. With an established presence in Canada, corporations are entitled to equal treatment under World Trade Organization and NAFTA regulations. Government policy will not be able to differentiate between foreign and domestic operators or, potentially, between corporations and public operators such as school boards.41 The increasing presence of big child care chains is likely to exacerbate existing concerns with service access, affordability and quality by impeding the integration of child care with education.

Alberta has taken other steps to clear the way for corporate child care. It has backed off from mandatory accreditation of child care programs, and in 2007 it removed regulations on the size of child care centres. The maximum number of children permitted in a centre was previously 80, but with size deregulation, corporate centres that look after 200 or more children are possible. “At this size, corporate day cares will be larger than some of our local elementary schools,” says University of Calgary sociologist Dr. Tom Langford, author of Alberta’s Day Care Controversy.42

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