For-profit child-care group concerned about provincial granting agreement

For Scott Quan and his family, the Alberta child care affordability grant has been a game-changer.

The government program has meant both he and his wife can work while their three children are looked after in daycare programs.

"We can afford to do both and still manage finances appropriately," Quan said in an interview.

But then this week he received notice that his Lethbridge, Alta. daycare was considering opting out of the program, saying it's a financial burden. If that were to happen, Quan says it could cost nearly three times more to stay in while looking at years-long waitlists elsewhere.

"There are 60 kids at this childcare facility. And I'm sure all of these parents are now struggling with this news."

The Association of Alberta Childcare Entrepreneurs, which represents some 20,000 mostly for-profit daycares across the province, encouraged its membership to outline concerns to parents after seeing the latest agreement from the province set to come into effect in the new year.

"[Members are] feeling very stressed right now, very frustrated," Krystal Churcher, the association's chair, said Tuesday. 

"A lot of operators are feeling that they're just not going to make it financially."

The federal-provincial arrangement — touted as $10-a-day daycare, although that target isn't set to be reached until 2026 — uses federal funding to limit child-care fees through grants to operators, who are reimbursed for costs per child based on a fixed rate set out in the provincial implementation plan.

The initial phase of the agreement was first offered in January 2022 and covered roughly 50 per cent of costs. Churcher said the next version of the agreement will cover more like 70 or 80.

She said one major issue is the scheduling of that payment. Parents pay fees — now targeted at $15 a day per child — at the beginning of the month. At the end of the month, operators submit claims to the government and then are supposed to receive the grant funding within 5 to 10 business days.

Churcher, who also owns a child-care centre in Fort McMurray, Alta. and runs another out of a school in Calgary, said that creates cash flow issues as operators must front costs like rent, insurance and wages before the grants are paid out.

"We're still being used as unpaid fiscal agents for the government programming."

She said it comes as operators struggle financially with the costs of inflation on food, utilities, and more. The agreement means operators cannot raise child-care fees but it does offer Cost Increase Replacement Funding  — six per cent for operators who previously received the increase funding or three per cent for those who did not.