New way of funding $10-a-day child care in Ontario coming in 2025

Ontario has told child-care centres that it will implement a new way of funding the national $10-a-day program — something operators have urgently called for — starting in 2025.

Ontario has told child-care centres that it will implement a new way of funding the national $10-a-day program — something operators have urgently called for — starting in 2025.

Child-care centres, including the YMCA, the largest operator in the province, have been warning about the risk of closures if the funding formula isn’t soon updated to cover the actual cost of providing care, rather than just replacing the revenue they’ve lost from the now-discounted fees.

After several delays, the province told them in a memo last week that the new structure will be in place for next year.

“The priority for us is to provide certainty to the operators,” Education Minister Stephen Lecce said in a recent interview.

“We’ve given lots of time now, half a year of certainty to prepare for that transition because the priority is to make sure we keep operators in the system so that we can provide affordable child care to hundreds of thousands of families.”

Traditionally, child-care centres have raised parent fees when they faced rising expenses such as staffing costs, catering, rent, heating and supplies. However, any operator that wanted to sign on to the national plan had to freeze their fees in March 2022, and many had voluntarily frozen them since 2020, not wanting to raise rates during the COVID-19 pandemic.

That means the government’s revenue replacement model is based on rates that don’t reflect the true current cost of providing child care, and the amount Ontario has factored in for inflation — 2.1 per cent for 2024 and 2.75 for 2023 — is not cutting it, some operators say.

The province has put more than $98 million this year toward “emerging issues” for when operators aren’t able to cover non-discretionary costs such as rent increases.