Ontario’s child care shortage demands government leadership instead of for-profit expansion
Recent calls from Ontario’s Minister of Education, Todd Smith, to walk back the federal agreement limiting expansion of for-profit child care providers have raised concerns among advocates. Ontario’s agreement caps for-profit expansion at 30% of the total of new spaces. Minister Smith blames the child care shortage on the federal government and calls for lifting this cap.
Economist Gordon Cleveland argues, however, that Ontario’s failure to adequately expand non-profit and public child care has been a key factor in the province-wide shortage and a clear violation of the Canada-wide agreement.
Ontario knew there would be a substantial shortage of spaces
In November 2022, the Financial Accountability Office of Ontario (FAO) reported that at $10 a day, Ontario parents would need 300,000 additional child care spaces. Ontario’s planned addition of 71,000 spaces between 2022 and 2026 fell significantly short. The FAO concluded that when parent fees reach $10 a day, approximately 25% of children under six will be unable to access these funded spaces.
Ontario knew what to do to expand child care
The FAO states that uncertainties over ministry reimbursement of future cost increases to child care providers could hinder expansion. When child care providers doubt that revenues will cover costs, expansion stalls.
Ontario has done very little to facilitate expansion
Ontario underestimated the challenges of expanding child care, assuming it would occur naturally without significant government intervention. Despite anticipating a creation of 71,000 new spaces, Ontario’s projected “natural growth” (48,459 spaces) has failed to materialize.
While both federal and provincial governments share responsibility for child care infrastructure in Ontario, the federal government has recently committed over $1 billion in reduced-interest loans and $625 million in capital grants for child care expansion. Ontario, as the most populous province, will receive the largest share. The province should leverage this support to help families in desperate need of affordable child care.
Lessons from Quebec’s child care model
Citing Quebec’s 2023-24 Auditor General report, Cleveland warns that for-profit child care providers pose greater risks due to their focus on profit over quality despite their ability to expand quickly. Quebec’s Minister Mathieu Lacombe has warned against expanding private, for-profit child care. To achieve $10/day child care, Ontario must avoid Quebec’s mistakes.
Cleveland estimates that about 75% of the 51,000 new spaces created in Ontario since 2019 are in the for-profit sector. He points out that “half of these new spaces can charge whatever fees they want, rather than being affordable spaces.” So far, only 25,500 of the promised 86,000 new child care spaces fall under the Canada-wide Agreement and its affordability commitments.
As Cleveland summarizes: “Ontario is taking federal money intended to build a publicly-managed, affordable and accessible high quality child care system and it is not doing what is necessary to provide spaces for children and families.”
One thing that families, providers and advocates agree upon is that Ontario urgently needs a lot more child care expansion. However, Ontario’s failure to uphold its agreement with the federal government has undermined key elements needed for successful child care expansion: generous funding formula to cover actual costs, competitive wage grid to retain educators, and most importantly, affordable spaces for families.
Read Cleveland’s full articles:
Who’s To Blame For Child Care Shortages In Ontario?
Ontario Is Violating the Early Learning and Child Care Agreement