Ontario’s new child care funding formula: A step forward, but more needed
The Ontario government has finally unveiled a long-awaited cost-based funding model for child care programs, set to take effect on January 1, 2025.
Since the introduction of the federally-funded parent fee reductions, the Ontario government has increased public funding to licensed providers to make up for the loss in parent fee revenue but the level of funding is far short of what quality programs cost to deliver. The new funding approach is intended to address the gap.
However, the new funding formula fails to address the critical issue of fair compensation for the early learning and child care workforce. The Ontario Coalition for Better Child Care (OCBCC) and Association of Early Childhood Educators Ontario (AECEO) have consistently advocated for a publicly funded salary scale of at least $30-40 per hour for Registered Early Childhood Educators (RECEs) and $25 per hour for non-RECE staff. Unfortunately, the Ontario government is still refusing to put in place a province-wide wage grid and the new funding formula does not encourage more spending on compensation. In fact, the funding formula de-incentivizes spending on compensation because operators who pay staff less will have more public funds for other operational costs, or to improve their margin of profit or surplus.
The question of how much publicly funded profit should be allowed in the Canada-wide Early Learning and Child Care (CWELCC) system has been highly contentious across the country. Regrettably, Ontario’s new funding formula will give operators public funding to finance profits (in the case of for-profit operators) and surplus (in the case of non-profit providers). This additional funding will amount to approximately 8.4 per cent of the funding operators will receive to cover operational costs. Non-profit providers are of course required to put any surplus they accumulate back into their operations but for-profit operators can pocket the money. The Ontario government’s decision to fund profit-making in this way goes against the recommendations outlined by economist Gordon Cleveland in the OCBCC & AECEO Policy Brief on Ontario Child Care Funding Formula.
The OCBCC and AECEO will be closely examining the details of the new funding formula and engaging with government officials to seek further clarification and advocate for improvements. In September, both organizations will be hosting information sessions to share their findings with the early learning and child care community.
- Operators, board members and community organization leaders: Wednesday, September 11th at 12:00 PM. Register here.
- Educators, child care workers, ECE students: Thursday, September 19th at 7:00 PM. Register here.
Child Care Now will continue to monitor the development of this important mechanism, and joins the OCBCC and AECEO in urging the Ontario government to prioritize the well-being of early childhood educators and child care workers by integrating a fair and equitable compensation structure in the child care funding formula.