Public Accounts Committee on Nov. 27th, 2025

[Paul Thompson]

We are optimistic that the last year of the agreement will be the biggest year for space creation. It's too early to say whether the target will be met, but we're working very hard towards that. We have definitely seen the dynamic that you've referred to, in that as you lower the price of child care, demand significantly increases.

One of the constraints in increasing capacity has indeed been the supply of early childhood educators, but we have seen significant labour force growth in that space. There's been almost a 30% growth in the number of early childhood educators since 2021, when the program was launched. That's a positive sign that capacity is gradually coming on. This strength will enable not only expansion but better utilization of the expanded spaces. There's no point expanding a space if you don't have the staff to operate it. Those two have to work in tandem, and there's been an emphasis on both.

[Tom Osborne, Liberal, Cape Spear, NL]

I know the AG report found that affordability has improved pay and training. Part of this was to recognize early childhood educators for what they do. If I'm putting my children into early childhood education, I am trusting that they will prepare my children for the K-to-12 system. I am calling it early childhood education, because it's not just child care. It's early childhood education.

Having the system more regulated and more professional means that the professionals who educate our children and prepare them for school should be paid more than what they were. I think there's been huge success in that as well. I'm wondering if you can speak to that.

[Paul Thompson]

Absolutely. This has been a big part of the effort as well. It's about affordability and space creation, but it's also about quality. One of the ways to underpin quality is the quality of the workforce—the competencies and training—but also wages. We've worked with provinces to encourage the development of wage grids. Ten of 13 jurisdictions now have a wage grid where early childhood educators can progress their salary with different levels of experience.

It's early days in terms of other benefits, but we're pleased to see that three of 13 have pension programs in place. Four of 13 have benefit programs in place. Those kinds of measures are critical to attracting and retaining the talent needed to assure quality.

We continue to work with provinces on other aspects of quality assurance for the system as well. A core part of it is the quality of the workforce and the associated salaries.

[The Chair, Conservative, John Williamson]

Thank you.

I'm afraid that is your time, Mr. Osborne.

Mr. Lemire, you have the floor for six minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Mr. Thompson, child care is a provincial responsibility. In 1997, Pauline Marois, the former premier of Quebec, announced the creation of early childhood centres with a fixed cost of $5 per day. Let me remind you that this initially covered all children aged four and, subsequently, those under four. It has been an incredible success, which Ms. Freeland noted when she created the federal program.

For almost 30 years, Quebec has been a pioneer in this field, working independently.

Why do Canada's other provinces need federal help to set up this type of system?

[Paul Thompson]

Thank you for the question.

The Quebec model was indeed an inspiration when we created this program. The level of investment, the benefits for families and the impact on the job market, among other things, demonstrate the impact of these investments in Quebec.

I think the Quebec model is asymmetrical and that it provides greater flexibility. There is recognition of the progress already made in Quebec. The goal was to invest and improve the system across the country, trying to benefit from the same investments as in Quebec.

As far as provincial jurisdiction is concerned, the model provides them with a great deal of flexibility. Many aspects are under the jurisdiction of the provinces and territories, but we have overall targets with regard to the returns on investments. However, details on the ground are under provincial and territorial jurisdiction.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

You are correct in noting Quebec's success, which is historic. This success was achieved thanks to the money that was transferred as part of the program.

What I observe is that the federal government wants to interfere in provincial jurisdictions. It has hit me even harder since I have been an MP. The federal government wants to put mechanisms in place to ensure that fewer projects are carried out. Indeed, the rules and standards are based on what happens in Ontario or elsewhere, and they are very poorly adapted. This is particularly true in the housing sector.

In Quebec, this results in structural duplication. In the case of the child care program, we decided to transfer the money to Quebec, and that has been working very well. There is also less spending on civil servants. The report showed that Quebec was more successful than other provinces with federal money.

Targets changed, and then there was inflation. In 2021, Quebec's target was $10 per day, and this target has been reached. In Canada, in March 2024, the target was around $16.50.

The investment of public funds means that it's almost double in other provinces.

How can you explain this discrepancy?

[Paul Thompson]

I would say the provinces have a lot of flexibility when it comes to managing the details.

When it comes to administering day care fees, decisions about location and investment are left to the provinces, which know their own needs.

In terms of progress, it was clear that there is a lot of pressure on the system. The rate of inflation and the cost of creating new spaces have risen, as have operating costs. That is why we are at $16.50, and not yet at $10.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

However, the constraints should be the same in Quebec. Personally, I think this program is a success, especially in Quebec, because the money has been transferred to the provinces, unlike the Canadian dental care plan. For that plan, a private company was offered $2 billion to manage the distribution of cheques, essentially. In my opinion, that is an incredible waste of money. The choice was made not to trust the provinces and the systems they have put in place.

How much do you estimate the program's management and administrative costs to be? How many civil servants are working on it?

How much does it cost to manage this program?

[Paul Thompson]

Is your question about the federal government or the entire administration?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I am talking about your department.

[Paul Thompson]

I don't have the figures in front of me as far as our department is concerned. However, our secretariat is responsible for receiving and analyzing data for each province. This team also handles negotiations. We are currently negotiating the extension of agreements with the three remaining provinces.

We could easily provide you with this information, but I don't have it at hand.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I invite you to forward it in writing to the committee.

The federal government has signed an agreement on child care funding that will expire in 2031.

What will happen in the other provinces if the federal government withdraws in 2031?

Will child care systems be threatened?

[Paul Thompson]

My colleague can answer your question.

[Catherine Adam]

Could you repeat the question?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Is there a mechanism planned for when the funding ends in 2031?

There's a lot of investment in infrastructure, and people depend on federal investment.

What are the possible consequences if the federal government withdraws its funding because child care is not part of its jurisdiction?

[Catherine Adam]

A bill has been introduced in Parliament. The federal government has promised to continue investing.

However, there are always unforeseen circumstances. Examples show that the system works, even if it's completely new. It gives families who want to access the system the chance to secure a child care space. It allows families to manage their own budgets.

It's less expensive.

Many families are able to access child care spaces. This economic policy really helps families.

In my opinion, the government has clearly expressed its intention to continue participating in the system. There are undoubtedly areas for improvement, but we must continue to make progress. There's a considerable investment involved.

[The Chair, Conservative, John Williamson]

Thank you very much.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I feel the passion you have for your program.

[The Chair, Conservative, John Williamson]

Thank you very much.

We now begin the second round of questions.

Ms. Kusie, you'll have the floor for five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Chair.

Thank you to our witnesses for being here today.

Ms. Hogan, your report showed that between 2020 and 2023, the number of parents who reported difficulty finding care for their children increased by more than 30%. This difficulty came after the program commenced.

My colleague provided his insight into why he thinks this might have possibly been. I want to ask you directly why you think this dramatic increase occurred after the commencement of the program.

[Karen Hogan]

I can simply speculate here, because the federal government hadn't really gathered information about whether the new spaces were actually being used and what the root causes were. In fact, they went to Statistics Canada in order to get that.

I would start off by saying that when you raise costs, obviously increased demand is going to be there. The Statistics Canada survey highlighted that many people were saying the new spaces created didn't meet the needs of their children if they had special needs, that the timing didn't fit their work schedule or that space wasn't available in their community.

I think this speaks to the need for having the provinces provide information federally so they can have a better picture of how it's not simply about creating spaces, but about creating them where the need exists and about helping influence how that should be. Then you can speak nationally to whether or not it's meeting the needs of families.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Ms. Hogan.

With that, I'll go to Mr. Thompson.

As the Auditor General indicated, outside of Statistics Canada, your department didn't properly track or assess data. Can you tell us, please, how many families are currently on wait-lists?

[Paul Thompson]

That, unfortunately, is a data gap in the system. Most provinces do not maintain centralized waiting lists. Individual providers have their individual wait-lists, but they would include the duplication of a lot of names.

This is one of a number of issues where we fully agree with the AG's recommendations, and we have work under way with provinces to provide better reporting. In fact, we just launched a portal a week ago that will provide more timely and accurate information on the progress being made in space creation.

We're going to continue to work with provinces as they upgrade their ability to report to citizens within each province and territory.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Ms. Hogan, do you believe that if the government was following through on its own agreements and ensuring that guiding principles were being met, wait-lists would be shrinking and not growing by 32%, as you noted? We're hearing about the will to have these things, but should the government have included within the agreements more benchmarks, if you will, or anchors, as we've come to call them, financially to ensure that spaces are being created in an effort to receive the funding?