Mr. Speaker, through budget 2021, the Government of Canada is investing more than $27 billion over five years (2021-22 through 2025-26) to build a Canada-wide early learning and child care, ELCC, system with provinces and territories, PTs. When combined with other investments, including in indigenous early learning and child care, IELCC, up to $30 billion will be invested in support of ELCC over the same period. The goal is for families in Canada to have access to regulated ELCC for an average cost of $10 a day by March 2026.
On March 27, 2022, the governments of Canada and Ontario entered into the mutually agreed-upon Canada–Ontario Canada-wide early learning and child care agreement to deliver on average $10-a-day child care for Ontario families by the end of March 2026 and support the creation of 86,000 new licensed spaces by the end of 2026.
As per section 2.1 of the agreement, Canada and Ontario committed to a number of objectives and targets related to access to ELCC.
Ontario commits to using federal funding to increase the net number of licensed spaces for children under age six by flowing funds by the end of fiscal year 2025-26 to support the creation of 76,700 spaces, from 2019 levels, by March 31, 2026, and 86,000 child care spaces, from 2019 levels, by December 31, 2026.
In creating these child care spaces, Ontario commits that federal funding will be exclusively used to support licensed child care and that federal funding will be used predominantly to support the creation of not-for-profit child care spaces to ensure that the existing proportion of not-for-profit licensed child care spaces for children age 0 to 5 will be maintained or increased by the end of this agreement.
For further clarity, at the end of this agreement, the proportion of not-for-profit licensed child care spaces for children age 0 to 5 compared to the total number of licensed child care spaces for children age 0 to 5 will be 70% or higher.
In addition, as noted by the Government of Ontario in its March 28, 2022, news release announcing the Canada-wide agreement, the agreement includes the “protection of all for-profit and non-profit child care spaces, helping to support predominantly female entrepreneurs across the province who provide high-quality child care services.”
Ontario will receive approximately $10.2 billion in federal investments to support its commitments as per the agreement, including commitments to support the creation of 76,700 new affordable child care spaces and lower child care fees to an average of $10 a day by March 2026, and creating a total of 86,000 spaces by December 31, 2026. This $10.2 billion of federal funding is in addition to other federal investments such as approximately $765 million through the Canada-Ontario early learning and child care agreement, 2021 to 2025; close to $150 million through the Canada-Ontario early childhood workforce funding agreement, 2021 to 2022; and over $135 million through the 2023-26 Canada-Ontario ELCC infrastructure agreement. In total, Ontario is scheduled to receive over $11.3 billion in federal funding between 2021-22 to 2025-26 to support child care in the province.
On August 15, the Government of Ontario announced a new parent fee cap of $22 a day along with a new cost-based funding formula for child care operators enrolled in the Canada-wide ELCC system, both of which will come into effect in January 2025.
On October 21, Jill Dunlop, Ontario Minister of Education, wrote to the Minister of Families, Children, and Social Development to note the high interest of for-profit providers in some service system managers in Ontario to join the Canada-wide ELCC system. In this letter, Minister Dunlop highlighted challenges in creating child care spaces in particular regions due to the 70-30 ratio of not-for-profit to for-profit spaces that Ontario committed to uphold in the Canada-Ontario Canada-wide ELCC agreement. The Government of Canada and the Government of Ontario are in ongoing discussions to support the successful implementation of the Canada-wide ELCC agreement.
Canada-wide ELCC agreements predominantly support not-for-profit, public and family-based child care providers, but given the unique ELCC landscape in each province and territory, the Government of Canada recognizes that licensed for-profit providers also play a role. Provincial and territorial early learning and child care systems vary in terms of the proportion of ELCC spaces that are not-for-profit or for-profit.
While Ontario and Canada agreed to keep the proportion of not-for-profit child care spaces at 70% or higher, in New Brunswick, the ratio of for-profit providers is higher than not-for-profit. Under the Canada-New Brunswick Canada-wide ELCC agreement, New Brunswick committed to creating predominantly not-for-profit child care spaces, e.g. 2,000 of the 3,400 spaces to be created. All new child care spaces created are part of the province’s designation system, which ensures high quality standards and includes a market fee threshold to control fees charged to parents.
Due to the high demand and challenges faced in creating not-for-profit child care spaces in rural areas and in francophone settings in New Brunswick, additional flexibility was agreed to, allowing for the creation of a limited number of additional designated spaces in the for-profit sector in rural areas and francophone settings and as part of New Brunswick’s target to create 3,400 designated child care spaces by March 2026, as per the Canada-New Brunswick Canada-wide ELCC agreement.