Ontario weakened $10/day daycare rules. Now Ottawa wants answers

Ottawa is demanding answers from the Ford government after Ontario removed limits on profit-making by daycare owners who receive federal funding under the national plan to build a $10-a-day child-care system.

In a letter to Ontario Education Minister Stephen Lecce, the federal government questioned the province’s recent changes to funding guidelines for child-care operators who join the national daycare program — and raised worry that some taxpayer money won’t be used for its intended purpose of reducing parent fees and improving child care services.

The letter, obtained by the Star, states that the changes to the funding guidelines, which the province released in August, may not fulfill Ontario’s promise in the deal to implement stringent cost-controls.

“Particularly, I am concerned with the removal of all details on undue profits and eligible expenditures that were previously included in the funding guidelines,” writes Karina Gould, Canada’s minister of families, children and social development, who oversees the national child-care plan . “With no capacity to review and limit reasonable expenditures and profits, the updates made to the funding guidelines may run counter to the objective of ensuring the sound and reasonable use of public funds.”

Responding to questions from the Star about the letter, Lecce’s spokesperson, Grace Lee, said: “The core element of the cost control framework remains in place and has been since Ontario signed the agreement. With parent fees frozen as of March 27, there is no room for a program to use the funds in any other way than to lower child care fees and increase the wages of child care workers.”

Lee added that Ontario is focused on getting both non-profit and for-profit operators “on board,” to ensure that the province is “putting money back into parents’ pockets and preserving parent choice.”

“We continue to meet all obligations under the agreement, including all formal reporting requirements,” Lee said.

The national daycare program promises to dramatically expand and transform the current market-based system to one that is universally accessible, affordable and largely publicly funded.

However, in Ontario, where families pay some of the highest fees in Canada, the changes to the funding rules triggered alarm among policy experts and non-profit child care advocates, who said the government funding earmarked to build the system is already tight.

“The federal government has a keen interest to watch carefully and to intervene in some way,” Morna Ballantyne, executive director of the national advocacy group Child Care Now, said in an interview before the Star obtained Gould’s letter. “Otherwise, you may end up in a situation that’s not only counter to the federal government’s vision… but it is actually not sustainable.”

While the specifics of the child-care deals that each jurisdiction reached with Ottawa are different, they all support the federal vision of the national system as one that is designed primarily to fund and grow not-for-profit child care spaces.

Ontario’s existing for-profit daycares — which account for roughly 30 percent of the province’s licensed spaces for children under 6 — are eligible to join the national program and receive public funding to lower parent fees.

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