Toronto daycare exiting $10-a-day program, citing funding uncertainty

A Toronto daycare is pulling out of the national $10-a-day program, saying the funding model has saddled the centre with unsustainable levels of debt, leaving families scrambling to either find other care, absorb an $800 monthly increase to their budgets or leave the workforce.

Jacqueline Stein’s two-year-old son has been at Ola Daycare for a little over a year and, earlier this month, was given notice of the centre’s withdrawal from the program that currently cuts fees in half for families.

She had been paying less than $700 a month thanks to the centre’s participation in that program. But now, Stein and other parents with children at Ola Daycare get just 30 days to pull their kids out of that centre with no financial penalty, ahead of fees going up to $1,433.25 a month for preschoolers as of March 1.

“Knowing that we had 30 days to make a decision, knowing that daycare waiting lists are 12 months or longer, what do you do? Where do you go?” she said.

“Who’s to say we don’t pull him out from Ola, put him into a daycare across the city, and then three months from now, that daycare goes, ‘You know what, this is not working for us. We’re going to opt out of the program.'”

Ola Daycare’s decision comes as other child-care operators, including the largest in the province, are warning that centres are at risk of closure if the province doesn’t soon update how it compensates them under the $10-a-day program.

While cost savings are being offered to families, the cost burden on operators has grown, the YMCA told the province in a pre-budget submission.

Kristin Lillyman’s three-year-old son is also at Ola Daycare, and, like Stein, said she has been happy with the care at Ola. She wants to see all three levels of government work toward a solution.

“Ola is not alone here,” she said. “This is, I think, the tip of the iceberg.”

Some of her fellow parents at the centre – mothers – are weighing leaving the workforce entirely, Lillyman said. “This is about women,” she said.

“This is about their economic participation, and just so much bigger than just our one daycare.”

The operator of Ola Daycare had no comment when contacted by The Canadian Press. The email to families said the daycare did not make the decision lightly, but did so after reviewing “continually changing” guidelines and waiting for funding certainty that has not yet come.

The centre’s monthly debt is growing “by a significant amount,” and if it doesn’t pull out of the $10-a-day program and raise rates to match inflation, the centre could be forced to close by the spring, the operator wrote.

Traditionally, childcare centres have raised parent fees when they faced rising expenses such as staffing costs, catering, rent, heating and supplies. However, any operator that wanted to sign on to the plan had to freeze their fees in March 2022, and many voluntarily froze them in 2020, not wanting to raise rates during the COVID-19 pandemic.

That means the government’s revenue replacement model is based on rates that don’t reflect the true current cost of providing child care, operators say, and the 2.1 per cent increase Ontario has factored in for 2024 to account for inflation is not nearly enough.

The province does not track how many operators have left the $10-a-day program, but in Toronto, the city says seven have withdrawn. The city also noted that child-care operators have to give the city 60 days’ notice, but 30 days to families.

“We do encourage them to give as much notice as possible,” children’s services general manager Shanley McNamee wrote in a statement.

Ontario’s Ministry of Education said extending the 30-day opt-out period isn’t being considered at this time. It also noted it allocated $75 million to support “emerging issues” for operators whose revenue is not enough to cover their non-discretionary costs.

“While Ontario will continue to increase funding annually to operators, starting this month, we will commence a review of the federal deal and vigorously advocate for a long-term increase in funding to better support operators and families,” Isha Chaudhari, a spokesperson for Education Minister Stephen Lecce, wrote in a statement.

A spokesperson for Jenna Sudds, the federal minister of families, children and social development said the minister continues to meet with her provincial counterparts, providers and families to hear about progress and challenges.

“We encourage the province of Ontario to listen to, and work with, providers, parents and the workforce to meet these goals and build a system that provides high-quality, affordable and inclusive child care to families,” Soraya Lemur wrote in a statement.

The YMCA and others are pushing for a “full cost recovery” model, to fund the true cost of providing child care, rather than just replacing a percentage of the parent fees.

For Stein, the cost of keeping her son at Ola Daycare is not being able to set aside money for his education in the future, not signing him up for extracurricular activities, and not travelling to visit his grandparents, who he hasn’t seen in two years.

I feel like it’s almost like we’re becoming, first of all, the guinea pigs for this program, which is not what I wanted to begin with,” she said.

“But also the problem is we’re passing our kids around like hot potatoes right now, pulling them from one daycare into another because of financial issues, trying to make the best decisions for our families and we’re exhausted.”