Front Burner - Is $10 daycare in trouble?

Episode Date: February 1, 2024

The Trudeau government’s announcement in 2021 that they would bring daycare fees down to $10 a day within five years was a massive relief to many parents across the country. But two years after all the provinces signed on, this extremely popular program is clearly facing some bumps in the road: staffing shortages, massive wait lists, and daycares that can’t cover their costs. Today, Martha Friendly, executive director of the Childcare Resource and Research Unit, speaks to us about the growing pains confronting affordable daycare.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Damon Fairless. Early learning and child care is the national economic policy we need now. To pretty much any parent across the country, the Liberals' announcement in 2021 that they'd be bringing daycare fees down to 10 bucks a day by 2026 was a massive relief. That's why this budget commits up to 30 billion dollars to build a high quality affordable and accessible early learning and child care system across Canada.

By 2022 they had signed an agreement with every province and territory in the country. But now, less than two years in, cracks are beginning to show. The YMCA is warning that some of its child care centers could be at risk of closing if the province doesn't soon provide an update on how it plans to compensate the non-profit under the national $10 a day child care plan. Dozens of child care centers across Alberta are taking part in the first day of rolling closures to protest. They say the funding is insufficient and putting an unsustainable strain on operators. Calgary's Little World's daycare was locked up tight Tuesday to the frustration of parents and their kids. It's more about him and his needs not being met because the Alberta

government, the federal government, and child care providers cannot find a compromise. So today I'm speaking with Martha Friendly, Executive Director of the Child Care Resource and Research Unit. She's going to tell us about the growing pains facing affordable daycare. care. Hey, Martha, thanks for coming on the show. Appreciate it. Oh, and thank you for having me. Okay. So before we get into some of the problems and some of the concerns we've been hearing from childcare providers and from parents, I mean, I have to come clean. I've tried to understand it. I don't think I fully understand how the funding for the program works or it's supposed to work. So could we just start there?

Could you break it down in really simple terms for me? How's the $10 a day program funded? So this program is set up between the federal government and the provinces. The federal government's role is to provide the money to the provinces, to the provincial territorial governments, and some conditions. After that, the provinces and territories devise the way that the money gets to the service providers. So it works differently in the different provinces and territories.

And that's kind of the bit of the rub there. Okay. And I kind of want to get into that, but can you just give me kind of a straightforward example of like one province, how its providers are getting the money or how it's working in one case, just so I can understand it more concretely. Yeah. I mean, in every instance, the main thing that they've done with the federal money, which was quite a lot of money, was replace 50% of the parent fee with public money. So that meant that if a center was charging, in Alberta, for example, was charging $100 a day, now the parent would be paying, this is general, $50 a day. And the

money that comes from the federal government is basically going to that center to operate another $50 a day to replace the parent fee, which has been the first step at every province. And there are different ways that it works. For example, now they're all in the process of working out funding formulas, which hasn't really been done. So that's the general way that it works. It's from the federal government to the province to the center in order to operate. And as you mentioned, because they're in the process of working out the funding process, is that why we're seeing this variation in what parents in different provinces are paying? So

like in Manitoba, folks are already paying 10 bucks a day. In Ontario, a lot of people are paying close to $50. Is that why we're there? Part of it is historical. So the fact is that Manitoba, before this federal program came in, Manitoba was already charging parents. They set the fee. The province set the fee, as they have in Quebec and PEI. And now a number of other provinces do that. And the other

piece of what you're bringing up is the federal government had actually one of the conditions that they had set that wasn't to have come into play yet, was that all fees would have to drop to an average of $10 a day by next year. But some of the provinces exceeded that, and a number of them have already reached $10 a day across the board, Manitoba being one example. So there's variation in what goals they've achieved. And I guess the other thing that I want to say about that was in provinces where the fees are not set by the province. Ontario being a good example, or Alberta, where they still use market-based fees. So they're based on the previous fees before the federal government came in. There's an enormous range of what parents are paying.

Right. So I kind of want to get into some of the challenges or the problems that we're hearing about now. And I want to start actually with what we've been hearing from the daycares. So to take one example, here in Ontario, the YMCA, which operates a fifth of all licensed daycare spots, it's saying that a lot of their centers are operating at a loss. A lot of them are at risk of closing, they say, if they don't get more money from the provincial government. So can you help me understand what's going on there? Why are these centers having to run up

deficits right now? The reason is, is because of the way the money is coming from the province to the centers. And this is a similar problem in Alberta, but it's not a problem. This particular problem, how extreme it is, varies by province. But what we've been hearing a lot of in Ontario with the Y and other nonprofits and in Alberta with a small group of for-profits is the way the money is coming from the province to the centres to operate isn't doing it's not covering their costs. While the fees parents pay for child care have been cut in half with the provincial government replacing that revenue to centres using its share of federal funding it does not account for the rising cost of living, which would have traditionally been covered by centers raising fees.

Well, that's not possible under the $10 a day child care program. And in some in Alberta, what seems to be coming up is it's not quick enough. This issue has arisen in some of the provinces, but less so. And in some cases, the provinces have fixed it because it's quite fixable. This is an implementation issue. The provinces are putting variable amounts of provincial money into this program. And they haven't developed a good enough formula for how they would account for things like inflation. They have not yet developed a funding formula. In the case in Alberta, for example, the province had said the aim of this program, one of the aims is to reduce parent fees. So you can't raise your fees by more than 3%. But at the same time, we have inflation that exceeded 3%. I mean, I guess that's what I would say is that it's

incumbent upon the provinces because these are devised by the provinces to fix them. It's incumbent upon the provinces because these are devised by the provinces to fix them. But right now, it seems that the pinch we're feeling, the pinch that's being felt in several provinces, is really about implementing the payments from the province to the child care providers. Yeah, and if you were to be looking at some other provinces, and I don't want to point to Quebec as the be-all and end-all, but Quebec has had years of experience in this particular part of child care, which is publicly funding the provision of child care, which is basically what we're in the process of shifting to in the rest of the country. And this particular thing is not an issue in Quebec, if you want to use that as an example. And I think there are other provinces where this has gone more smoothly. Okay, so those are some of the challenges that the child care providers are facing.

Then there's the issues that parents are facing. So, you know, big one being there's not nearly enough spots. So you hear these stories, right, of people who can't, you know, come back to work because they haven't been able to get a spot in child care, even though they've basically, you know, called the place after they got pregnant. So how much has the federal program increased demand for daycare? Well, of course it increased. I mean, it was given that one of the barriers to parents was that it cost way too much money. So when they reduced the fees as the first piece of it, the provinces all set with the federal government in negotiations targets for expansion because everybody knew that it would increase demand. The problem really is there actually has to be much more of a planned and public approach to expansion. Because what we've done historically in childcare, and we've written about this, is we wait till somebody shows up and says, I'll start childcare over there. I did it

myself in a parent group several times. It could be an entrepreneur and says, I'll open up child care in this more lucrative area. So what we have are, across the country, many, many child care deserts. So overall, we don't have enough child care. We don't have enough child care more specifically for younger children, infants and toddlers, because it's always been more expensive to provide. A new report from the Canadian Centre of Policy Alternatives is highlighting just how dire the situation is in Canada. 946,000 are living in daycare deserts,

meaning at least three children per postal code are competing for a single spot. And we also, we have areas where there's no child care because in some rural communities, nobody has turned up to open child care. And from studying this for many years, it's quite obvious to me that if you want to expand child care, it has to be publicly led. And it hasn't really happened the way you can see it was taken on in other countries where, you know, they really develop childcare. Okay. So one of the main reasons there aren't more daycare spots is that, you know, there just aren't enough staff. That's been an issue for a long time. So can you help me understand why is it so hard for daycares to hire folks and retain

their staff? First of all, you have to keep in mind that this has always been a problem because it's always been a job with low wages and low recognition. But it was really exacerbated by the need for expansion, as well as kind of the fallout from the pandemic. The federal government is promising 250,000 spots over the next four years. But early childhood educators that care for these children, many of them have diplomas or degrees. Some make little more than minimum wage. The job is not easy, and many are leaving the profession. In the new funding, most of the federal funding

has actually gone to reduce parent fees, make child care more affordable. There has not been enough attention to the issues that have been pointed to for years that are keeping qualified early childhood educators from not working in the field. The main one being wages and then other things like benefits, then recognition in career ladders and working conditions. So if you put that all together, it's a major complicated issue that needs attention across the country, is how we're going to have the workforce that we need in order to maintain the current system

and expand it with qualified early childhood educators. Ontario is already projecting that it will fall some 8,000 early childhood educators short of its target unless something changes to make the job more appealing. I don't see the future of me continuing in the field. Why not? Just the working hours, the pay. It's really devastating that we are paying below what we are supposed to be paid and for the work that we actually do for the community and the children. Are there any provinces that are doing anything that you think is working to make these roles more enticing? I think that different provinces

are doing different pieces of it. The question of a wage grid or wage scale, which is kind of an organized way that a province has a structured way of identifying how much people are going to get paid with different criteria, no matter where they're working. They've had that in Quebec and in Prince Edward Island for some years, and it actually makes a difference for the staff because they know where they fit in. And it also makes a difference to predict how much it's going to cost. And other provinces have introduced wage grids or wage scales, a couple of them have, and others are working on it. So that's one thing. And then I could point to things like benefits. Nova Scotia recently announced a quite a, I think people think quite a good pension plan.

And I know that that kind of thing is on the table and, you know, in the agenda in different provinces. I know that Manitoba has for some years had a pension plan for early childhood educators working in licensed centers. All of these things together really need to be tackled kind of as a whole because in a strategy, you know you know kind of way like what are all the pieces so so so better wages and then this this also this wage grid so it's clear you know how people are advancing through it making sure that people are compensated for you know the experience and education they have and then also things like like benefits uh and a pension plan these these this you're talking about this kind of thing that's here and there in piecemeal form but aggregating them all and making sure that that they're they exist in all provinces is kind of the key to making this a more viable long-term career, right?

Yes, because this is a really good example of just picking at one bit of it probably doesn't do the trick. In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization. Empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years. I've talked to millions of people, and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income?

That's not a typo. 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Couples. So I want to talk about some of the criticism of this. So there are folks saying that the issues that we're seeing right now, the stuff we've been talking about, basically points to the fact that this program is destined to fail and that it's driving daycare providers into the ground. So I want to touch on that for a second. So in Alberta right now, there's a group called the Association of Alberta Child Care Entrepreneurs, and it was formed to protest.

So it was formed to protest you know so it was formed to protest the $10 a day program and this week it's been organizing these rolling closures of daycares you know in protest of the federal program in fact more than a dozen closed on on Tuesday this week. Outside of Lethbridge City Hall some daycare operators and their supporters are making their voices heard. The protest is against the federal government's $10 a day daycare program. We do believe that there's no sustainability in this program right now, and we're urging the government to renegotiate. So this group says that the federal program, and I'll quote here,

risks destroying their businesses and compromises child care quality and choice. And then going back a ways, the Fraser Institute also published an op-ed last year that said, and I'll quote again, from coast to coast, the childcare sector is suffering crisis and widespread shortage, the entirely foreseeable result of a massive expansion of government control. So I guess my question after that lengthy preamble is, do you think there's a point to that? Do you think these folks have a point? that lengthy preamble is, do you think there's a point to that? Do you think these folks have a point? I think it's really opportunistic. And if you look to see who's producing those things and who's doing the walking out, they didn't support it in the first place. And so there are different

ways that people think about childcare. And I would say that the private operators, not only in Alberta, but in other places, were not happy that the federal government's kind of broad stroke condition was expansion will be primarily public and non-profit. I think it's really important to remember, if you recall, that there were a big flurry when the agreements were signed about who's going to sign on to it. Well, we're not going to sign on to it. It's going to ruin our business and it's going to put too much red tape on us. At the end, most of them did sign on, whether it was a process of signing on. But if you read what some of that says, first of all, some of it's just not true. Actually, public funding is necessary to have child care be affordable for parents.

It's necessary if you're going to pay early childhood educators enough money. And if you have significant public funding, so Canada is finally now stepping up to what many of the European Union countries have had for some years. It requires more policy, more public management and accountability for the public money. So some of the objections are to accountability measures, things like, you know, I mean, like, if you really read the things, some of it is about freedom and choice and businesses and things like that. And I mean, I don't know how to respond to those kinds of things that are being written. I read them all the time.

They're very opportunistic. You see, we told you, so well, if you look at any country that has a good child care system, there are growing pains in bringing it along. There are places where it changes direction when a government changes or something like that. But by and large, it takes money and good policy and public funding for publicly managed child care is the norm in the world where you have good child care. And I would

challenge anybody to rebut that. And I think if you look at some of the statements and the thing that you were citing that it talked about the federal government is seizing control of childcare and all kinds of things. That is not true. You know, it's not true. They know it's not true. So I guess that's what I want to say. There's nothing that shows that quality is better if childcare is not publicly funded. And there's nothing that shows that it's better quality if it's a business, by the way, And there's nothing that shows that it's better quality if it's a business, by the way, to the contrary. I want to quote a tweet from Danielle Smith, Alberta Premier. She said, and I'm quoting, child care is a responsibility of the provincial government. And if the federal government doesn't meet us at the table, we'll ensure Albertans can continue to access an affordable and sustainable child care system our way.

affordable and sustainable child care system our way. So my question in response to that is, do you have fears that if there's enough pushback against these growing pains that the system's experiencing right now, that it might end up failing, that the provinces might pull out of the deal? Well, I would be really surprised because, in fact, parents are benefiting from lower fees across the country. So this is an important first step that there are these parents and it needs a lot more work. I would be really surprised because let's be clear, there was a lot of pressure on the provinces before the federal government came in, before the pandemic, because the way childcare was being done didn't meet the needs of families for sure, or the economy or the workforce

that's what this was all about when the pandemic came and it collapsed because it was all supported by parent fees that was the thing that pushed it as a national issue and why all of the provinces including Alberta and Ontario all of them sign on to it. It's a pressure on the provinces, and it has an impact on their economies. So if their women are not working, if they leave the workforce and all those kinds of things, it has an impact on the provincial governments. So I would be surprised if they pulled out of it. I really do think that there are problems in it that need to be fixed, but there's a minority who are saying, oh, that shows that it doesn't work, so let's get out of it.

That's pretty small. Okay, so we spent a lot of time talking about the headaches, the growing pains, whatever you want to call them, but I just kind of want to take a step back before we wrap up here. This program is obviously a game changer for a lot of folks, Um, and, and clearly it's important to you, you've been advocating for universal childcare for decades. So I guess I just want to kind of end by asking how you're feeling about this at this stage. Are you hopeful? Well, I'm, first of all, I think it's, it's, yes, I'm very hopeful. It's what we asked for for years. Um, it, it's not a surprise. I mean, it is not a surprise that it didn't happen instantaneously. I always thought that there would be pushback. In fact, I thought there would be

more pushback. As a matter of fact, there are, you know, there's a minority of people now who say we shouldn't have childcare, children shouldn't be in childcare. I think that something has really changed there. The question really is, is how do we we how are we going to get that? And let's really be clear, what we had before wasn't working in Alberta or Ontario or in, you know, Newfoundland or wherever. So am I hopeful? I think we have a lot of the pieces and we have something to work on. We're going in the right direction. I think that some provinces will be more successful than others because it takes both the federal government and the provinces to make this work. All right, Martha, thanks so much for talking about this with me.

I really appreciate it. Oh, it was lovely talking to you, and thank you for having me. All right, that's it for today. I'm Damon Fairless. Thanks for listening to FrontBurner. I'll talk to you tomorrow. For more CBC Podcasts, go to cbc.ca slash podcasts.