Question Period Note: FOR-PROFIT OPERATORS WITHIN THE CANADA-WIDE EARLY LEARNING AND CHILD CARE SYSTEM

Will there be an expansion of the for-profit sector within the Canada-wide Early Learning and Child Care system?

• The federal government is working with the provinces and territories to support the growth of quality child care spaces across the country, while ensuring that families in all existing licensed spaces benefit from more affordable child care.

• Through the Canada-wide agreements, the Government of Canada has secured commitments from the provinces and territories to create over 250,000 new child care spaces over five years.

• New licensed spaces will be created predominantly among not-for-profit, public, and family-based child care providers.

If pressed on Budget 2022 announcement

• Budget 2022 proposes to provide $625 million over four years, beginning in 2023-24, for an Early Learning and Child Care Infrastructure Fund.

• This funding will enable provinces and territories to make additional child care investments, including the building of new facilities.

If pressed on Ontario’s cost control framework

• Ontario committed to implementing a cost control framework that will be in place for all providers who opt-in to the Canada-wide ELCC system.

• This approach is to ensure the sound and reasonable use of public funds, ensuring that costs and earnings of child care licensees that opt-in to the Canada-wide ELCC system are reasonable and that surplus earnings are directed towards improving child care services.

• Elements of the cost control framework include an immediate freeze on parent fees, enrolment rules, workforce compensation, and a new funding and accountability framework.

• Child care licensees who wish to participate in the Canada-wide ELCC system have until September 1, 2022 to notify their service system manager of their intention to participate.

The Government of Canada made a transformative investment of over $27 billion over five years, as part of Budget 2021 to build a Canada-wide early learning and Child Care system with provinces and territories. Combined with other investments including in Indigenous Early Learning and Child Care, up to $30 billion over five years will be provided in support of early learning and child care. Adding previous investments announced since 2015, this means that as of 2025-2026, a minimum of $9.2 billion will be provided every year – permanently – for Early Learning and Child Care and Indigenous Early Learning and Child Care.

The goal is to bring fees for regulated child care down to $10 per day on average within the next five years. By the end of 2022, the Government is aiming to reduce average fees for regulated early learning and child care by 50 per cent to make it more affordable for families. These targets would apply everywhere outside of Quebec, where prices are already affordable through its well-established system.

In total, the Government of Canada is aiming to create approximately 250,000 new child care spaces through Canada-wide agreements with provinces and territories, and already achieved its goal of creating 40,000 more affordable child care spaces before 2020 through the 2017-18 and 2019-20 Early Learning and Child Care Agreements. These new licensed spaces will be predominantly among not-for-profit, public, and family-based child care providers.
The Government of Canada has signed agreements with every province and territory to deliver on its promise to build a Canada-wide affordable, inclusive, and high-quality early learning and child care system.

To support the implementation of the Canada-wide early learning and child care system, Budget 2022 proposes to provide $625 million over four years, beginning in 2023-24, to Employment and Social Development Canada for an Early Learning and Child Care Infrastructure Fund.

Funding Profile
Fiscal Year 2023-2024 2024-2025 2025-2026 2026-2027 Total
$75 million $150 million $200 million $200 million $625 million

Provincial and territorial child care systems offer a range of options for families with differing needs, with some provincial and territorial models relying more heavily on for-profit child care providers. These systems are reflected in the respective Canada-wide agreements with provinces and territories in the following ways:
• In Alberta, about 44% of spaces are considered non-profit (includes family based and public providers) and 56% of spaces are privately operated. The Canada-Alberta Implementation Committee will develop and propose a for-profit expansion plan for the development of new child care spaces in for-profit licensed child care providers, for agreement by Alberta and Canada. A cost control framework will also be developed to ensure the sound and reasonable use of public funds.

• In 2019, the ratio of not-for-profit to for-profit child care providers in Nova Scotia was 50%/50%. Under the Canada-Nova Scotia Canada-wide ELCC Agreement, Nova Scotia committed to implementing a fully-not-for-profit early learning and child care system which will be publically-managed by a new provincial entity. Nova Scotia committed to transition gradually towards a not-for-profit system with options available for for-profit providers. The week of January 10, 2022, further to an October Expression of Interest process which invited for-profit providers to join the Canada-wide system, Nova Scotia released significant details of its plan and presented existing for-profit providers with three options:
o Join the Canada-wide system but remain a for-profit provider (no growth permitted; eligible for funding);
o Transition to become a not-for-profit provider (growth permitted; eligible for funding);
o Opt out of the new system and continue as a private, licensed facility (no growth permitted; not eligible for funding).

• The ratio of not-for-profit to for-profit child care providers in Ontario is 70%/30%.Through the Canada-Ontario Canada-wide ELCC Agreement, Ontario commited that federal funding will be used to predominantly support the creation of not-for-profit child care spaces. Ontario is implementing a cost control framework for all providers who opt-in to the Canada-wide ELCC system. This approach is to ensure the sound and reasonable use of public funds, ensuring that costs and earnings of child care licensees that opt-in to the Canada-wide ELCC system are reasonable and that surplus earnings beyond reasonable earnings are directed towards improving child care services.

• In New Brunswick, the ratio of not-for-profit to for-profit child care providers is 32%/68%.Under the Canada-New Brunswick Canada-wide ELCC Agreement, New Brunswick committed to creating predominantly not-for-profit child care spaces. All new child care spaces will be part of the province’s designation system, which ensures high quality standards and includes a market fee threshold to control fees charged to parents.
New Brunswick also committed to:
o Look at ways to support the voluntary transition of for-profit facilities into the not-for-profit model; and
o Conduct a research study in 2022-2023 to identify barriers and potential strategies to foster greater not-for-profit participation in the publicly managed system.

• In 2019, the ratio of not-for-profit to for-profit child care providers in Prince Edward Island was 35%/65%. Under the Canada-Prince Edward Island Canada-wide ELCC Agreement, Prince Edward Island committed that federal funding would be used predominantly to support not-for-profit, public ELCC providers/operations. Prince Edward Island is committed to enhancing its publicly-managed system and to prioritizing not-for-profit care. The province will be undertaking a research study to examine the current system and potential growth of spaces while identifying barriers and possible strategies to engage public and not-for-profit participation within its publicly managed system

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