Question Period Note: EARLY LEARNING AND CHILD CARE INVESTMENT IN INFRASTRUCTURE

What investments is the federal government making in terms of early learning and child care infrastructure?

• In response to concerns from provinces and territories regarding rising capital costs, Budget 2022 provided $625 million over four years to establish an Early Learning and Child Care Infrastructure Fund.

• The Government of Canada also announced in Budget 2024 the Child Care Expansion Loan Program which will provide up to $1 billion in low-cost loans and $60 million in non-repayable grants to support public and not-for-profit child care providers in constructing new facilities and spaces as well as renovating their existing child care centres.

The Government of Canada is making 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.

To support the implementation of the Canada-wide early learning and child care system, Budget 2022 proposed 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. This funding enables provinces and territories to make further investments in child care infrastructure that supports greater inclusion in the Canada-wide ELCC system for underserved communities, such as: those in rural and remote regions, high cost/low-income urban neighbourhoods and communities with barriers to access, such as racialized, Indigenous, official language minority communities, and children, parents, and employees with disabilities. The Fund could also be used to support physical infrastructure for ELCC operators providing care during non-standard hours.

Only not-for-profit and public ELCC providers are eligible for funding provided to provinces and territories under the ELCC Infrastructure Fund. Not-for-profit and public early learning and child care providers often face unique challenges to access the capital funding necessary to build and/or maintain appropriate facilities, especially inclusive spaces that support families in underserved communities.

The cost of infrastructure development in the North is considerably higher than in the rest of Canada due to the high cost of supplies, a shorter construction season, skilled workforce shortages, and a lack of municipal infrastructure, among other challenges. In recognition of the unique infrastructure challenges faced by the territories, the ELCC Infrastructure Fund will ensure equitable funding for all provinces and territories, while also taking into consideration the unique infrastructure-related challenges faced by Northern communities.

The federal government has signed three-year Infrastructure Funding Agreements with all PTs. Funding to PTs will be provided following the approval of bilateral Action Plans. Details on funding allocations have been communicated to provinces and territories. The amendments provide provinces and territories with additional funding to make further investments in child care infrastructure that support greater inclusion in the Canada-wide ELCC system for underserved communities.

Budget 2022 proposed to proceed with an asymmetrical agreement with the province of Quebec that will allow for Quebec to further enhance its child care system. Budget 2021 also provided early learning and child care infrastructure investments to support Indigenous communities.

Infrastructure Fund Funding Profile
Fiscal Year 2023-2024 2024-2025 2025-2026 2026-2027 Total
Amount ($) $75 million $150 million $200 million $200 million $625 million

Budget 2021 provided investments to support infrastructure for Indigenous communities, including:
o $264 million over four years, starting in 2022–2023, and $24 million ongoing, to repair and renovate existing Indigenous early learning and child care centres, ensuring a safe and healthy environment for children and staff.
o $420 million over three years, starting in 2023–2024, and $21 million ongoing, to build and maintain new centres in additional communities.

Budget 2024

The 2024 federal budget committed to establishing the Child Care Expansion Loan Program (CCELP), which will provide $1 billion in low-cost loans and $60 million in non-repayable contributions to help public and not-for-profit (NFP) child care operators build more child care spaces. Budget 2024 also committed to reallocating up to $41.5 million over five years, from within Employment and Social Development Canada, to establish a new capacity building program to help child care providers apply for funding through the CCELP and to support ELCC research initiatives.

The loan program will be delivered by the Canada Mortgage and Housing Corporation (CMHC) and will leverage their expertise on loan program design, management, and delivery. Officials from ESDC, Housing, Communities, and Infrastructure Canada (HICC) and CMHC are working together to determine parameters for the loan program that will support rapid ELCC expansion and increase the number of spaces available to under-served communities, including rural, remote and Northern communities, and equity-deserving communities.

If pressed on distribution of the Infrastructure Fund

• The Infrastructure Fund exclusively supports not-for-profit and public, regulated early learning and child care providers in recognition of the specific challenges they face in financing capital costs.

• Provincial and territorial investments made under the fund will support underserved communities to advance inclusion in the Canada-wide early learning and child care system

• As of April 2024, all provincial and territorial jurisdictions had signed three-year Infrastructure Funding Agreements. Funding is being provided to provinces and territories following the approval of Infrastructure Action Plans.

If pressed on how many new spaces will be created through the ELCC Infrastructure Fund

• The Government of Canada has committed to work with provinces and territories to create 250,000 new regulated child care spaces across the country by March 2026. The ELCC Infrastructure Fund will support greater inclusivity within the existing Canada-wide ELCC space creation target.

If pressed on the Child Care Expansion Loan Program and support for not-for-profit

• As announced in Budget 2024, the Child Care Expansion Loan Program will provide up to $1 billion in low-cost loans and $60 million in non-repayable grants to support public and not-for-profit child care providers in constructing new facilities and spaces as well as renovating their existing child care centres.

• The Government of Canada will continue to work with provinces and territories to support the growth of quality child care spaces across the country, while ensuring that families in existing licensed spaces – including for-profit spaces – benefit from more affordable child care.