Parents across GTA warned by some private daycares that they may pull out of $10-a-day program

Children's backpacks and shoes are seen at a daycare franchise, in Langley, B.C., on May 29, 2018. THE CANADIAN PRESS/Darryl Dyck

Parents at some private, for-profit daycares across the GTA are being warned that their fees could soon be doubling as operators consider pulling out of the national $10-a-day child-care program.

Andrew Bartucci told CP24.com this week that he was shocked and devastated to receive a letter from his son’s Bloor West Village daycare informing him that they are considering opting out of the Canada-wide Early Learning and Child Care (CWELCC) program, the national $10-a-day program that has reduced parent fees by more than 50 per cent since it was implemented in 2022.

“The lists are so long and we finally found a daycare and we thought that the daycare was part of this program, the CWELCC program, which in itself was difficult to find,” he said.

“We were quite content with everything and how things are going and we were told that if anything, the fees would be going down as the program was rolled out.”

But in a letter from his daycare Teddy Bear Academy, which was shared with CP24, parents were told that due to “CWELCC’s most recent changes,” participation in the program is now in jeopardy and the operators warned that starting as early as January 2025, fees could increase “significantly.”

CP24.com has reached out to Teddy Bear Academy for comment about the letter but has not heard back.

“This information is being shared with you in advance and as a precaution, in the event alternative childcare arrangements may need to be explored in the coming months,” the letter read.

“We share your frustration with this uncertainty and thank you for your understanding and continued support.”

‘There is a big impact’

Currently, Bartucci said he and his wife pay about $1,000 a month for a spot for his 2.5-year-old son at the daycare.

He said with another child about to start daycare in a few months, their monthly daycare cost for both kids could skyrocket to more than $4,000 a month if the daycare drops out of the program.

“At that point, it’s not worth it for one of my wife or I to work. What message is that sending for my wife? Because she would probably be the one to stay home with the kids and she’s worked really hard to advance in her career,” he said.

“She has to put her career on hold.”

Bartucci said after speaking with other parents around the GTA, he learned that many others had received similar letters from their respective daycares.

“We’re all scratching our heads. We don’t know what’s going on,” he said.

“There’s not a lot of information that’s being shared, however, there’s a big impact to us and to all these families.”

A similar letter was sent out to parents with children at Oakville’s Little Kids Daycare Center.

In the letter, they are told that the current structure of CWELCC has made it difficult to “remain financially sustainable.”

The letter noted that the daycare may also need to opt out of CWELCC in the coming months.

“In its current form, the CWELCC program’s cost control framework places significant restrictions on how we can allocate funds, which limits our ability to invest in our center in ways that benefit the children, families, and staff,” the letter read.

“Additionally, the increasing level of control the government will have over our operations, including how we spend money, is making it more difficult for us to make improvements and decisions that ensure our daycare remains a vibrant, thriving, ‘home away from home’ environment for everyone.”

The letter went on to note that “no final decision” had been made.

“If we decide to opt out, we will be sure to give you ample notice and provide clear information about how this change may affect your fees and the services we provide,” it read.

“We understand the importance of transparency, and we welcome any questions or concerns you may have as we navigate this decision.”

In an email to CP24.com, Debbie Cunha, the CEO and owner of Little Kids Daycare Center, said the letter outlines the “many reasons why” they may have to pull out of CWELCC.

“There are many factors that are going to put my business and many other childcare centers at risk of closure,” she wrote.

Heather Kay, said that her two children attend Little Footsteps Daycare in the city’s west end and they too received a letter recently, warning that the centre may need to withdraw from CWELCC.

“My reaction to this was not really one of surprise. I think from the get-go when daycares were first enrolling in this program, there were a lot of questions for them. They felt the government had not really effectively communicated what the details of the program would be,” she told CTV News Toronto.

“To me there was always a potential risk that they would come back and tell us how the program was operating and it wasn’t suiting there needs.”

She said that she, and other parents, are struggling to reconcile conflicting narratives that have been put out by the daycare operator and the provincial government.

In August, the province announced a new funding structure that will come into effect on Jan. 1, 2025. Then-education minister Todd Smith said the changes would give operators more “flexibility” with how to allocate spending. The province also announced that it would be capping parent fees at $22 a day across Ontario starting in January.

“There is a disconnect here,” she said.

“As a parent, it is hard to sort of get to the bottom of what’s happening and the government is clearly telling a different story than the daycare operators.”

Non-profits generally positive about changes

Carolyn Ferns, the policy coordinator for the Ontario Coalition for Better Child Care, said the province will be moving away from a revenue replacement model and implementing a cost-based funding formula starting in January.

She said many in the sector believe that switching to a cost-based funding formula will be much better for daycare operators.

In recent months, she said she has spoken about the changes with a number of non-profit operators, which make up more than 70 per cent of child care spaces in Ontario as the number of for-profit spaces has been capped at 30 per cent.

“Their reaction to this funding formula is very different,” Ferns said of non-profit operators, adding that they have been generally positive about the changes.

She said the funding formula provides “benchmark funding” that is based on the average cost in your region and then if the daycare’s costs are higher, a legacy top-up in offered to cover additional costs.

“Then on top of that, there’s also funding in lieu of profit or surplus,” Ferns said. “Those are things that I think most people would think are reasonable.”

‘It’s a complete takeover'

But Jacky Sheppard, a spokesperson for the Private Operators Group, which represents more than 950 private daycare operators in the province, said private, for-profit centres are asking the province to pause the implementation of the new funding formula.

“We were told that in January coming up… we will be switched to a cost-based program. Now that changes everything because now we’re not focusing on our quality and being able to make our own decisions. We’re now being controlled completely on what we spend and how we spend it,” she said in an interview with CP24.com.

“We’re having to make the kind of changes that no industry would take. It’s a complete takeover. It takes away all of our authority, it takes away all of this decision-making, and it really puts us into working for the government, which is not fair.”

The province also previously informed licensed operators in a memo that starting in 2025, centres not participating in CWELCC will lose out on regular funding that they previously received, including general operating, fee subsidy or wage enhancement grants.

The memo went on to note that families who currently receive fee subsidies will continue to receive them until their child leaves the provider or ages out.

Sheppard said while some operators will likely wait it out and see how the new funding formula impacts their business, others may pull out of the program and raise parent fees.

She noted that different regions have different deadlines for pulling out of CWELCC. In Toronto, she said, daycare operators need to notify the municipality by the end of October.

Sheppard added that a number of groups, including POG, the Ontario Association of Independent Childcare Centres, as well as the Association of Alberta Childcare Entrepreneurs (AACE), have been advocating for changes to the way the CWELCC program is being rolled out in the province and across the country.

“What we would like to have happen is this. We are simply asking for a pause, for a stop in the proceedings for January,” Sheppard said.

“Let’s stop. Keep doing what we’re doing now, the revenue-based, and let’s come back to the table and talk about how we can move forward.”

Province says Ottawa must provide more cash, flexibility

In an email to CP24.com, Ontario Education Minister Jill Dunlop said the province has “fought long and hard” to ensure parents get “the best deal” in relation to the national child-care program.

“As a mother of three, I understand what parents are going through,” she wrote.

“While we were able to secure a six-year $13.2-billion commitment from Ottawa, Ontario continues to deliver significantly more money, at $33.4 billion in child-care and early years education.”

She said she has spoke with daycare providers across Ontario about the issue, as well as parents and her federal counterpart, Jenna Sudds, the minister of families, children and social development.

“What is clear to me is that Ottawa must provide more funding, lift the cap on for-profit providers, and give more flexibility so that providers can cover their costs and create necessary spaces for parents,” Dunlop said.

Sudds responded that the provincial government signed an agreement and now has “a responsibility to families” to work with the federal government to make $10-a-day child care a reality by 2026.

In an email to CTV News this week, the minister accused the province of “dragging their feet” on releasing a new funding formula and further suggested that they are doing it again with respect to creating more child care spots.

“My focus is to hold Ontario accountable and get children off waitlists. Ontario has all the necessary funding they need, they just need to roll up their sleeves and get the job done, parents are counting on it,” she wrote.

“It’s easier to say lift the cap and give us more money instead of putting in the work themselves, but we weren’t elected to do what is easy, but rather what’s right.”

She noted that she recently met with Dunlop and “reiterated” the need for the province to create non-profit spaces.

“Research has consistently shown that non-for-profits provide higher quality child care because every dollar is reinvested directly in the workforce, the children, and the centres themselves,” she said.

“We have seen what happens when we privatize health care—it leads to increased costs, unequal access, and disparity in quality. It wouldn’t be fair to parents or our children to let the same happen with our national child care system.”

While it is clear more communication is needed between government and daycare operators, Kay said, parents need answers.

“Parents need clarity because this is coming as of January 1,” she said.

“You can’t switch your kids to a new daycare on a dime. It is not something that you do very quickly. It is very hard to find alterative types of care and so I think some level of communication and decision needs to happen quickly.”

With files from The Canadian Press