Toronto daycare says it's at risk of closing due to Ontario funding model of national child-care program

A daycare in Toronto’s west end says financial pressure from Ontario’s funding model of the national $10-a-day child-care program has left it with two options: close or drop out of the program.

“Both are terrible options,” Niiti Simmonds, a member of Sunnyside Garden Daycare’s board of directors and mother of two children at the facility, said at a Friday morning news conference.

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“Since we joined the $10-a-day program, the funding that we get as a [child-care] centre from the city by the province is simply not enough to sustain us and is now putting our operations at risk after 40 years of operating successfully as a not-for-profit,” she said.

Simmonds, who was joined by Parkdale-High Park MPP Bhutila Karpoche and a representative of the Ontario Coalition for Better Child Care, as well as other parents of children at the centre, said Sunnyside is facing a “critical and urgent” financial crisis as a result of the program, which cut the fees parents pay for child care in Ontario in half back in 2022.

Since then, Ontario has been replacing the revenues lost by participating centres, with a 2.1 per cent increase in 2024 and a 2.75 per cent increase in 2023, via federal funds allotted to provinces and territories when they signed up for the program.

Earlier this month, Ontario told child-care centres that it would introduce a new way of funding the program in 2025, but a ministry source says an announcement could come before then. The province has also earmarked more than $98 million for "emerging issues" for child-care operators who are unable to cover non-discretionary costs, like rent increases.

But Sunnyside, which cares for some 150 children, says the current funding model isn’t enough and that it needs an injection of cash from the city and province before the reserve funds they have been operating on run out.

“We have done what we can to reduce costs and yet at the end of the day, even with those very proactive measures we are running into a situation where we are completely insolvent by the end of the year,” Simmonds said.

Niiti Simmonds, a member of Sunnyside Garden Daycare’s board of directors and mother of two children at the facility, speaks at a news conference on May 24, 2024.

Karpoche said the province should unveil the new funding model now so that child-care centres, like Sunnyside and many others, can know what they’re working with before the full implementation of the program in the next two years.

“It is critical that the new funding formula delivers sustainable funding to support the child-care system,” she said.

In a statement to CTV News Toronto, a spokesperson for Education Minister Stephen Lecce said it will keep cutting fees for parents, but added that the federal government needs to “step up” with funding or the program will “fail across the country.”

“This is yet another example of operators small and large pleading with the federal government to actually deliver the funding necessary to operate. While we have cut child care fees by 50 per cent, we know the federal program is creating difficulty for families and operators alike, which is why we will continue to advocate to the federal government for action," a statement read in part.

For Ottawa’s part, a spokesperson for the Ministry of Families, Children and Social Development said the government shares the concerns of Sunnyside, and other daycares impacted by the province’s “failure to recognize and prioritize the urgency of adjusting their funding formula.”

“Claiming more money is needed from the federal government is just a diversion. Ontario will receive over $2B this year, and this year alone they got a 17% increase in annual funding. Yet, they only passed on 2% of that increase to the operators,” Geneviève Lemaire, press secretary to Minister Jenna Sudds, said in an email.

"More money won't fix a broken funding formula—Ontario needs to step up, support child care operators properly, and ensure certainty for families and educators," she wrote.

Meanwhile, a spokesperson for the City of Toronto said it provides funding to eligible child-care operators "in accordance with Provincial and City guidelines."

"If an operator identifies a financial concern, City staff will work closely with them to determine if the agency is eligible and if additional funding is available," the statement read.  

With files from The Canadian Press