EXCLUSIVE: Canada’s $10-a-Day Daycare Faces Audit Following Complaints

Auditor General Karen Hogan appears as a witness at a meeting of the House of Commons Standing Committee on Public Accounts on Parliament Hill in Ottawa on Feb. 12, 2024. The Canadian Press/Sean Kilpatrick

Canada’s auditor general has announced plans to evaluate the effectiveness of the federal child care program, as providers continue to voice concerns about the program’s impact on the sector and ability to meet its stated goals.

The Office of the Auditor General is in the process of launching an audit of the Canada-Wide Early Learning and Child Care Plan (CWELCC) and is considering involving provincial auditors general in the investigation, said Auditor General Karen Hogan.

Ms. Hogan made the remarks in a July 18 letter reviewed by The Epoch Times and sent to the Association of Day Care Operators of Ontario (ADCO), the industry association for the province’s daycare providers.

The association had asked for a review of the federal program to assess whether it is sustainable for taxpayers, provincial governments, and child care licensees.

“To date, [the federal daycare program] hasn’t delivered on [its] promise,” ADCO executive director Andrea Hannen wrote in a May 22 letter to Ms. Hogan.

“The program may in fact be having such a detrimental impact on Canada’s licensed child care sector that many families who rely on the program are at risk of losing access not just to their $10-per-day spaces, but to any licensed spaces at all.”

Ms. Hannen’s request was co-signed by other national and provincial child care operators, including the Canadian Council of Montessori Administrators, the Alberta Association of Childcare Entrepreneurs, and the Ontario Federation of Independent Schools.

The federal daycare program was first laid out in Budget 2021, when the government proposed spending up to $27.2 billion over five years to create 250,000 daycare spaces and to lower rates to an average of $10 a day by the 2025-26 fiscal year. The goal of the policy is to make child care more accessible, especially for low-income families, and to allow more women to enter the workforce.

According to government estimates, the program has created up to 40,000 child care spots as of April 2024, and has achieved its $10-a-day fee reduction target in more than half of all provinces. The federal government also says that in British Columbia, Alberta, Ontario, New Brunswick, and Nova Scotia, child care fees have been reduced by at least 50 percent.

“With Budget 2024, we’re creating more child care spaces, hiring more early childhood educators, giving them more training, and working with provinces like Ontario to make sure families get the care they deserve,” Prime Minister Justin Trudeau said in a statement in May. “Affordable, quality child care—that’s what fairness looks like.”

But the program has met with criticism, especially from child care providers, who say government funding is not sufficient to cover the cost of operations. YMCA Ontario, which provides nearly one-fifth of the province’s child care spots, said funding shortfalls can result in programs closing at a time when they should be expanding.

“Unfortunately, while cost savings are being offered to families, the cost burden on operators like the YMCA has grown,” wrote the YMCA in a 2024 pre-budget submission to the Ontario government.

“This is because the current approach to revenue replacement funding is insufficient, leaving many non-profit operators with deficits and uncertain outlooks as we negotiate with each municipality for pressure funding.”

The provinces have a role as well in how the funding is administered, and Ms. Hogan is looking to work with them on the audit.

“Since the provinces have an important role in implementing this program, we are assessing the feasibility of doing a collaborative audit with some of our provincial Auditor General colleagues,” she said in her letter.

While some child care providers have struggled under the program, Ms. Hannen says some have also thrived.

“It’s very individual,” she told The Epoch Times in a March interview. It depends on operating costs, which can vary depending on region and unique services offered by each provider. It also depends on how much providers were charging before CWELCC began limiting fee increases in March 2022.

While funding problems under CWELCC have caused difficulties for some providers, Ms. Hannen said, the child care industry has been facing other problems for a while. For example, labour shortages have increased in recent years.

The workforce crisis has resulted in child care programs being forced to close, limit enrolment, or change hours of operation due to difficulty in retaining and recruiting staff, according to a 2022 joint letter to the Ontario Ministry of Education from the Association of Early Childhood Educators Ontario and the Ontario Coalition for Better Child Care.

Ms. Hannen asked the auditor general to find out whether licensed spaces have increased or shrunk because of the federal program, and if the government has plans to address staffing shortages that have prevented centres from running at full capacity.

This article has been updated to include information about the provinces’ role in CWELCC and some additional information about the program.