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Some daycares opted in — and quickly out — of $10-a-day program to score clients a rebate

Child-care centre operators had concerns about the program's financial sustainability but got their clients cash in year one
Child-care centres are at risk of closing across Ontario if the province doesn't soon update how it compensates them under the national $10-a-day program, the largest operator is warning. A young boy plays at a daycare, in Langley, B.C., on Tuesday May 29, 2018.

Daycare operator Tami Zuckerman said she knew the $10-a-day child-care program wouldn't have been sustainable for her centre. 

"If I opted in, I would have went bankrupt — I can tell you that because my fees would have been frozen," said Zuckerman, president and founder of The Little Campus, a child-care centre in Etobicoke. 

But she did opt-in when the Canada-wide Early Learning and Child Care (CWELCC) program launched in 2022 — and notified the city that her centre would be opting out for the following year at the same time.

Zuckerman explained that it was a way to get her centre's families a fee cut in the program's first year without having to abide by the program's constraints.

She's not the only child-care operator who took advantage of the fee rebate in 2022 before dropping out. While the province does not track drop-out figures, some municipalities do. Seven centres in Toronto alone that were enrolled in 2022 had dropped out in 2023.

They are among the 12 per cent of eligible child-care programs in Toronto that are not currently enrolled in the CWELCC program, according to statistics the city provided to The Trillium. The percentage of centres not enrolled in the program provincewide is smaller, at nine per cent, a freedom of information (FOI) request shows. 

Zuckerman said there were few details when CWELCC launched.  

"At first we decided to opt out because we were scared, we didn't trust to allow the government to run our centre in the best interest of the children and our staff," she said.

Then she learned that opting in meant families would get back 25 per cent of their fees. 

"We basically wrote a letter saying, we're opting in and ... that we're also opting out for the next year," she said, referring to the fall of 2022 when centres faced a Nov. 1 enrolment deadline. 

"I'm not willing to lower my standards and enrol in a program like this," she added. "This is not about a money grab — it's more about surviving and making sure that I offer the same quality of care."

Zuckerman said she's had to raise fees to keep up with inflation and the rise in costs, such as for catering. Centres that are part of CWELCC have had their fees frozen. She felt the only way to allow her staff to sustain their lives as inflation rose was to give them raises, which would have required her centre to increase fees.

It was a similar situation for Jenna Niven, executive director of Atelier Childcare Inc., which had two sites operating in 2022, but currently only has one due to construction near the second one. 

The way the program was structured made it "sort of a no-brainer" for Niven to do the same thing that Zuckerman did. 

"It was a straight revenue replacement and it was retroactive, so it was like we reported what people paid and received (25 per cent) of that and we were only expected to distribute that once we had received the money," Niven said.

Niven said her centres weren't initially going to join the program, but she was assured by city officials that if they did, they could opt out for 2023.

"We got like a little sales pitch on why we should opt-in," she said. 

In an effort to boost program uptake, the provincial government extended the deadline for centres to enrol to November 2022 and made other changes. Nearly 25 per cent of operators were not enrolled up to two weeks before the deadline, according to a Canadian Press report at the time.

The changes included telling centres they would be given money to cover rebates for families for an initial 25 per cent, increasing to about 50 per cent of their 2022 fees by the end of the year, regardless of what the centres were charging parents. 

But Niven said staying in the program for 2023 meant that operators were required to freeze fees at the 2022 rates, and it was too difficult given rising costs. 

"We wanted to raise our educator salaries ... and our catering went up by eight per cent, for example," she said, adding that instead of using staffing supply agencies, she uses a team of salaried "floats" and gives her staff 10 personal or sick days. 

Ultimately Atelier Kids opted in for 2022 and then almost immediately gave notice that the two centres would be opting out for 2023. 

"Because the rollout and the parameters have been so unclear, I think a lot of people feel forced into it because they feel that their clients would leave if they were to opt-out and go to a centre that had opted in," Niven said, adding that she knows many operators who are currently enrolled in CWELCC but are "very much in a wait-and-see position."

Asked what it would take for her to consider joining CWELCC again, Zuckerman said, "I don't trust the government to put my students' best interests at heart — I really don't."

She would like to see the government send funds directly to families, rather than to centres, and she's concerned about the wide gap between centres that are in the CWELCC and those that aren't.

"I want people to be able to afford my centre, so I would love for CWELCC to put money back into the pocket of parents .... We're really expensive, but make it more affordable so that we can serve all families, not just families that can afford us." 

Zuckerman said her centre, which she created for her daughter in 2021, has "lots of green space" and takes a "whole-child approach."

"We are overstaffed," she said, adding that they typically go over ratio when a new child is transitioning, have a full-time music teacher and have in-house supply staff. "We believe that kids will transition a lot faster and feel a lot more healthy and supported ... if right from the get-go we are the home-away-from-home where we are just taking care of all of their emotional needs." 

Concerns over financial sustainability continue

Donna Spreitzer, executive director for Toronto Community for Better Child Care, said she's not surprised by operators opting out "because the current model as the Ontario government has rolled it out is not sustainable."

But she said while the goal was to save parents money, "it wasn't supposed to be a one-time in and out."

"I never heard that people were going to sign up and immediately opt-out, but I knew that everybody knew that they could do that, keep that in their back pocket," she said.

Spreitzer said many operators had concerns from the start about how funding would work under CWELCC but felt pressure from the city to join the program. 

"Yes, it's advantageous for parents," she said. "It just seemed like it wasn't going to be advantageous for a centre to be in CWELCC."

Though operators like Zuckerman and Niven knew they wouldn't stay in the program, others who are currently enrolled are also weighing whether they can remain.

Michelle Strople, executive director of Children's Circle Daycare in Toronto, said she's been speaking with her board about the "longevity of being able to stay in CWELCC."

"The increases that they have given us just don't match inflation, and because most of the kids who are enrolled in our centre are ... CWELCC-eligible spaces, it leaves us with a constant deficit," she said, noting they could reach a deficit of $500,000 this year. 

Last year, the government added $130 million in funding for child-care centres to cover a cost escalation of 2.75 per cent. The increase for this year is 2.1 per cent, and in addition to the cost escalation funding, the government has also allocated $75 million for "emerging issues," but advocates have said this isn't enough

CWELCC uptake

While uptake was a concern in 2022, the numbers are higher now.  

As of the end of September, 5,364 licensed child care programs, or around 91 per cent of licensed sites, were enrolled in CWELCC, according to an FOI request filed by The Trillium. According to the Ministry of Education, those numbers remained similar as of the end of December. 

The Trillium reached out to a handful of municipalities to ask about drop-out numbers. Some said they had no drop-outs — Durham, Greater Sudbury, Halton and Ottawa, though the latter two each said they had one centre in the program permanently close. 

The City of Hamilton's Children’s and Community Services said 214 child-care licensees out of a total of 226 that are eligible are part of CWELCC, and that just one — Westdale Children's School — had opted in and then dropped out. The centre did not respond to a request for comment before publication. 

Shanley McNamee, general manager of children’s services for the City of Toronto, listed eight programs that had "withdrawn from CWELCC and are still operating," one of which withdrew this year. McNamee also said that as of Feb. 27, there were 943 licensed child-care operators and 24 home child-care centres enrolled in the program, representing 88 per cent of total centres and 96 per cent of home child-care agencies in the city. 

The centres that withdrew from CWELCC include two sites at Vincent Massey Academy, Mindwerx 4 Kids Learning Centre, Ola Day Care, Two Short Storeys, two sites at Atelier Kids and The Little Campus, according to McNamee. 

None of the other centres responded to a request for comment before publication. 

Ola has made headlines in recent months after the centre told families in January that it would be pulling out of CWELCC, that fees would increase starting in March and families would have one month to leave the daycare without financial penalty.

"Unfortunately as predicted from the beginning this is not a program that will work the way the government presented to you, but for the sake of our clients, we decided to try and give you some breaks in fees until it is no longer feasible for us to do so," centre director Ane Spirkoska wrote to families in a Jan. 8 email that was obtained by The Trillium

The email said the toddler and preschool programs would cost new families $1,637.50 and $1,475 per month, respectively, once the centre withdrew from the program. 

"Our centre is growing in debt monthly by a significant amount and I'm afraid if we don't get out of this program and change our rates to match inflation our centre will be at risk of closing indefinitely by spring," Spirkoska said. "Having considered the situation very carefully, Ola has come to the conclusion that we cannot continue to stay opted-in to CWELCC program and still guarantee to continue delivering the quality of service that our parents have come to expect from us and keep our doors open and staff jobs secure."

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