Many parents, economists and childcare advocates celebrated Ontario’s signing of the Early Learning and Childcare Agreement with the federal government at the end of March.
The agreement means a significant infusion of federal government funding to cut childcare fees by 25 percent immediately, and then cut even further to 50 percent at the end of 2022. The final reduction to an average of $10 a day should occur by 2026.
As researchers with knowledge of public policy and its effectiveness, as well as applied psychology, human development and early childhood, we believe that universal access to early learning and childcare should mean equal treatment for every child, in which every child receives the necessary support. need. But this does not apply to the Ontario agreement.
Something that deserves close attention and correction is how Ontario’s new agreement on early learning and childcare is creating disparities for children in the most economically disadvantaged families.
Problems with the agreement
Just days after the signing of the Ontario agreement, significant cracks began to appear. Researchers and childcare advocates have raised concerns about provisions in the agreement that allow for a proportionate expansion of the commercial sector and a lack of commitment to a living wage and benefits for childcare workers.
Read more: Children across Canada deserve professional early childhood workers
The proposed 86,000-bed expansion over 2019 licensed capacity is overwhelmingly below projected demand, which will be driven by lower childcare fees.
Expert analysis indicates that up to 200,000 additional licensed childcare spaces may be needed as a result of the demand generated by the halving of parental childcare fees. By 2026, when the full fee reduction is due to be implemented, an additional 100,000 seats may be needed.
Each unique early learning and childcare agreement that Canada has signed nationwide leaves it up to the provinces or territories to determine how the $10 average fee will be achieved.
In Ontario, the agreement provides that a $10 provincial average fee will be created by combining a $12 flat fee combined with lower fees paid by families receiving childcare subsidies. These subsidies are subject to availability and are not guaranteed to every household that meets established social need criteria. Criteria include having a job, attending school, or having a certified child or parent with special needs.
These conditions are reminiscent of Victorian-era attitudes that obscure the political and systemic roots of poverty and limit government assistance to the “deserving” poor—those who are considered to be working, “productive,” or working to improve their economic situation.
In Ontario, the financial aid amount is the difference between the full fee and the family’s own contribution, as determined by an income test established by provincial law. The benefit is calculated by excluding household net taxable income of less than $20,000, deducting 10 percent of income from $20,000 to $40,000, and increasing to 30 percent for income over $40,000.
If the parent’s caregiver agrees to participate in the new Ontario Early Childhood Education and Care Agreement, the 25 percent fee paid by parents after April 1, 2022 will be retroactively refunded. The new rate will apply going forward. Providers have until September 1st to register.
For fully-employed families, whether paying full fee or receiving a subsidy, child care costs can be further reduced by applying for the Child Care Expenses Deduction and the Ontario Child Care Tax Credit and Affordable Exemption .
Access is not universal
Thus, the Ontario agreement creates universal paid childcare for middle and high income families. With limited funding available, Ontario maintains subsidized childcare for a subset of eligible parents for low-income people under strict conditions.
Families with higher incomes do not have eligibility requirements or a maximum income cap to take advantage of the reduced child care fee.
But for those low-income families that qualify for the subsidy, access will unfortunately become more difficult: Under Ontario’s April 2022 provincial funding guidelines, transfers to municipalities to fund subsidies are being cut by 25%. They also specifically prohibit the use of new early childhood care agreement funding to increase subsidies, despite long waiting lists in many areas of Ontario.
Many low-income families will not be eligible
Decades of research shows that the most disadvantaged children can benefit the most from access to high quality licensed child care.
The very tool that can improve life chances and reduce the intergenerational transmission of poverty is systematically less accessible to many of the most disadvantaged children due to the Ontario government’s exclusion policy.
There is strong international and Canadian evidence that affluent families living in affluent communities have better access to better child care programs. Without attention to equal access, the universalization of access to childcare leads to an overrepresentation of children from relatively more affluent families. This can be seen in the experience of Quebec in introducing what was launched more than 20 years ago as $5 a day childcare, as well as in the experience of several member states of the European Union.
Universal access should mean treating every child equally, where every child gets the support they need.
In Ontario, the obvious next steps are to eliminate restrictive eligibility criteria for the subsidy system.
Ontario needs to introduce guaranteed access to full early learning and childcare for low-income families. Right now, the $12 flat fee is to be replaced by an income-tested fee that reflects family income. The income verification mechanism should be flexible enough to comply with the terms of the new agreement.
Reducing inequalities must be at the forefront of the implementation of the new early childhood education and care agreement. If this is not addressed, this policy direction will have implications for the life chances of disadvantaged populations, possibly for future generations.