Ontario and Canada have signed a $13.2 billion agreement that will lower fees for families. There will be a reduction of child care fees in four steps to an average of $10 a day per child five years old and younger by September 2025. Parent rebates, retroactive to April 1, will begin in May. The new arrangement between Ontario and Canada will not affect Ontario’s child care tax credit program.
Ontario is the last province to enter such an arrangement with the federal government, and the deal has its own Ontario-specific details. It allows the province the flexibility to allocate federal funding in a way that will allow the province to deliver an average of $10 a day child care, by spending the initial $10.2 billion over four years instead of five. It contains enhanced protection against funding shortfalls through a mandated financial review process in year three –the first of its kind in any provincial child care deal –to reconcile the actual costs of the new national child care plan with funding.
The announcement of the new cooperative deal noted that there is “Protection of all for-profit and non-profit child care spaces, helping to support predominantly female entrepreneurs across the province who provide high-quality child care services.”
This deal will result in the creation of approximately 86,000 new child care spaces for children five years old and younger, and the hiring of new early childhood educators and support improved compensation for all Registered Early Childhood Educators (RECEs) working in licensed child care.
The Province, under the plan, will work with municipalities to enrol 5,000 licensed child care centres and home child care agencies into the program between now and September 1.
“From day one, I said our government wouldn’t sign a deal that didn’t work for Ontario parents and I’m so proud of the work we’ve done with our federal partners to land an agreement that will lower costs for families across the province,” said Premier Doug Ford. “Given how complex Ontario’s child care system is, we wanted to get this right. Today, we’re delivering a deal that will keep money in the pockets of hard-working parents.”
As a first step, all Ontario families with children five years old and younger participating in licensed child care centres will see their fees reduced, up to 25%, to a minimum of $12 per day, retroactive to April 1, 2022. In December, 2022, parents will see another reduction. In total, fees for families will be reduced in 2022, on average, by 50%, relieving parents of $1.1 billion in child care costs. Families will see further fee reductions in September 2024, culminating in a final reduction to an average of $10-a-day child care by September 2025.
“We have secured a deal for Ontario families that will significantly reduce child care costs for working moms and dads, and that starts today”, said Stephen Lecce, Minister of Education. “We were able to deliver a deal for Ontario families that includes billions in additional funding and a longer agreement that respects parents and provides financial support for families.”
In order to guarantee the efficient working of the plan, the Canada-Ontario agreement also ensures that the cost of implementing the agreement will continue to be monitored by Canada and Ontario with automatic review in year three of the agreement (2024-25). This automatic review mechanism is the first of its kind in any child care agreement in Canada.
Over the course of the agreement, Ontario will be investing $21.6 billion in full-day kindergarten. Together, through the Ontario Child Care Tax Credit (CARE), affordable child care options, and all-day kindergarten, Ontario parents are provided with a full array of options, benefits and supports for early years and child care.