Yahoo Finance Ontario reaches $13.2B child-care deal with Ottawa
After months of negotiations, Ontario has reached a $13.2 billion child-care deal with the federal government that aims to cut fees in half for full-day care by the end of this year.
Prime Minister Justin Trudeau and Ontario Premier Doug Ford announced the deal, which includes a federal investment of $13.2 billion over six years, at a press conference in Brampton, Ont. on Monday, alongside several federal and provincial ministers.
The agreement will see the federal government provide funds to reduce fees by up to 25 per cent for Ontario families with children five years old and younger in licensed care centres. The fee reduction will be to a minimum of $12 per day for full-day care, and retroactive to April 1. Fees will be rolled back by an additional 25 percentage points by the end of the year. Rebates that are retroactive to April 1 will be provided to parents starting in May, the province said. Ontario will continue reducing fees through four steps until reaching an average of $10 a day per child five years old and younger by Sept. 2025.
Trudeau said the deal will save families an average of $6,000 per child by the end of the year.
Ontario is the final province in the country to sign a child-care deal with the federal government. The Liberals pledged in last year's budget to spend $30 billion over five years to reduce childcare fees to an average of $10 a day by 2026.
"I know Ontario parents have been wondering for a while when this was going to happen," Trudeau said.
"We worked hard to get this deal done because you deserve affordable childcare, like all Canadian parents... We know the economic growth that is unlocked when moms no longer have to choose between having a family or advancing their career. It's a benefit not just to families, not just to kids, but to all of us."
Ford said that the agreement includes protections for Ontario taxpayers against any funding shortfalls and an automatic review in the third year of the program to "make sure the actual costs of the program are funded."
The federal government promised to allocate $10.2 billion over five years to help bring the average cost of childcare in Ontario to an average of $10 a day. The province had asked the Liberals to sign on to an additional year, with the federal government committing to an additional year of funding of at least $2.9 billion.
"It's a great deal for Ontario parents, and the right deal for Ontarians," Ford said.
"It's a deal that provides flexibility in how we allocate federal funding, flexibility that was critical to making this program work in Ontario."
The agreement also includes support for the creation of 86,000 licensed child care spaces, however that includes 15,000 spots that have already been created since 2019. Federal Minister for Families, Children and Social Development Karina Gould said on Monday that 40,000 spaces are expected to be be created by March 31, 2026 and that the 86,000 threshold will be reached by Dec. 2026.
While Ontario child-care advocates called the agreement "a huge step forward," groups are urging the province to address ongoing issues including low wages and sick leave. Many groups had called for a $25 per hour wage floor for child care workers. The Ontario agreement sets new minimum-wage floors for early childhood education (ECE) workers at $18 an hour for staff and $20 an hour for supervisors. The rate is expected to increase by $1 from 2023 through to 2026 until it hits $25.
"The Ford government’s announcement today of a $18 per hour wage floor for ECEs is inadequate and demonstrates how ignorant the government is about the extent of the crisis of recruitment and retention in the province and what salaries and benefits are necessary to solve it,” Rachel Vickerson, the executive director of the Association of Early Childhood Educators Ontario (AECEO), said in a statement.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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