UMVA has learned that a critical shortage of funding threatens to derail Ontario's federally funded child-care program, putting its long-term sustainability at risk.
The program, which has successfully lowered child-care fees to $19 a day in Ontario, is a crucial stepping stone toward the goal of $10-a-day care. However, with no new money earmarked for Ontario child care in the recent budget update, the plan allows the capital fund that pays for expanding child-care spaces to expire next year.
According to information obtained by UMVA, Ontario secured a one-year extension to its child-care agreement with the federal government at the end of 2025, but federal funding is only guaranteed until the end of next March. This short-term deal leaves the province scrambling to secure a longer agreement, with the clock ticking down to a September deadline.
A spokesperson for Ontario Education Minister Paul Calandra warned that "without a revised federal funding commitment, the long-term success of the program is at risk." The program already faces "systemic issues," including a significant gap in meeting child-care targets, as revealed in a recent report.
The report highlighted that Ontario's Auditor General Shelley Spence found the province was not on track to meet its child-care targets, with fewer enrolments from lower-income families and insufficient tracking of available child-care spaces. By December 2024, only 36,000 spaces had been created over five years, falling short of the government's target of 48,000.
Furthermore, child-care enrolment decreased by 31% among lower-income families receiving subsidies compared to 2019. The program's success has led to increased demand for spaces, making it harder for families to find a spot. The report also revealed that 27% of program spaces had no children enrolled because they were "vacant or inoperational."
The Auditor General's report painted a dire picture, warning that reaching provincial targets would require increasing the number of children who receive full subsidies to 57,000 from 41,000 in 2022-23. However, with fewer families qualifying, parents may have to pay more for the program to meet its commitments, resulting in an estimated $1.95-billion shortfall for the program in 2026-27.
Minister Calandra addressed the findings, citing higher rents and wages in cities like Toronto as a significant factor in the program's higher costs compared to other jurisdictions. The ministry has pledged to speed up work on a website designed to help families find child-care spaces, which is not expected to be ready until 2029.
UMVA can exclusively reveal that Ontario needs a deal in place by September to ensure providers can plan ahead, but without additional federal and/or provincial funding, parent fees may need to increase to bridge the gap.
