An association representing child-care centres across Alberta is calling on the federal and provincial governments to provide emergency funding as the deadline to sign the Affordability Grant Agreement looms.
The Affordability Grant Agreement was established by the Alberta government in 2021 under the federal-provincial child-care agreement, which promised parents that they would pay an average of $10 per day for child care by the end of 2026. The grant aims to cover administrative, overhead and educator costs and recipients must commit to working with the government to provide more affordable child-care options.
Child-care operators have until Jan. 31 to sign the agreement for the 2024-25 year. According to the province, all operators in Alberta (approximately 2,252 eligible operators) opted into the agreement in 2023.
Premier Danielle Smith also directed Children and Family Services Minister Searle Turton to re-commit to the $10-a-day child-care plan in a mandate letter published in July 2023.
“There’s a lot of work that has to be done until we actually hit our goal of $10-a-day daycare, but I’m pretty excited,” Turton told Global News last year.
“Families want to know that the daycares that they take their kids to are safe, accessible, inclusive, and I’m going to do my best to reach those targets as part of the federal agreement.”
However, the Association of Alberta Childcare Entrepreneurs (AACE) said the plan will produce significant financial shortfalls for child-care facilities across the province.
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According to a letter addressed to Alberta’s Minister of Finance Nate Horner on Monday, operators who opt in will be required to reduce fees by 50 per cent, with the province covering the remainder. However, grant reimbursement payment is often delayed by 40 to 45 days, the AACE said, forcing many child-care centres to finance their operations through loans and lines of credit.
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The letter also said the new 2024 contract will force operators to carry over $69,000 of cash flow before they receive reimbursement 40 to 45 days later.
Krystal Churcher, AACE chair, said the province must come up with emergency funds to cover the cost of child care in addition to one full month’s worth of grants under the Affordability Grant Agreement.
“Alberta’s childcare operators have no choice but to sign the 2024 Affordability Grant agreement. If they don’t sign, it means immediate insolvency for some and drastic service reductions for others; if they do sign and nothing changes, it means an inability for some operators to remain financially viable over time and reduction of services across the sector,” Churcher said in a news release on Tuesday.
“The ball is in the Alberta Government’s court to come up with emergency funds. If they don’t, they will have to explain to Albertans why they let some childcare operators go insolvent and why childcare services have been reduced across the province.”
The news release carried on to say the child-care industry is in its “most financially vulnerable period” since the $10-a-day child-care announcement. Churcher said the sector has had fees frozen since 2022, and grant amounts have only increased by three per cent annually, which falls below the inflation rates.
The freeze was announced and implemented without industry consultation, the AACE’s letter said.
“We understand the (Alberta Canada-Wide Early Learning and Child Care Agreement) signed between the government of Alberta and the government of Canada places very challenging restrictions on Alberta’s ability to manage its childcare sector and we know from several reports that the federal government has significantly underfunded the program across Canada,” Churcher’s statement read.
“But it was the government of Alberta that signed the deal that caused this situation without first consulting with its own sector, and now we have no choice but to count on them to come up with emergency funds to keep the industry afloat and childcare quality at a level that parents expect.”
The association said it will launch a public awareness campaign in the coming weeks to educate parents about the financial hardships that the $10-a-day agreement has placed on child-care centres, as well as the impact the agreement will have on child-care quality and choice.
The AACE also said it wants more flexibility for provinces to develop affordable child-care programs that align with the needs of each province.
“Alberta has had a thriving, high-quality mixed market system for decades and Albertans will be shocked when they begin to understand that the $10/day childcare program is effectively a hostile government takeover of private businesses,” Churcher’s statement continued. “AACE is confident that Albertans will actively oppose Prime Minister Trudeau’s efforts to transform the childcare industry to fit his ideological vision.”
In an emailed statement for Global News, children and family services ministry press secretary Ashli Barrett said:
Alberta has approximately 2,250 child care operators, the vast majority of which have signed on to the new 2024-25 Affordability Grant Agreement.
While the Association of Alberta Childcare Entrepreneurs represents approximately 10 per cent of all child care operators, the majority of operators have told us they appreciate the reliable funding government provides through the agreement, as well as increased enrolment as child care is made more affordable and accessible for families.
Affordability Grants are an interim measure and will be replaced by a new funding formula that will determine how funding is allocated. Engagement sessions with operators were recently held to get their input, and we are currently engaging with parents to gain their feedback on what high quality child care should look like in the province.
On average, claims made by child care operators are processed 5-10 days from when they are submitted. Work on the creation of a new system is already underway to streamline and improve payment processes in order to address operators’ concerns around disbursement times.
Alberta fought hard for private operators to be included in the federal-provincial child care agreement. At every opportunity, the province continues to advocate on behalf of families and operators with the federal government for more flexibility within the agreement.
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