The province of Ontario and the federal government have signed a $13.2-billion agreement to lower the cost of child care in the province to an average of $10 a day by September 2025.
Ontario Premier Doug Ford and Prime Minister Justin Trudeau made the joint announcement during a press conference in Brampton, Ont., on Monday.
The $13.2 billion will be delivered over six years, with an additional year of funding of at least $2.9 billion.
Ontario was the only jurisdiction in Canada that had not signed onto the federal government’s plan, which aims to reduce child-care fees to an average of $10 a day by 2026.
A news release issued Monday by the Ontario Ministry of Education said the deal includes “flexibility to allocate federal funding in a way that will allow the province to deliver an average of $10 a day child care, including by spending the initial $10.2 billion over four years instead of five.”
Ontario had been holding out for more money, with Ford maintaining $10.2 billion would not be enough to provide $10-a-day child care for families across the province.
According to the ministry of health, under the new deal, Ontario families with children five years old and younger in licensed childcare centres will see fees reduced up to 25 per cent to a minimum of $12 a day, retroactive to April 1, 2022.
The rebates will be delivered to families beginning in May.
The deal said by December of this year, there will be another reduction in child-care costs.
In total, the province said fees for families will be reduced, on average, by 50 per cent.
In September 2024, families will see further cost reductions, with the price for child care falling to an average of $10 a day by September 2025.
The deal will also be reviewed in the third and fifth years by the provincial and federal governments.
According to the release, the deal also includes protection of all for-profit and non-profit child care spaces, and the creation of around 86,000 “new, high-quality child care spaces” for children five and under.
The deal also includes hiring new early childhood educators and supports “improved compensation” for all registered early childhood educators working in licensed child care.
While the leaders did not specify what this would look like, Ford told reporters early childhood educators they “deserve more money.”
“That’s my opinion,” Ford said. “The job is very, very difficult. It’s a job I wouldn’t be able to do. You know, they they have a special skill set and they deserve to get paid appropriately and we’ll work as quickly as possible and collaborate with stakeholders.”
According to the deal, the Ontario child care tax credit program will also continue, and the province said it will work with municipalities to enroll 5,000 licensed child care centres and home child care agencies into the program between now and Sept. 1.
Trudeau called the announcement a “historic moment” for parents, children, and businesses across the country, saying Canadian families from “coast to coast will benefit from quality, early learning (and) accessible, affordable child care.”
“We know the economic growth that is unlocked when moms no longer have to choose between having a family or advancing their career,” Trudeau said. “It’s a benefit not just to families, not just to kids, but to all of us, and that’s what’s so exciting.”
Ford thanked the federal government for their collaboration, which he said was “critical in landing this child-care agreement.”
“It’s a great deal for Ontario parents, and the right deal for Ontarians,” he said. “It’s a deal that provides flexibility in how we allocate federal funding, flexibility that was critical in making this program work in Ontario.”
Ford said it also includes built-in protections for Ontario taxpayers “against any shortfalls,” noting that the review in three years will help ensure the “actual costs of the program are funded.”
Ford said parents in Ontario now have access to “many low-cost options for child care” and can “tailor their choices to their own unique needs.
Canada’s Minister of Families, Children and Social Development Karina Gould, said parents in Ontario currently pay, on average, $46 a day for child care.
“This agreement, as the premier mentioned, will reduce licensed child care fees for children aged zero to five by 25 per cent as of April 1, saving Ontario families an average of about $2,200 per child,” she told reporters at the announcement Monday. “By the end of the year the average fee for licensed child-care, including before and after school care for four and five year-olds will be reduced by 50 per cent.”
She said this means Ontario families could save an average of $6,000.
Retroactive rebates
Asked by reporters how families will receive the retroactive rebates, Ontario’s Education Minister Stephen Lecce said individual child care operators will have to enroll in the program and will receive an “automatic benefit and savings on a monthly basis.”
Parents, Lecce explains, will not have to enroll themselves.
The ministry of education said parents who are eligible for a refund will receive it directly from their licensed child care provider.
Lecce told reporters that operators will need to make a decision before September, and within 60 days of the decision, the savings “would be trickled down to the parents — to the consumer.”
“And that will benefit about 25 per cent up front, if an operator takes a bit of time to do that — for example, two months — we’re going to cut retroactive payment through the operator directly for families to save roughly 2,000 bucks this calendar year and the remaining months between April and December.”
Come December, Lecce said 50 per cent savings would be achieved.
“And that saves, on average, per year, about $6,000,” he said. “And we believe that type of savings will make a significant difference in the life of a parent who pays some of the most expensive child care in Canada, here in Ontario,” he said. “This is a made in Ontario solution. It’s sustainable fiscally, it has the funding to deliver it as we achieve the federal mandate of $10 by 2025.”