Alberta, Ottawa strike funding deal for daycare operators

The number of subsidized daycare spots housed in private facilities in Alberta can expand by up to 22,500 spaces over the next three years, as the province and federal government have struck a deal outlining acceptable costs and profits for operators receiving public money.

Alberta announced Tuesday that roughly 1,600 of those new spots will be eligible for funding “almost immediately” and another 2,000 slots will be available as soon as licensing requirements are complete. The provincial and federal governments made the announcement while detailing a framework that will guide what costs operators can pass along to parents and, for private operators, how much they can profit.

The Alberta government signed a $3.8-billion deal with Ottawa near the end of 2021 to join the national child-care program. About 67 per cent of daycare spaces in Alberta are run privately, making it an outlier in the country and complicating the negotiations with Ottawa. The federal Liberals want to reduce daycare costs to an average of $10 a day by 2025-2026 and, with respect to Alberta, needed a formula that would allow more private operator to access government subsidies while still generating a “reasonable profit.” This week’s agreement, known as the cost control framework, applies to non-profit and private operators alike.

“Access to licensed, high-quality child care is absolutely necessary helping children learn, grow and develop to their full potential, while giving parents the freedom and the choice to enter or re-enter postsecondary or the work force,” said the province’s Municipal Affairs Minister, Rebecca Schulz. She negotiated the original five-year deal, which did not provide funding for new private daycare spaces created after March, 2022.

Alberta Children’s Services Minister Mickey Amery said the province wanted private operators folded into the deal: “We want a system that welcomes and embraces their full participation.”

In a document explaining the cost control guidelines, the provincial government said that under the formula, “providers may generate a profit, but the surplus earnings, or other resources, are to be directed towards improving child care services rather than for the personal benefit of owners, members, investors, or to enhance asset growth.” The framework, it added, is to “establish the parameters for a reasonable profit or surplus and the sound and reasonable use of public funds.”

The document, however, does not outline hard targets. It states total government funding, plus parent fees, should equal the cost of delivering “core child care services.” These expenses will vary by operator and region, but must fall within Alberta’s legislated parameters.

“Reasonable profit and surplus can be achieved by operators through efficiency while maintaining quality and the provision of enhanced child care services,” the government said. Parental fees may climb based on an operator’s “enhanced services,” such as optional field days, transportation and special programming. Fees from those expenses are beyond the scope of the national agreement.

Federal Minister of Families, Children and Social Development Karina Gould said allowing private child-care operators to be eligible was always part of the plan.

“Any existing licensed provider or space, either for-profit, not-for-profit, private, public, was grandfathered into the agreement. So today’s announcement isn’t about existing licensed spaces. It’s really about expansion of new spaces to meet those space expansion numbers,” she said.

As of last September, more than 112,000 spaces for children up to kindergarten age were eligible for funding, in both private and non-profit licensed child-care programs. Alberta said parents with a child in full-time care will save between $450 and $635 a month under the expanded agreement.

The province’s Opposition NDP applauded the announcement but said the United Conservative Party government should have acted sooner.

“The UCP’s foot-dragging on this issue has caused a lot of stress and anxiety for Alberta child-care operators and parents,” Children’s Services critic Rakhi Pancholi said. “The UCP’s implementation has been incompetent, confused and poorly communicated to child-care operators and educators.”

With reports from The Canadian Press