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Children at St. Lawrence Cooperative Day Care Inc. in Toronto.Kevin Van Paassen/The Globe and Mail

Ontario child-care advocates are bracing for Premier Doug Ford’s next moves in the wake of his government’s decisions to foster expansion in the for-profit daycare sector and cut extra funding for fee subsidies.

The government quietly scrapped a cap last month that limited provincial funding for private child-care companies. The province also cut $22.7-million in new money earmarked for fee subsidies for low-income families.

“It’s not the direction that we should be going,” said Toronto City Councillor Janet Davis, a long-time supporter of affordable child care.

Mr. Ford’s Progressive Conservatives promised during the election campaign to create a child-care tax rebate that would cover as much as 75 per cent of costs, to a maximum of $6,750 per child, depending on family income. Mr. Ford did not provide details as to how the rebate would be funded.

Child-care advocates fear the government will reduce public daycare spending in order to pay for the tax credit, which they say will not improve access to affordable, high-quality licensed care.

“If they are wanting to find the money to do that, that’s not going to come out of nowhere, and we’re really worried that they’ll cut other parts of child-care money to fund this rebate, which would just be a wrong move,” said Carolyn Ferns, the public policy and government relations co-ordinator for the Ontario Coalition for Better Child Care.

In memos sent to the child-care sector last month, the government revealed it had removed the for-profit maximum percentage threshold, which capped the level of public funding available to licensed private-daycare operators. The limit came into force last year as part of the previous Liberal government’s plan to add 100,000 new child-care spaces, with a focus on growth in the non-profit sector.

“Removing the threshold will allow more families access to childcare benefits especially in communities where there is only for-profit care available,” said Kayla Iafelice, a spokeswoman for Education Minister Lisa Thompson, in an e-mail. “This threshold has only created barriers to childcare expansion and childcare access for those families who need it most.”

The government said it made the changes “in response to feedback from partners.” Ms. Iafelice said some municipalities had requested the removal of the threshold.

With the for-profit cap lifted, private child-care companies can now receive a greater share of public funding to open new facilities and provide fee subsidies.

Two for-profit providers, BrightPath and Kids & Company, did not return messages seeking comment on their plans.

Supporters of non-profit child care say the government’s move opens the door to large chains and point to nightmares in other countries. Australia’s child-care system, which relied heavily on for-profit care, was thrown into chaos about a decade ago when leading provider ABC Learning suddenly went bankrupt.

Ontario’s changes will not lead to an expansion in for-profit child care in several cities, including Toronto, which have enacted their own limits on funding for private operators. Municipalities distribute provincial dollars to licensed daycare operators.

Research has shown that for-profit daycare centres generally offer lower-quality care because they tend to hire fewer qualified workers for lower pay and experience more staff turnover.

In addition, the province last month prorated the second year of child-care expansion funding that had been earmarked to create additional fee subsidies for low-income families, cutting it to $25.3-million from $48-million. Ms. Iafelice said the reduction “is not expected to impact service levels.”

Ms. Iafelice said the increase in expansion funding “was put on hold” because the spring provincial election was called before formal agreements could be finalized with municipalities. After taking office, the provincial government prorated the funding from September to December instead of providing the amount the previous government had promised in May.

In Toronto, it means a cut of $6.4-million in funding for new subsidies, which could have helped about 500 families. There are some 13,000 children on the city’s subsidy waiting list.

“We still have a desperate shortfall for subsidies,” Ms. Davis said. “This is a devastating blow to families who could have had an opportunity to engage in the work force.”

However, Elaine Baxter-Trahair, Toronto’s general manager of children’s services, said the city is covering the shortfall with “administrative adjustments” and has received assurances from the government that it will receive full funding next year.

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