Ontario reaches $10.2-billion child-care deal with Ottawa, sources say

Open this photo in gallery:

The federal government is expected to announce a child-care deal with Ontario on Monday, putting in place the final agreement needed for the Liberals to craft their national daycare plan, sources with direct knowledge of the talks told The Globe and Mail.

The country’s most populous province was the last holdout in the plan first announced by Prime Minister Justin Trudeau’s government in the 2021 budget. After taking months longer to negotiate the deal, the province will walk away with the $10.2-billion initially offered by Ottawa to implement $10-a-day child care.

Government sources with direct knowledge of the talks say Ontario negotiated more flexibility in its deal and an option to ask for more cash to ensure the province hits the $10 target.

A federal source cautioned though that there’s still no guarantee Ottawa will offer up more money before 2026. However, the source said Mr. Trudeau’s government did spell out how much Ontario could get each year after the initial agreement ends. The source said Ottawa has allocated as much as $2.9-billion annually for Ontario to continue funding the program after 2026.

The Globe is not identifying the sources because they were not permitted to disclose the details of the accord before Mr. Trudeau and Ontario Premier Doug Ford announce the plan at a joint press conference in Brampton on Monday morning.

The deal with Ontario was struck almost a year after the five-year child-care plan was first announced and with two months to go before a provincial election. All other provinces signed agreements with Ottawa by the end of 2021.

At an unrelated announcement in Toronto on Sunday, Mr. Ford said the two governments “worked extremely well” together.

Daycare workers are exiting the profession in droves, just as access for parents opens up

Lower daycare fees may remain years away for many parents, despite government promises

“I’ve said over and over again $10.2-billion over five years won’t give us the $10-a-day daycare,” he said, adding: “we have a great deal with the federal government.”

Asked if there was anything still holding the deal up, Mr. Ford said: “No, I think we’re good.”

The Toronto Star first reported that the deal would be revealed on Monday.

Ontario said it was taking longer to strike a deal than all other provinces and territories because the cash offered up by Ottawa wouldn’t be enough to close the gap in a province that has the highest child-care costs in the country. Last year’s federal budget showed that the top seven most expensive cities for child care in Canada were all in the Greater Toronto Area.

The federal plan expects that provinces will use the money to cut child-care costs in half by this year. Last year’s federal budget showed that the median monthly fee to put a Toronto toddler in daycare in 2020 was $1,578. In Vancouver, it was $1,165 and in Halifax it was $853.

The federal source said that other jurisdictions will also get cash from Ottawa after 2026. However, the source said Ontario was the province most concerned about getting a guarantee that it wouldn’t be left to pay for $10-a-day child care alone once the five-year deal ends. That guarantee can only be made if there’s no change in government.

Sources say in addition to guaranteed funding post-2026, Ontario was granted more flexibility for when the federal cash is spent over the five-year deal. But a federal source said that was in large part because the first year of the deal is already over. The source said that delay is also why other provinces and territories will submit an update on their progress in two years, while Ontario will submit its review after Year 3.

The details of the Monday announcement with Mr. Trudeau and Mr. Ford were already set by Sunday, but sources said the finer points of the actual deal were still being hammered out on Sunday afternoon. Liberal MPs were briefed on the agreement on Sunday evening.

For months, officials in both governments have tried to assure voters that a deal would eventually be struck. But as the weeks ticked by, parents in Ontario watched as families in other provinces and territories already began reaping the benefits of their respective programs. Two weeks ago at another joint announcement, both the Prime Minister and Premier said an accord would be announced “very soon.”

In total, the federal government budgeted $30-billion to implement $10-a-day child care across the country by 2026. When it was first announced, the Liberals billed the plan as a “legacy investment.”

With reports from The Canadian Press

For subscribers: Get exclusive political news and analysis by signing up for the Politics Briefing.