Ministry of Education
00:00:00Official transcript
Consideration of the Performance Audit: Canada-wide Early Learning and Child Care Program.
Legislative Assembly of Ontario · Committee
Monday, December 8, 2025
Standing Committee on Public Accounts
The official transcript of the meeting, from Hansard, by heading. Ministers, officials and witnesses appear as the transcript names them; committees have no live transcript, so the record appears once the Assembly publishes it.
00:00:00Official transcript
The Chair (Mr. Tom Rakocevic)
I would like to call this meeting of the Standing Committee on Public Accounts to order. We are here to begin considerations of the 2025 Performance Audit: Canada-wide Early Learning and Child Care Program. Joining us today are officials from the Ministry of Education. You will have 20 minutes collectively for an opening presentation to the committee. We will then move into the question-and-answer portion of the meeting, where we will rotate back and forth between the government, official opposition and third-party caucuses in 20-minute intervals. Before you begin, the Clerk will administer the oath of witness or affirmation.
00:00:00Official transcript
The Clerk of the Committee (Ms. Thushitha Kobikrishna)
Denise Allyson Cole, do you solemnly affirm that the evidence you shall give to this committee touching the subject of the present inquiry shall be the truth, the whole truth and nothing but the truth?
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The Clerk of the Committee (Ms. Thushitha Kobikrishna)
Thank you. Holly Moran, do you solemnly affirm that the evidence you shall give to this committee touching the subject of the present inquiry shall be the truth, the whole truth and nothing but the truth?
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The Clerk of the Committee (Ms. Thushitha Kobikrishna)
Thank you. Matthew DesRosiers, do you solemnly affirm that the evidence you shall give to this committee touching the subject of the present inquiry shall be the truth, the whole truth and nothing but the truth?
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The Clerk of the Committee (Ms. Thushitha Kobikrishna)
Thank you. Karen Puhlmann, do you solemnly affirm that the evidence you shall give to this committee touching the subject of the present inquiry shall be the truth, the whole truth and nothing but the truth?
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The Clerk of the Committee (Ms. Thushitha Kobikrishna)
Thank you. Whitney Wilson, do you solemnly affirm that the evidence you shall give to this committee touching the subject of the present inquiry shall be the truth, the whole truth and nothing but the truth?
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The Chair (Mr. Tom Rakocevic)
Thank you very much. Welcome. I would invite, once again, each of you to introduce yourselves to Hansard, just as you begin speaking and just that one time. Thank you very much for being here, and you may begin. You have 20 minutes.
00:00:00Official transcript
Ms. Denise Allyson Cole
Good afternoon, committee members. My name is Denise Allyson Cole, and I am the Deputy Minister of Education. We’re delighted to have the opportunity to appear before this committee. With me is Holly Moran, and Holly is the assistant deputy minister of the early years and child care division; Matthew DesRosiers, who is the director of the funding branch within the early years and child care division; Karen Puhlmann, who is the director of the child care branch, also within that division; and Whitney Wilson, who is the director of early years branch within that division as well. We welcome the opportunity to provide committee members with the ministry’s response to the Auditor General’s report and outline the progress we have made, as well as the steps ahead. The child care sector in Ontario, as you know, is large and complex. Historically, parents in Ontario were paying the highest fees in the country. In March 2022, Ontario signed a deal with the federal government that would transform the child care system in Ontario, lowering fees, increasing access, improving quality and supporting inclusion. And in just a few short years, we’ve done just that through the implementation of the Canada-wide Early Learning and Child Care system—because that’s a mouthful, we refer to it as CWELCC. This required significant collaboration, not only for our ministry but for our municipal partners and child care licensees, who have come together to implement a complete overhaul of the child care system, a system that is critical to families across Ontario. Top of mind for many parents and guardians, of course, are fees, which have been drastically reduced. Immediately on signing the agreement, parents of children in CWELCC programs were eligible for a 25% fee rebate. On December 31 of that year, a second fee reduction took effect, lowering fees by more than 50% of what they had been before Ontario signed the deal. And now, as of January 2025, fees for spaces in participating programs were lowered to an average of $10 per day, with a maximum of $22 per day, which we know is helping to make life more affordable for hundreds of thousands of Ontario families. This halted and reversed the historical trend of increasing fees. For example, average fees for infants—the youngest and, typically, the most expensive age group—have declined by about 70% from the March 2022 level. In comparing the largest representative cities across provinces, third-party research shows Ontario has materially reduced costs by the greatest amount. Of the 10 cities across the country with the highest fee reductions in dollar terms, the top nine are in Ontario, most of which are in the GTA. The impact of this is far-reaching and promotes healthy child development; broader economic gains, particularly for women, through increased workforce participation; and lower household costs for families. Ontario’s plan to implement the CWELCC system also supports the creation of 86,000 net new licensed child care spaces for children age zero to five by the end of 2026. At the beginning of CWELCC, all licensed programs were invited and encouraged to join the system, and 92% of them said yes. To ensure the expanded system supported inclusion, in 2023, Ontario introduced a direct-growth approach to improve child care access for children from low-income families, vulnerable children, children from diverse backgrounds, children with special needs, francophone children and Indigenous children. As of June, Ontario has created more than 41,000 new CWELCC spaces towards our target, and the system continues to grow. Recognizing the importance of a strong and well-supported workforce, the ministry and the government introduced a workforce strategy to support the recruitment and retention of qualified professionals working in licensed child care. The strategy includes increased wages, and improving working conditions and career development for registered early childhood educators employed by child care operators enrolled in the CWELCC system. Ontario’s workforce strategy increased the starting wage for eligible registered child care educators to $23.86 per hour in 2024, up from the planned $20 per hour, and extended the eligibility ceiling for a $1-an-hour increase so more registered early childhood educators can benefit. With the annual $1-per-hour increase, on January 1, 2026—just a few weeks away—registered early childhood educators and program staff will see their wages increase to $25.86 per hour. This is a step forward in supporting the child care workforce. In addition to improved wages, key elements of the workforce strategy are supporting entry into the profession and career development, cutting red tape for employers and providing more flexibility in staffing their programs, and launching promotional campaigns to bolster awareness and value of the child care profession. Retention and recruitment of a high-quality workforce is critical to the successful implementation of the CWELCC system and will help achieve system growth. In January 2025, an entirely new funding framework was introduced. This framework was designed to strengthen fiscal accountability, ensure sustainability and protect taxpayer dollars. This new funding approach was informed by extensive sector consultation and prioritizes a simple, easy-to-administer system that more accurately reflects the true cost of child care delivery. The approach includes robust cost controls and incentives to keep eligible costs close to standardized benchmarks, while ensuring a reasonable but protected level of profit and surplus. All parameters of the program were statistically based on extensive financial data collected directly from the sector. The ministry is in the midst of developing a new online digital tool that will streamline processes for families and administrators. It will also enable the ministry to gather better data for analysis, helping support evidence-based provincial planning while reducing burden for operators and families. Rolling out in phases starting in 2026, the tool will allow parents and guardians to search and apply for programs, centralize access to wait-lists, track applications and report data directly to service system managers and the ministry. I’d now like to turn to the latest when it comes to CWELCC in Ontario. Ontario has shared serious concerns about the estimated $10-billion funding shortfall required to sustain the CWELCC agreement over another five-year term. Addressing this challenge is essential to maintaining affordability and system stability. The federal government has been aware of this funding shortfall since the start, so we both knew we had work to do together to deal with this issue. Ontario has successfully negotiated a one-year extension to the CWELCC agreement that secured over $3.6 billion in federal CWELCC funding for 2026-27. This represents a $695-million increase to Canada’s initial offer. While the one-year extension does not solve the funding shortfall, it will sustain the system for the coming year. This means that parents’ fees in CWELCC-enrolled programs will continue at their current levels with an average of about $19 a day, through to the end of 2026, and it gives the broader child care sector and Ontario families much-needed stability while we continue to work with Canada on a fair and sustainable longer-term agreement.
00:00:00Official transcript
00:00:00Official transcript
Ms. Denise Allyson Cole
Thank you. Our focus now is on securing the best possible agreement for Ontario families; one that ensures child care is affordable and delivers more spaces and workforce stability. Today, we’re here to talk about the recently released report from Ontario’s Auditor General, which has provided a snapshot of our progress under CWELCC so far, while also highlighting areas for improvement. Through the first half of this year, our team worked very closely with the Office of the Auditor General to support their review. Involving numerous conversations and hundreds of supporting materials, this was an intensive but important process—one that will support our ongoing implementation of CWELCC and help to inform plans going forward. We thank the Auditor General and her team for the recommendations, many of which support our own concerns and will be useful when we’re talking to the federal government about the future of CWELCC. I’m very pleased to say that we already have work under way that will address several of the Auditor General’s recommendations. You will have noted that many of the recommendations point to the need for more data and analysis to ensure that our policies are having the intended results. As I mentioned, the child care system in Ontario is large and complex, and one of these complexities is that the funding is administered by municipal service managers. This means that the Ministry of Education does not have access to all the data it needs to manage the system effectively. With respect to these recommendations, we’re very excited about our new digital tool. While the tool will provide a more streamlined and modern service for families, it will also enable us to collect data on barriers to access, wait-list trends, fee subsidies and, in future phases, assist with monitoring workforce data. This initiative is about creating a more equitable, stress-free digital experience for families, while establishing greater provincial consistency across the province. The tool will collect key information that will inform future planning and help to resolve many of the issues identified in the report. On fee subsidy enrolment: As more families enrol in more affordable CWELCC spaces, it is natural that the need for the fee subsidy will decrease. As the Auditor General’s report notes, there are many reasons for this. CWELCC is making child care more affordable in general, so the need for the fee subsidy is decreasing. It could also be, where parental contributions are close to CWELCC fees, families may not want to go through the trouble of applying anymore, or any of a host of other reasons. All to say, that is why the Auditor General’s report recommends that the ministry gather data and analyze the root causes for the decline in enrolment for children whose families are receiving fee subsidy. The new digital tool will help us do just that. The ministry also recently released a discussion paper to municipal service system managers, or SSMs, on fee subsidy. The paper, which was released in October, outlined five proposed child care fee subsidy policy changes and three additional areas of exploration for feedback from municipal service system managers. One area of exploration, in consultation with our municipal partners, is looking at existing or considered practices that promote or prioritize child care access for fee subsidy families. Responses from service system managers will inform future policy decisions, as well as the design of the new IT solution for child care and early years. The Auditor General’s report also made some recommendations around addressing Ontario’s child care workforce shortage and better monitoring workforce strategy targets and outcomes. In June of this year, the ministry updated its workforce supply-and-demand model, which showed Ontario is currently exceeding the number of qualified staff required under the agreement by 6%. Starting in 2024, the ministry doubled funding for the qualifications upgrade program to support more applicants in obtaining an early childhood educator diploma, register with the College of Early Childhood Educators and reduce student financial burden, prioritizing applicants living or working in francophone, First Nations, Métis and Inuit communities. We’re also beginning to see promising workforce trends following the release of the workforce strategy investments. Applicants for early childhood education college diploma programs and registration with the College of Early Childhood Educators have increased by more than 25%, which will result in more registered early childhood educators in the system. The ministry is continuing to collect and analyze available data to gauge the continued impact of the workforce strategy on wages, recruitment and retention in the sector. Building on this work, Ontario is advancing two initiatives under the workforce strategy, focused on empowering municipal service system managers to collaborate with community partners and implementing creative and equity-focused strategies to strengthen recruitment and retention of early childhood educators. The first is the Innovation Fund, providing one-time funding in 2026 to municipal service system managers to develop local solutions through partnerships with employers, schools and community organizations. The second is the 2026 ECE Promotional Fund, a time-limited initiative with funding for service system managers to promote the value of careers in early childhood education, raise awareness, attract talent and build an inclusive workforce. The ministry will take further action to address the remaining elements, including working with our municipal and federal partners to strengthen the system for families and the sector. In closing, I want to say that high-quality child care supports healthy development of kids by fostering cognitive, social and emotional growth. It is the start of their early childhood education and the foundation for success in their learning and academic journey. We know that parents and caregivers rely on access to affordable child care. It is especially critical to supporting women’s workforce participation and is a key component for economic productivity. The ministry accepted all the auditor’s recommendations, and even though the report was released only eight weeks ago, we’re already making major progress. We remain committed to delivering an early learning and education system that achieves measurable impact, supporting more than two million students and half a million early learners while strengthening the child care workforce, ensuring that public investments will be directed toward outcomes that improve learning, expand access and create lasting value for Ontarians. Thank you again for the opportunity to speak with you today, and we look forward to your questions.
00:08:02Official transcript
The Chair (Mr. Tom Rakocevic)
Thank you very much. This week, we will be proceeding in the following rotation: We begin with government members, followed by the third party, followed by the official opposition, in 20-minute blocks. We are now beginning with the government side. Who will begin? MPP Firin, you have the floor.
00:08:10Official transcript
MPP Mohamed Firin
I’d like to thank Deputy Minister Cole and her team for their presentation. My question is, in the Auditor General’s report, there’s a lot of emphasis on improving data quality and consistency. We know the ministry’s work on that has already begun. Could you talk about some of the early improvements you’re seeing as the work gets under way and how those improvements are supporting planning across the province?
00:08:23Official transcript
Ms. Whitney Wilson
Whitney Wilson, director of early years. Thank you. The development of the new digital tool is under way. It is a long process to make a tool like this. It is going to be quite transformative for the sector. As of right now, we are doing early work to design and implement the system. The outcomes that we are going to talk about today are really longer term. Once that system is implemented, we will see a much more seamless experience for families. They will be able to go to a single provincial access point to access child care and early years programming. We will see a more equitable experience. Right now, families, when they are accessing child care across the province, depending on where they’re located, may have access to some tools within the municipalities. Others may not have those. They may be dealing with paper-based processes. So we will see something that is much more equitable for families across the province. There will be significantly less burden both for families and for operators. So right now, you can imagine that a parent looking to add their name to a wait-list is going to add their names to multiple wait-lists. Each of those operators might have different processes for adding your name, maintaining your name on the wait-list, then those operators have to maintain those lists when people come into their program or move into a different program and they have to remove them. So the new system is going to do a lot of that automatically and significantly reduce that burden both for families and for operators. It will also reduce and streamline a lot of the reporting that is currently done by operators. As you can imagine, there is reporting that is done to the municipalities; there is reporting that is done to the province. All of this is going to be streamlined within the new digital tool, which will allow those operators to spend that time with children in their centres. It will also increase the amount of data available to the province. So I think, as you’ve seen in the Auditor General report, there are a lot of things that we do not have data on currently, and that really impedes our ability to plan at a local and provincial level. So by implementing the new digital tool, we will be able to get a bigger picture of the full province and the data—in terms of socio-demographic data, planning data—and it will allow us to be a little bit more planful in terms of where we are placing spaces and how we are moving forward with some of the work that we’re doing. In terms of short term, I think we are seeing a lot of input from operators and families. We’ve done extensive consultations so that those parties that are going to be most impacted by the system are informing the design and will ultimately have a better outcome when we implement.
00:09:45Official transcript
00:09:46Official transcript
MPP George Darouze
Chair, through you: Thank you very much to the team for being here to answer our committee’s questions. One thing that stood out for many of us was how different the wait-list information is collected across the regions. People often ask why the numbers look so different depending on where you live. Can you share how the ministry is gathering and interpreting that information in a consistent way and how that will eventually help guide planning for new spaces?
00:10:00Official transcript
Ms. Whitney Wilson
Based on the region, there are different ways that data is collected. Some municipalities and service system managers will collect it under a central wait-list for their region. In other regions, there is no centralized wait-list, and different operators maintain their own wait-lists and have their own processes. The demand changes across the province. You have areas with different populations, different demands, so you’re going to see that in the numbers, but there are also going to be different processes for how it’s collected. The way that the new digital tool will improve things is that there will be one single access point in the province to access all wait-lists. It will essentially centralize the wait-lists, so you will be able to see a unique demand. Right now, the province doesn’t have a good sense of how many children are actually on wait-lists because families will put their names on multiple wait-lists, and those wait-lists aren’t cross-referenced with each other. So even if we were to ask every operator in the province to provide us their wait-lists, we would still have no sense of the unique names on those wait-lists. Through the new system, we will have a real, true sense of the demand across the province that will help us plan. It will also help us in conversations with the federal government to share what that demand looks like and what the funding needs to be to accompany that demand.
00:11:34Official transcript
Ms. Holly Moran
Hi. I’m Holly Moran, assistant deputy minister, early years and child care division. One thing I wanted to add as well is that it’s part of the complexity of the system. Those wait-lists are not managed provincially; they’re not managed municipally. They’re managed largely at the local level. At the moment, the ministry only has capacity to do a point-in-time evaluation of what a wait-list might look like and only do that through a collection of that information across. So we don’t have that accurate, ongoing sense of what the demand looks like, which the new system will give us.
00:12:13Official transcript
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00:12:15Official transcript
Mrs. Michelle Cooper
Thank you, Deputy Minister Cole and your entire team for being here today and for your presentation. We hear from municipalities and partners that they work hard to provide accurate information, but every region, as you said, has its own systems. How is the ministry supporting municipalities to move towards more consistent reporting while modernization continues?
00:12:39Official transcript
Mr. Matthew DesRosiers
I’m Matthew DesRosiers, director of funding. While the SSMs do have a legislative goal in the planning, the funding, the administration and even, in some cases, the operation of child care in Ontario, there really is some benefit to standardizing a lot of the things in a centre that happen. So while we continue to work on all the good things that Whitney and Holly talked about, we’re also trying to standardize the collection of financial information that we’re getting through our new cost-based funding system. As part of the accountability framework for that, we’ve issued pretty extensive guidance out to all of the SSMs on the data that we need them to collect to allow them to do the accountability work that they need to ensure all the costs that are being incurred by the operators are actually eligible. It’s allowing the SSMs to do their accountability checks but also allowing us to gather the same information from all of the operators through those SSMs so that we can also do an evaluation of the program as well. So there’s lots of extensive guidance out to them. We’ve also provided them with reference spreadsheets, for example, that they can use if they need to do that. To that end, the guidance is specifying the data they need to collect from the licensees and various specific details. It’s also what they need to use while reviewing those submissions. We’ve given them guidance on what they need to compile if they’re doing year-end reconciliations and what they have to provide to us as well when they give us regional-level data. I think that, collectively, is really going to help us in the first instance while the digital tool is being built.
00:14:31Official transcript
00:14:31Official transcript
00:14:33Official transcript
MPP Bill Rosenberg
Thank you, Deputy, for your presentation and your team for bringing us up to date on all the newest information. When we have spoken with operators and municipal partners, a lot of them have mentioned the one-year extension and the increased federal funding, especially because it reflects Ontario’s long-term position that long-term sustainability needs to be part of these discussions. From the ministry’s perspective, what does this extension make possible in terms of continuing that work and preparing for the longer-term agreement?
00:15:09Official transcript
Ms. Whitney Wilson
As you know, the ministry’s collective child care agreements were set to expire on March 31, 2026. There are three child care agreements that that impacted: the Canada-wide Early Learning and Child Care Agreement, the early learning and child care infrastructure agreement and the Early Learning and Child Care Agreement. In February, the federal government sent us an offer letter that fell significantly short of what it would have taken to continue the program and fund it as it currently is, and to simply maintain the terms of the current agreement. From there, as I think the deputy already mentioned, the shortfall—the $10-billion shortfall—was not a surprise. This was something that was communicated—
00:15:56Official transcript
00:15:58Official transcript
Ms. Whitney Wilson
—at the beginning of the agreement and throughout, and at program review. So the extension, as it is right now, gives us more stability. It gives us another 12 months of negotiation, it keeps fees at the current average of $19 a day and it allows us to have further conversations with the federal government, prioritizing more spaces, prioritizing further workforce investments and having the conversations that we need to have to ensure that we have a longer-term agreement that allows for a sustainable program.
00:16:32Official transcript
Ms. Denise Allyson Cole
I’ll add to that as well. Although the agreement does not expire until March 31, it was really critical that we get the extension from the federal government now because municipalities are on a calendar fiscal year, so as of January 1, they would’ve been out of money. So that was why it was critical for us to get the extension now, even though the agreement does not expire until March 31.
00:16:58Official transcript
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00:17:00Official transcript
Mr. David Smith
Thank you, Deputy Cole, for your presentation. It seems like a well-greased machine here. Everybody seems to be stepping in and answering some of the questions. Communities grow in very different ways across Ontario, and we see that some areas can move more quickly than others when it comes to adding new child care space. Could you speak to some of the approaches of partnership that have been especially effective in helping regions bring new space online?
00:17:30Official transcript
Ms. Holly Moran
Thank you for the question. I’m happy to take that. When we looked at the opportunity that 86,000 net new child care spaces presented to the province, we wanted to make sure that we were lifting up access in areas of the province that historic market-driven child care had left behind. So we did an extensive review of the access ratios—how many spaces per child—right across the province, and we started out with targets that were stretch targets for many of those most-underserved communities in the province. We pushed them as far as we could to try and lift them up to where they were in other areas. The two examples that I typically use were, at that point in time, Oxford county, at the low end of the spectrum with a 16% access rate, in sharp contrast to other areas of the province like Halton region or York region, where access was closer to 50%. So we took those most underserved communities—we also factored in some socio-economic and socio-demographic factors—and lifted up areas where they were the worst served in the province. They were stretch targets for a number of those areas, and with only a year left to get those spaces on board, we had to transition and do it a bit differently. But maybe, Whitney, I can ask you to fill in some of the other pieces there.
00:18:55Official transcript
Ms. Whitney Wilson
Yes, absolutely. The service system managers have their own approaches in terms of how they request bids for proposals for things like spaces and how they consult. They are required, as part of CCEYA, the legislation, to have service system plans, and part of those plans is a requirement to consult on a regular basis, to post their directed growth plan once they actually have done that consultation and they’ve used some of the tools available to them—whether that be early development instruments, census data—to identify areas of need in their neighbourhoods, and they then have to post those plans publicly so they are available and so that operators are able to see where there is going to be prioritization of space creation. From there, when they are allocated spaces, they go through that process. But across the province, those processes would vary based on the region and the request for bids that they have and the process they have for consultation.
00:20:00Official transcript
00:20:00Official transcript
Ms. Jess Dixon
Thank you, all. The AG noted that some of the centres are operating below full capacity, and we know from people in the ridings that sometimes they think that means that there isn’t a demand for it. But we also know that the reasons are actually a lot more complex than that. What are some of the factors that you are seeing that help explain why that capacity looks different from community to community?
00:20:27Official transcript
Mr. Matthew DesRosiers
I can take that one. Maybe just to help differentiate a couple of terms here, the operating capacity and utilization are slightly different things. A centre might have a licensed capacity, which is, under regulation, how many spaces they are actually allowed to operate as long as they stay in the terms of the regulation. Let’s say they have a room licensed for 15 toddlers—that 15 toddlers is the licensed capacity. For various reasons, as you alluded to, it may be at a very local level there isn’t sufficient demand. It may also be, though, that the operator, due to the local labour market, isn’t able to go and find sufficient staff or sufficient qualified staff. So if they’re only able to find two staff for that room, then they would only be able to operate with about 10 of those toddler kids. On top of that, not all the kids may be there all the time, so they might have vacancies due to, again, very local demand issues or maybe because kids are moving in between rooms, so they might only have eight children actually in the seats. So we can see a very big difference between operating and utilization, as well as with their licence. Through the pandemic, we saw a very significant drop in the utilization rates. Enrolment went significantly down. We have been recovering since the pandemic. The difference between the operating capacity and that utilization rate has been maintained. What’s happening is that the operators are starting to operate more rooms and they’re starting to get more staff. Part of that can be due to the workforce strategy that has been spoken about, but there are, yes, a lot of potential reasons why. We also see a really big difference in that between the age groups. The spaces for the very young kids have recovered; it’s in that kindergarten space where we see a bigger difference. That could be due to split shifts, where it’s harder to go and actually hire staff who want to work those shifts. Yes, it’s lots of reasons. We don’t have enough data to know for sure, but it is recovering, which is, I think, promising.
00:22:41Official transcript
Ms. Holly Moran
I think one of the other things that we need to think about is that, as the price goes down, it also becomes less of a loss for a parent not to bring that kindergarten-aged child. If one parent is able to pick them up early from school, they may do that because they are not losing their space. It’s only $10; it’s not like it was, $100, pre-CWELCC. We would have to enter in and correct for some of those types of behaviours. No child care room, either, is ever fully occupied all of the time. It’s not like a school-based cohort where all of the children age up at the same time. Children, as they age and developmentally mature, often are moving between rooms, so a child care operator will necessarily keep some spaces vacant so that those children can transition in a comfortable way: two days in this room, three days in this room and switch the next week, that kind of thing, to help those children move through the programs properly. As well, those little ones are ill quite frequently. There’s a lot of communicable diseases going on. A little bit of pink eye can wipe out a room on you. There you go.
00:23:53Official transcript
00:23:54Official transcript
The Chair (Mr. Tom Rakocevic)
Okay. We have one minute and 30 seconds remaining. MPP Firin.
00:23:58Official transcript
MPP Mohamed Firin
The new financial reporting template is expected to give a clearer picture of how costs actually work on the ground. What benefits do you expect it will bring in terms of supporting consistent oversight and helping identify what drives costs across the regions?
00:24:15Official transcript
Mr. Matthew DesRosiers
Yes, I’ll take that one. I think, again, as we were saying, standardizing things is going be very helpful, especially in this regard. Again, as part of that accountability framework that we’ve set up, we do have this new standardized financial report. It is going to give us a lot of information. Cost-based funding, which is the new funding approach, is still in its first year, and I think as good public servants we want to make sure that we’re continuing to monitor, through that collection of good data, both the financial and the operating data. We want to make sure that we can continue to look at the parameters of that program and make sure that they are still appropriate. So, in the cost-based funding program, we have benchmark allocations, and they’re largely built up of relatively broad categories of costs. We have program staffing, supervisors, operations and accommodation all totalled into a global budget—
00:25:15Official transcript
The Chair (Mr. Tom Rakocevic)
Oh, sorry. We’re out of time. We now move on to the third party. MPP Fairclough, you have the floor: 20 minutes.
00:25:22Official transcript
Ms. Lee Fairclough
Thank you all for being here. Deputy Cole, it’s good to see you, and I can sense the care for this program that all of you have, actually, in your responses. I’ve got a few different topics that I hope to cover, but I am going to start with the cost and the program funding overall. In the most recent announcement about the extension of the federal funding, the government indicated that additional funding was provided to the province in order to maintain the fees at $19 per day, and this is just for one year. You’ve talked about the urgency around this. I guess my first question is, has the province abandoned the goal of $10-a-day daycare, or is that what we’re still working towards?
00:26:07Official transcript
Ms. Denise Allyson Cole
I think it’s fair to say that it’s an aspirational goal, but we’ve been very clear to the federal government that if we are going to meet that goal, they need to come to the table with more money.
00:26:20Official transcript
Ms. Lee Fairclough
Okay. I guess, if that’s the case—you know, I look at the provincial contribution in figure 10: The federal government is contributing 58% of the $4.99 billion. If I’m doing my math correctly, the province is contributing to 2.6%, and then there’s the shortfall, which presumably is going to land with parents. Has there been, at any time in this, where the province has considered contributing a little bit more to make this more manageable for families? Maybe I’ll start with that question, and then I have a follow-up.
00:26:54Official transcript
Ms. Holly Moran
Sure. I’m happy to take that. On the broader funding arrangement and where the shortfall comes from, maybe I can back up just a little bit. I think all of the members are aware that we didn’t sign this first agreement until almost the very end of the first year. So, what that did for the province was take that full year of revenue and push it into the next four years. Effectively, the government was able to make the agreement work, because we were taking five years’ worth of revenue and spending it in four, which increases the annual spending power that you have. The second thing that the government did was amortize our space creation. I’m imagining that you’re going to have some questions later about 41,000 out of 86,000 spaces coming on board. The sooner those spaces come on board, the longer have to pay for them. So that funding shortfall was such that we had to amortize those spaces, so the majority of the spaces come on in the last year of the agreement, because that gives you the shortest period of time to spend on them. Those are the two ways that we made the current funding work. When you renew that agreement, it’s a fiscal cliff for both agreements. We both knew, walking in, that there was going to be a $2-billion-per-year gap to achieve the goals of the agreement—just sustain, no more growth, no more wage increases for our ECEs, nothing else new, just to sustain. So, when we get there, the other thing I want to talk about in terms of the spending in the space: As Whitney mentioned at the front end, there are currently three federal agreements in this space. There’s the ELCC agreement, there’s the CWELCC and there’s an infrastructure agreement. In addition, there’s a significant amount of provincial spending that operates outside of those three programs. So, when you think about early learning and child care at the global or even pan-Canadian level, it’s about that zero-to-six space before publicly funded school becomes mandatory for families, and that early learning and what everything does. Our province is one of only three that spends for full, two-year, publicly funded kindergarten for every family who needs it. When you think about that, if those children also required full-day care under CWELCC, as they do in some other provinces, the gap would be significantly larger. So there’s a massive provincial contribution there in that space. The other thing that Ontario does is we prioritize schools first as a setting for child care programs. We continue to build purpose-built child care into every new school in the province, which is a big investment for us. We’ve also harmonized our licensing regulations so that those classrooms that the children are in from 9 a.m. until 3 p.m. can be used for the before- and after-school programs as well. All of those physical site requirements are the same.
00:30:00Official transcript
Ms. Lee Fairclough
I understand the argument, which is that you’re saying there is a certain amount of this that is funded for junior and senior kindergarten and, currently, you’re not using any other federal transfer money for early learning to offset any of those costs. Is that right?
00:30:17Official transcript
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Ms. Lee Fairclough
Okay. And then, in other provinces where they have been able to make the $10 a day work, can you just talk to me about what you know about why they’ve been able to achieve that and why we have not been able to? Have you exchanged ideas with them on that?
00:30:35Official transcript
Ms. Holly Moran
I think that was one of the points in the Auditor General’s report, to continue to work with the federal government to understand what leads Ontario to be one of the highest-cost provinces and what other provinces have done to be able to make that work. That’s an area where we have continued to participate at the federal-provincial-territorial tables to try to understand what is behind it. It’s not an area where the federal government has shared a lot of information, and PTs tend to be a little bit hesitant about that as well. Whitney, I don’t know if you have anything to add in that area.
00:31:15Official transcript
Ms. Lee Fairclough
I think it’s okay, if that’s okay. I guess my next question, then, is in those other jurisdictions, if they don’t have junior and senior kindergarten, are they using this program to cover the year that those kids would be in junior kindergarten?
00:31:32Official transcript
Ms. Holly Moran
Yes. If they don’t have full-day kindergarten, this is the program that they would have access to.
00:31:38Official transcript
Ms. Lee Fairclough
Okay. That’s interesting, actually. That kind of leads to some other questions.
00:31:44Official transcript
Mr. Matthew DesRosiers
I might just add something as well. While we don’t necessarily know the cost details of the private businesses outside of our own jurisdiction in the other provinces and territories, we can see from, say, Statistics Canada data that, prior to CWELCC, fees in Ontario were by far the highest. They were about 30% to 40% above the national average, so we had a lot more distance to go in terms of getting down to the federal targets. That’s going to be true for some of the other provinces and territories that haven’t reached $10 a day. They were already higher. So the ones that were closer to $10 to begin with can use that money for other things that we just don’t have the capacity to do here.
00:32:31Official transcript
Ms. Holly Moran
I think the last piece that I would just add is, the federal approach to funding doesn’t take into account cost of living in the province. Ontario receives the same dollar per child as Newfoundland, Prince Edward Island and other provinces get, and it disregards that differential in the costs, differential in leases, differential in wages, differential in cost of food—all of those things.
00:32:57Official transcript
Ms. Lee Fairclough
Do they do that because of scale? Recognizing you’ve got smaller populations in lots of areas in Newfoundland, that’s going to cost more as well per kid. So does it kind of balance out when you’ve got the super-high density that exists in Toronto that gives you some level of efficiency to open those daycares?
00:33:18Official transcript
Ms. Holly Moran
I don’t know that it actually creates any efficiency. I think it’s a long-standing federal policy across social programs that they demographically allocate the funding. They do a base allocation which would advantage those where costs are more efficient, and then it’s a per capita allocation on top of that.
00:33:38Official transcript
Mr. Matthew DesRosiers
I might just say on top of that too that that makes sense if you’re not also setting a target at the end of the day. So if the goal is just to make things cheaper, then there could be an argument that it’s fair to do it this way, but if you’re trying to say, “But here’s the target that everyone has to hit,” then you start to have to take into account where we are starting from, and the feds didn’t do that for this agreement.
00:34:07Official transcript
Ms. Lee Fairclough
Okay. But you couldn’t comment on—proportionately, relative to other provinces, do you think we as a province are contributing our fair share in a similar way to this program? As we said, the total program is $4.99 billion. In other provinces, my sense is that they are taking on more of a share, recognizing the kindergarten part. But just overall, do you feel Ontario is contributing a similar amount to the goals that we’re trying to achieve in this program than other jurisdictions would be?
00:34:40Official transcript
Ms. Holly Moran
My comment would be that Ontario is contributing more when you’re looking at the zero to six space. Over the same time period as the current CWELCC agreement—so 2021-22 to 2025-26—Ontario is investing about $28.5 billion in high-quality early learning and child care. This includes $18.4 billion in full-day kindergarten for four-year-olds and five-year-olds and $10.1 billion in provincial early years and child care investments. That includes the Ontario Child Care Tax Credit, which puts more money in the pockets of families, allowing them to claim up to 75% of their eligible child care expenses, including services provided by child care centres, homes and camps. So that total investment of $28.5 billion over that same period of time significantly exceeds the federal investment in this case.
00:35:34Official transcript
Ms. Lee Fairclough
The majority of that is junior/senior kindergarten, and presumably every province has kindergarten—one year of kindergarten. I think that’s what you just said. Anyway, I won’t get into the details of the numbers, but I feel like we’re putting a lot of weight on the kindergarten investment versus these early year investments and what the provincial government is actually contributing to the earlier years.
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Ms. Lee Fairclough
Okay. Thank you. I’ll move on. My next question will go to the—actually, I’d like to maybe talk a little bit about the new spaces, how we’re allocating where those new spaces go and the steps that we’re actually taking to make sure that the access rate in higher-need areas is still met. It’s my understanding there was a change in policy to make sure that we tried to hit the targets, but we didn’t necessarily consider some of the equity needs as well. Could you just maybe clarify that for us?
00:36:40Official transcript
Ms. Holly Moran
Sure, absolutely. When the agreement was signed in 2022, we did take a look at what the access rates looked like, and I mentioned in response to an earlier question that we were dealing with quite variant access rates, from as low as 16% in Oxford county to a high of 51%, 52% in York region. What we did was, we looked at the historic patterns of growth: What does it look like in that area of the province, that region? How quickly have they been able to grow in the past? We looked at socio-economic factors—like how many single-parent families there are, what the francophone population was, what the Indigenous population was, how many low-income caseloads were in that particular region—and we made adjustments to boost for those vulnerabilities within that area. So access was a primary; the secondary was a boost around the vulnerabilities. We left those targets—
00:37:39Official transcript
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Ms. Lee Fairclough
If we go back to the francophone access etc., none of that has changed?
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00:37:56Official transcript
Mr. Matthew DesRosiers
It got updated at the end of 2024, and then we did recalibration in March.
00:38:01Official transcript
Ms. Holly Moran
We recast the targets in March with about a year left to go in the agreement because, at that point in time, we didn’t have an interest in leaving any federal money for new spaces on the table. We wanted to make sure that we were capitalizing on capacity to grow. So if you were in a lower-access community and you failed to hit your stretch target, then those spaces were reallocated. We did ask every municipality, every service system manager, “What have you committed? What is available? What is actually real?” at that point, and we gave them those spaces. Where there hadn’t been commitments related to space creation against those targets, those were redistributed. It was a fairly small redistribution in the province, with most receiving what they had asked for. I would say there’s still an access problem in the province. We don’t have sufficient demand. If you look at the Quebec system, which has been in place for 30 years, demand has levelled out at about 59% for the access rate. Provincially, we’re much lower than that. Even in York region, where they have the best access, 50%, it’s below 60%. There is still an access problem that is being met through these spaces. I think it was our own Financial Accountability Officer who identified we would have had to have 200,000 more spaces in order to reach the demands of the province.
00:39:32Official transcript
Ms. Whitney Wilson
Maybe I can add on top of that: Before and after recalibration, all of those spaces were still subject to the directed growth plans. So even though the spaces maybe had some additional census data on the front end to make sure that they were targeted to low-access-rate areas, both before and after, they still had to be aligned with those directed growth plans that were targeting those vulnerable populations.
00:40:00Official transcript
Ms. Lee Fairclough
Okay. And just to really confirm: It’s still a principle of the ministry that you’re ensuring new spaces are added in the areas of highest need? Need is a major factor?
00:40:11Official transcript
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Ms. Lee Fairclough
Yes? Okay. Thank you. So, then, the next thing is really about the vacant spaces. There were some numbers that were included in the report around the 43% that remain vacant, if I’ve got that right. Let me just bring it up—yes. So 43% of all centres are operating below their licensed capacity of 80%, and 80,500 spaces weren’t utilized. My big question on that is really—I mean, you commented earlier that we used the funds. We only had four years to use the funding we got, and then we used it up a year faster, and then we still had a number—like, 27% of spaces—that weren’t utilized in that time. So I’m still trying to understand how we used up the money so quickly, and how we used it up early when we still had so much not being utilized.
00:41:02Official transcript
Mr. Matthew DesRosiers
So again, I think, on the utilization: Part of it is vacancies; part of it is just that the kids aren’t there.
00:41:10Official transcript
Ms. Lee Fairclough
We still pay? There is still money given even if those spaces aren’t filled?
00:41:15Official transcript
Mr. Matthew DesRosiers
Yes. If you think about the fact—under a cost-based approach, which is how we now fund, if I have to go back to my toddler room and I have 15 licensed spaces, if two kids don’t show up, I still have to pay for the staff person to cover the other three kids out of their five. I still have to pay for the rent. I still have to pay for the heat to be on, and the food and all of those things. To stop that, I have to then say to that staff person, “Go home,” and now three other kids have to go home and they can’t receive the care. So we’re still covering the costs that are associated with providing care, but if the space is vacant, the operator is still incurring those costs.
00:42:01Official transcript
Ms. Lee Fairclough
But if we then go back to this whole question of—we know demand is way more than what we have access for. I mean, I hear this in my constituency office all the time, actually. It’s a very, very common issue in Etobicoke–Lakeshore. I’m still puzzled how we can’t fill those spaces. Maybe somebody can just talk to that.
00:42:23Official transcript
00:42:25Official transcript
Ms. Denise Allyson Cole
Actually, I’ll come to you in a minute. Part of it is the workforce challenge. That is really driving some of the vacancies that we’re seeing across the province. The workers just are not there in the numbers that we need. Ontario is the only jurisdiction that has the college, so registered early childhood educators. So that’s one of the biggest drivers we’re seeing.
00:42:51Official transcript
Ms. Holly Moran
I think you might also remember an article a year or two ago around the YMCA in the GTA who had closed an infant room. This really underlines for me what the issue was with the workforce at the time. An infant room has a staffing ratio of three to one, so one adult for every three infants in the room. If you have a staffing shortage and you can serve 15 toddlers with two staff or—I can’t remember the ratio for preschool, but 26 kindergarten with two staff. They closed that infant room to free up the staff that they had available to serve more children in other rooms. So that can also be part of what was happening as we see those workforce numbers increasing.
00:43:36Official transcript
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Mr. Matthew DesRosiers
The other thing I just want to say, and that I think we sometimes forget: System-wide demand far outpaces supply, but it’s not a monolith system delivered by one; it’s thousands of businesses in 6,000 sites. In very hyper-local places, these markets, you might not have the demand. A very rural, remote area might not get the same demand, especially for a specific age group. So yes, it is true that, overall, the demand is very high; it is possible that specific centres just don’t have the demand for the spaces that they’re licensed for.
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Ms. Holly Moran
There are two things in terms of—if you back the clock up, when we first signed the agreement, what we did was, we wanted stability. So, of those centres that were there based on market trends in the past, all of them were invited to enrol in the system—
00:44:41Official transcript