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Under changes made by the Ontario government, municipal governments are now required to cost-share the entire child care budget not just the child care subsidies. Budget items such as wage enhancement grants, family resource centres, and supports for children with special needs used to be 100% funded by the Province. They now are cost-shared 80% provincial to 20% municipal basis. Capital costs that were once 100% funded by the province now receive no provincial funding.

In late 1999, Ontario stopped allowing local governments to apply parent fees as part of their 20% share for childcare. This one move will cost $25 million to local governments.

Costs are rising but budgets have been effectively cut through the changes to funding. Without additional dollars being flowed to local government to assume these new responsibilities many municipalities are unable to maintain a quality system and are being forced to rely on the informal sector to fulfil their child care obligations. For example, in Ottawa-Carleton they are already spending $3 million above what is shared by the province.

Workfare puts additional pressure on the childcare system

The pressure on the childcare system has been increased due to workfare programs introduced by the Ontario government.

For example, the Ministry of Community and Social Services transferred over 11,000 single parents to Toronto’s Ontario Works program in 1999. Families with children continue to make up 56 per cent of the city’s social assistance caseload. Approximately 3,300 children receiving social assistance remain on the city’s subsidised child-care waiting list.

Parents on social assistance need affordable and safe childcare so that they can get back into the job market. As long as there isn’t this kind of support, these parents will continue to be held back from looking for work, upgrading their skills or education, or taking a job.


Cash-strapped municipalities are unable to increase funding for per diems to cover these additional costs and as a result parent boards are being forced to increase parent fees.

Spiralling parent fees will force many middle-income earners into the unregulated system. Parent fees constitute a large part of the provincial childcare budget. The erosion of this funding base doesn’t bode well for regulated affordable, accessible high quality childcare.

The Ontario government recently hurt parents further by requiring parents to cash out RRSPs. New rules laid down by the province count Registered Retirement Savings Plans as “liquid assets,” which cannot exceed $5,000 for families with one child or $6,000 for those with two. Pension plans sponsored by employers don’t count as a liquid asset so people without pension plans are being penalised for trying to save for their retirement.

In Ottawa-Carleton alone this change is expected to hurt 900 children in 600 families across the region. The move to restrict eligibility for childcare subsidies is simply the welfare-ization of the child care subsidy process.

Municipal budget cutting

The first communities hit by the Harris government’s cut to childcare will likely be the smallest. The first city that decided to abandon its municipal childcare program was Elliot Lake. The city has laid off the 16 full and part-time people because of a funding shortfall of $129,000 for childcare. The childcare centre provided services to 36 children in the community.

The two city-run day-care centres in Kingston are in no danger of being closed this year, but they face formidable financial hardships next year. According to the city manager the Ministry of Community and Social Services has been trying to get the municipalities out of the day- care business for years. The city is preparing a report on the future of its day-care centres.

Other municipalities are also considering ways to cut costs in childcare delivery. Here is a sample of what has been done or considered so far:

  • One municipality has handed over the wage subsidies created for the not-for-profit sector to profit childcare centres.
  • Some are considering a system in which subsidies will be assigned to the parents rather than being assigned to the centres so parents shop for subsidised day care spaces, destabilising the funding for centre based childcare.
  • Public private partnerships (P3s) are being examined as a way to provide child care and avoid capital costs of building or purchasing new centres. Centres would be located on the property of large corporations at a reduced cost. In exchange, the centre would provide spaces for employees.


Research proves conclusively that childcare providers are the cornerstone of high quality care. It also shows that not-for-profit child care has better staff/child ratios, better trained staff, higher salary levels, lower staff turnover and higher staff morale – all of which support high standards of care.

This government, through its policies and through choking funding and reneguing on its pay equity commitments is trying to steer child care to an unregulated system with low wages. Quality care and service will be compromised. The link between positive child care and positive child development will be lost as the government drives a course that results in warehousing children.

What Next

The CUPE Ontario Social Services Committee is fighting for high quality not-for-profit childcare. We need your stories and help. Please contact us with any information you have about restructuring and cuts to childcare in your community.

Contact the SSWCC through Ian Thompson, Social Services Coordinator, CUPE Ontario Regional Office, 305 Milner Avenue, Suite 901, Scarborough, Ontario, M1B 3V4 phone (416) 292-3999,fax: (416) 292-2839, e-mail: ithompson@cupe.ca