TORONTO – The funding provided by the Province of Ontario to child-care facilities, is changing. On the one hand, the provincial government will cover the real costs of childcare (taking up the appeal of many structures that had said they had difficulty keeping their doors open), on the other, families will see fees reduced to send their children their children (under 6 years of age) in nurseries. Ontario Education Minister Todd Smith announced the news today on his Twitter profile.

“Given the feedback and the extensive consultation that has taken place on the new financing formula, we are quite confident that those who operate and those who want to operate will be able to do so, in our province, creating those much-needed spaces that families are looking for” said Minister Smith.

The new financing structure, which will come into force from January 1st, therefore provides that, starting from the same day, the fees paid by parents will be further reduced. They had already fallen by about 50% to an average of $23 a day and next year they will fall further to an average of $19, with a maximum limit set at $22. These costs will be further reduced to an average of $10 per day by March 2026 (delayed from a previous commitment set for September 2025).

The updates to how providers are compensated for lower rates for parents, however, do not lead to new pay increases, nor a pay scale for early childhood educators — something that advocates and many providers say is critical not only for expansion of the sector but also for the maintenance of existing spaces. Minister Smith, however, said that with the new funding formula operators will have greater flexibility in spending and this will allow them to be freer to increase staff pay.

Currently, the government is covering the amount of money parents are saving through fee reductions, but operators say simply replacing fee-based revenue (frozen from 2022) does not cover the real cost of providing care.

Provincial officials, in turn, say the new funding formula will ensure that no “$10-a-day program” operators will suffer any losses.

Furthermore, from next year a sort of “top-up” will also be available to cover “extra” expenses such as higher catering costs to offer “Kosher” food or higher rents based on the location of their facilities.

The provincial government hopes these initiatives will spur the opening of more spaces. Ontario’s agreement with the federal government commits the Province to creating 86,000 new spaces for children, but so far the new spaces created are around 51,000 and only 25,500 of these fall under the “10 dollar” system.

In the pic above, Ontario Education Minister Todd Smith in a photo from his Twitter page X (@ToddSmithPC)