The government funding formula for child care in Ontario changed as the calendar flipped to January 2025, and with the change came the predictable advertisements from politicians. Jenna Sudds, the federal minister responsible for child care, wrote, “Kicking off the new year with more savings for families in Ontario! The new $22-a-day child care fee cap for kids under six is here, putting more money back in your pocket.”
But the federal government’s national child-care program is not putting more money into your pocket. The average fees parents pay directly to government-subsidized child-care centres may go down, but the taxes they pay to fund the subsidies are going up. There are no savings here; just a transfer of the control over spending. Governments get more control, parents get less.
Moreover, contrary to certain politicians’ narratives, the child-care sector has become a mess with increased government intervention in recent years. In the fall, ahead of the funding change, numerous child-care centres in Ontario participated in rolling closures to protest government policies, hundreds of operators and parents attended a series of in-person and online meetings to highlight the damage of increased government control, and some even protested at Queen’s Park and Parliament Hill.
In fact, some child-care centres exited the federal child-care program early in 2024 because government interference in their operations threatened child-care quality. By the fall dozens more in Ontario were exploring the possibility and some families received letters from their daycares saying they would no longer participate in the government program.
In November, ahead of the January 2025 funding changes, an industry association reported that the majority of licensed child-care operators in Milton, Ontario would opt out of the federal child-care program. While initially eager to participate, they found the government program compromised the quality of child care, exacerbated staff shortages, and was simply not financially sustainable.
Both for-profit and non-profit centres have voiced frustration with the funding changes, under which government increasingly subsidizes centres that turn significant operating control over to the state by participating in the federal program while withdrawing funding from other centres. For example, a non-profit Ottawa daycare reported in December it would lose its existing provincial funding in the new year for not participating in the federal program, to the chagrin of families using the daycare.
In addition to families and child-care operators, local news media and local governments are also sounding the alarm on the negative effects of federal and provincial policies. A recent story in the Parry Sound North Star reported the lack of child care was putting “tremendous stress” on local parents, with similar problems being felt across the province and across the country.
Another recent report from the town of St. Marys said there were more than 560 children on the waiting list for child care, that the wait list was expanding, and that even if more physical child-care spaces were added centres would be unable to staff them. In Lanark County, the Children’s Services Supervisor explained in a recent presentation that there’s a provincewide staffing shortage, limited options for parents who work parttime, a “lack of child care options in more rural areas, which create child care deserts” and despite significant need for it “licensed child care centres in Lanark County do not currently offer unique hours, overnight, or weekend care.”
That the federal child-care program is inflexible and provides inadequate access for parents who do not work traditional 9-to-5 hours is a problem not only in Lanark County, but nationwide.
Federal and provincial politicians might make lots of child-care announcements, such as their trumpeting of funding formula changes in 2025. But these announcements are simply promises to spend more money or increase their control over child care. When it comes to actual child-care access and quality, the government has only made things worse in Ontario and beyond.
Matthew Lau is an adjunct scholar with the Fraser Institute.
