July 14th, 2024

Concerns raised over potential for fee changes in childcare

By Lethbridge Herald on January 29, 2024.

Concerns are being raised about a potential for fee changes in childcare, as some operaters are claiming a government program limits the fees they can charge while not providing enough support to cover all their costs.THE CANADIAN PRESS FILE PHOTO /Darryl Dyck

Alejandra Pulido-Guzman – LETHBRIDGE HERALD – apulido@lethbridgeherald.com

A Lethbridge mother with two sons in daycare is sounding the alarm to let other parents know that potential fee changes could double or triple their current costs.

Jennifer Vanderlaan reached out after receiving a letter from her childcare provider earlier this month.

During a recent interview Vanderlaan said she was concerned about a possible closure and all the implications this would bring not only to her family, but to everyone else who depends on the same childcare provider. 

With the deadline to sign the new 2024-2025 Affordability Grant Agreement by the Jan. 31 deadline, her family’s fees could rise by as much as $2,300.

“If our daycare does not opt into the grant, our fees for both children are set to rise as much as $2,300 per month once subsidies are removed, and wage top-ups currently being paid by the government are factored in. This would mean that my current fees for two children of $730 will go up to potentially $3,000 a month,” said Vanderlaan. 

Under the federal-provincial Affordability Grant Agreement, the provincial government will provide funding to participating licensed child-care programs that are committed to ensure fees for all families reach an average of $10 per day by the end of 2025-26. 

The letter received by her provider, which is a member of the Association of Alberta Childcare Entrepreneurs (AACE) reads in part: “This new agreement presents terms that threaten the very existence of our program. As a result, we are forced to anticipate the very real possibility that we may not be able to sign into this next phase of the grant, which would mean a need to charge parents full, pre-grant fees, effective February.

“Alternatively, if we sign into this agreement as is, just to keep the doors open we will be forced to make severe cutbacks, which we believe will decrease the quality of our program, including: cancelling the meal program, field trips, and all extra activities and spending, cutting salaries of directors and hard-working educators – risking retention, laying off staff and/or decreasing the number of staff and hiring less experienced staff.”

In a statement recently obtained from the Office of the Minister of Children and Family Services press secretary Ashli Barrett said in a statement to the Herald that Alberta has approximately 2,250 child care operators, the vast majority of which have signed on to the new grant agreement.

“While the Association of Alberta Childcare Entrepreneurs represents approximately 10 per cent of all childcare operators, the majority of operators have told us they appreciate the reliable funding government provides through the agreement, as well as increased enrolment as childcare is made more affordable and accessible for families,” said Barrett. 

Affordability grants are an interim measure and will be replaced by a new funding formula that will determine how funding is allocated, Barrett said. 

“Engagement sessions with operators were recently held to get their input, and we are currently engaging with parents to gain their feedback on what high quality childcare should look like in the province.”

Childcare centre operator and chair of the AACE Krystal Churcher, in a recent interview, talked about the multiple financial shortfalls caused by the agreement, including delay in payment, only a three per cent increase and the need for operators to fund their administration costs upfront. 

“The government is essentially funding its programs through operators and we’re having to wait 40 to 45 days to receive a payment back from the province, which is causing operators to struggle to keep the doors open under the new agreement, where they’re losing access to about 85 per cent or more of their cash flow on the first of the month,” said Churcher. 

She said it is  hard for operators to only have access to 15 per cent of their income at the first of  the month. For some centres this represents about $12,000. 

“My centre is a small centre and my payroll for one pay period is way more than $12,000. Most people’s rent for their centres is more than $12,000 a month,” said Churcher. 

In her statement, Barrett said on average claims made by childcare operators are processed five to 10 days from when they are submitted. 

“Work on the creation of a new system is already underway to streamline and improve payment processes in order to address operators concerns around disbursement times,” says Barrett. 

She added that Alberta fought hard for private operators to be included in the federal-provincial childcare agreement. At every opportunity, the province continues to advocate on behalf of families and operators with the federal government for more flexibility within the agreement.

In the days after talking to the Herald, the AACE sent a press release in which Churcher is quoted  as saying “Alberta’s childcare operators have no choice but to sign the 2024 Affordability Grant agreement. If they don’t sign, it means immediate insolvency for some and drastic service reductions for others; if they do sign and nothing changes, it means an inability for some operators to remain financially viable over time and reduction of services across the sector.”

Operators in multiple provinces are threatening to pull out of the national child-care system or even close their doors. They say the federal-provincial agreements limit the fees they can charge while not providing enough support to cover all their costs. 

“It’s been underfunded from the beginning,” Churcher told The Canadian press.

She said Alberta operators are planning to start a series of “rolling closures” on Tuesday to draw attention to the problems that come with offering parents low-cost child care without ensuring the cost of delivery is still covered.

“You can’t even buy coffee and a muffin for $10 a day,” said Churcher. “We’re walking out in protest.”

-with files from The Canadian Press

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Southern Albertan

Early childhood education and care is an investment. Read on why it’s good for a successful economy. This is why successful countries invest in it. The Nordic countries are worth researching on this.
“Why Canada can’t work without good childcare: How early childhood education and care supports the economy”