Premier Doug Ford’s cuts and changes to child-care funding are expected to cost the City of Toronto $84.8 million this year alone and jeopardize 6,166 subsidized daycare spaces for low-income parents, according to city staff calculations.
City manager Chris Murray emailed Mayor John Tory and Toronto’s 25 councillors the grim bombshell, the results of city staff number-crunching, late Thursday afternoon.
The Star obtained a copy of the email outlining the latest in a series of Progressive Conservative provincial budget cuts that could cost the City of Toronto, over the next decade, billions of dollars in funding for transit, public health and more.
Toronto councillors and daycare advocates are expected to hold a news conference Friday demanding the Ford government reverse the elimination of a $50 million fund that helps licensed child-care centres cover increasing labour costs and shield parents from fee increases, along with other changes.
“Ask Torontonians what makes life unaffordable — it’s housing and child-care,” said Councillor Gord Perks, who had not yet read Murray’s email but knew child-care funding is going down.
The memo to council says Ford’s April 18 provincial budget didn’t provide enough detail to determine Toronto’s 2019 funding allocation for subsidized child-care.
But city staff are concerned enough about the impact that they prepared estimates with the best information available.
“At this time, staff estimate the cumulative impact of the changes at $84.8 million in 2019 ($28.6 million due to a reduction in allocation, and $56.2 million due to cost-sharing changes),” Murray wrote.
“This represents a direct pressure on the 2019 Children’s Services Operating Budget, which City Council has already approved and for which the municipal levy bylaw has been passed.
“Child care fee subsidies are funded out of General Allocation and Expansion Plan funding. Assuming an average fee subsidy cost of $12,000, the funding changes represent a loss of up to 6,166 child care fee subsidies.”
Murray also noted: “As with recent changes to the provincial/municipal cost-sharing arrangements for public health, the City was not consulted or provided with any advance warning of these changes.”
Toronto estimates Ford’s public health cut will cost Toronto $1 billion over a decade. Ford’s government has called that inaccurate fear-mongering, insisting the cut will be much less.
Ontario is cutting a total of $80 million from licensed child care across the province, including the $50 million fund to help offset costs for licensed child-care providers.
The government’s so-called “fee stabilization support” was introduced last year by the former Liberal government when the minimum wage increased from $11.60 to $14 an hour. It helped to subsidize pay raises in daycares where staff earned less than $14 an hour, so the costs weren’t passed on to parents through higher fees.
The other $30 million is administrative cuts being squeezed from the system, according to an Education Ministry memo released this week that outlines almost $1.6 billion in child-care funding to municipalities for 2019.
Almost all of the province’s 47 municipalities and district social service administration boards will see less money for child-care from the province this year. The move has already led to at least one child-care centre in Peel Region telling parents their fees will increase — up to an extra $72 a month for full-time infant care.
On Thursday the City of Hamilton estimated the subsidy cut alone will cost that city $3.5 million.
Hamilton city children’s services budget is taking “the biggest hit,“ said director Grace Mater, adding council must now decide in a hurry whether to dip into reserves to cover the shortfall or cut service levels.
“We want to give everyone as much notice as possible of any changes,” said Mater, noting parents and care providers are already planning for next year. “It (child-care expenses) can have a huge impact on your family’s financial planning.”
Education Minister Lisa Thompson has said the $50 million fund was one-time funding “put in place to correct a mistake that the former Liberal government made.”
She said Progressive Conservatives’ child-care changes are “getting it right once and for all for Ontario daycare,” noting the government is continuing a grant to enhance the wages of early childhood educators by $2 an hour.
As for parents, the government’s recently announced $390 million child-care tax credit will “be leaving, ultimately, more money in their pockets, (and give) parents flexibility, accessibility and affordability when it comes to obtaining care in Ontario.”
“We’re investing $2 billion,” Premier Doug Ford told the legislature. “We’re helping 300,000 families out there — 300,000 families.”
The tax credit, announced in the April budget, applies on a sliding scale to families with incomes of up to $150,000 and will provide a rebate of up to $6,000 per child under 7, and up to $3,750 per child between 7 and 16.
Murray wrote to council that “the province has reported that the average annual tax credit benefit per family will be $1,250. Staff have no information from the province at this time on how this tax credit may impact fee subsidies in the future.
“In general, the CARE tax credit is of less benefit to families when compared to a child-care fee subsidy, and middle and lower-income families are most affected by the change in different approaches.”
Murray gave an example where, under the CARE tax credit, low-income, two-children families would face costs $23,430/year higher than they would with a fee subsidy. The highest-income families, meanwhile, would pay $5,850/year more.
“Some families will not be able to afford the higher costs and will make decisions such as moving out of the licensed child-care system, or leaving or not returning to the workforce,” Murray wrote.
With files from Laurie Monsebraaten and the Hamilton Spectator