2024 Ontario Child Care Funding: Highlights of changes

The Ontario Ministry of Education’s child care funding guidelines and memo to Service system managers are now available:

These documents contain details of how child care funding will be allocated and administered in 2024. Note that the Ministry wrote back in September that they are still working on a new funding formula that may come into effect before the end of 2024, but for now this is the approach that is being followed.

The following is a brief summary and analysis of key changes in the 2024 funding guidelines. 

For 2023-24 cost escalation is set at 2.1%

  • This is lower than it was in 2022-23 (2.75%)
  • Lower than the current rate of inflation (3.1%)
  • The total allowable cost escalation between March 2022 and 2024 is 4.91%.
  • There is a new “emerging issues” fund for non-discretionary cost escalation beyond this rate, which will be application-based.

The new CWELCC wage floor of $23.86 and annual increase ceiling of $26.00 that was announced on November 16th 2023 does not yet have an implementation date. 

  • The Ministry of Education memo to Service System Managers reads, “the ministry is working on the implementation of the Workforce Strategy and will be communicating further details in the coming months.” 
  • The 2024 funding guidelines use the previously announced wage floor of $20 per hour and ceiling of $25 per hour.
  • Provincial Wage Enhancement Grant (PWEG) of $2 per hour will continue in 2024. The 2024 cap for PWEG is $30.59 per hour. The PWEG is added to the base wage before calculation of the wage floor and annual increase.

In 2024, the Province is cutting $85.5 Million from Service System Managers’ funding.

  • This was first announced in 2019 along with cost-share changes, and then delayed using transitional grants in 2020, 2021 and 2022.
  • In 2020 the Province introduced 80/20 provincial/municipal cost-sharing for the operating costs of expansion. In 2021, the Province introduced 50/50 cost-sharing of administrative funding and reduced the allowable administrative funding threshold from 10% to 5%. These costs, downloaded onto CMSMs/DDSABs, will likely result in huge cost pressures on municipalities.
  • This cut of $85.5M does not appear to have been moved to other areas of funding and, thus, lowers the total provincial allocation to child care from $1.68B in 2023 to $1.60B in 2024. While federal funding has significantly increased, the provincial allocation to child care is lower in 2024 than it was in 2018, even before adjusting for inflation. 

2018-2024_ontario_allocations.pngThe Province plans to use CWELCC funding to require municipalities to do “value-for-money” audits of their directly operated child care programs; these audits are not being required for either non-profit or for-profit programs.

  • The purpose of the audits is to determine if funding is “being used efficiently and effectively by directly operated centres, and whether the child care services could be offered by a third-party provider instead.”
  • No funding estimate is attached to this exercise, but these audits will likely cost millions of dollars. 
  • Even if municipalities have done value-for-money audits recently (like Toronto did in 2021), these must be repeated unless they occurred after March 2022.

Although CMSMs/DDSABs are responsible for local expansion planning, the Province is requiring them to de-prioritize expansion of publicly operated child care.

  • In planning for expansion, CMSMs/DSSABs are required to ensure that "opportunities for community-based delivery participation are exhausted before direct child care delivery by the CMSM/DSSAB." (Note that "community-based delivery" does not specify that they be non-profit).

The OCBCC and our partners and allies are following up with the Ministry of Education with our questions and concerns and working to gain public attention on to these issues. If you would like to be in touch with your MPP or the Minister of Education to share your concerns, you can find their contact information here