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Andrea Mrozek: The serious problem of excluding private care in Canada’s child-care system 

Commentary

When the Senate considered Bill C-35, An Act respecting Early Learning and Child Care in Canada, they heard from close to 60 witnesses. The resulting Senate committee report was a mere six paragraphs. Its last sentence points to what is an ongoing thorn in the side of achieving a child-care system of any kind, let alone one that is accessible, affordable, and high quality. 

“Your committee recommends that the agreements with provinces and territories…focus on providing funding to create a high quality public early learning and child care system,” wrote Committee Chair Ratna Omidvar (emphasis mine).

In other words, the report questions the continued inclusion of private child care.

Statistics Canada says of the families using non-parental care, only about a third use the type of child care the federal-provincial $10-a-day agreements fund. Consider also the many families providing care for their own kids, foregoing additional wages whilst Canadians earning $180,000 annually gain access to subsidies for licensed daycare spaces. 

Frankly, Canada’s national daycare system excludes many more Canadians than it includes. Statistics Canada data tells us that whether a child care is public, not-for-profit, or private does not register when parents make child-care choices. Parents simply expect lowered fees. 

Yet hostility to all forms of private care is embedded in every child-care agreement across Canada. Alberta’s agreement is more punitive than British Columbia’s, which is surprising, given the Alberta-federal agreement in 2021 was heralded as achieving a victory for private child care. 

Of course, Alberta’s agreement pays lip service to private care. However, the same agreement removes the freedom for private care to flourish. There’s the “cost-control framework” and a government-mandated “For-Profit Expansion Plan.” Neither concept meshes with entrepreneurs’ realities. In a November 29, 2023, Ministry of Child and Family Services town hall for child-care operators, Assistant Deputy Minister in Children and Family Services Joni Brodziak clarified that up to 85 percent of spaces must be in “facility-based care,” not family day homes. That’s a high level of state intervention.  

While all child-care providers face hurdles in transitioning to the new system, government mismanagement creates an acute problem for smaller private providers. Krystal Churcher operates a preschool in Fort McMurray and a child-care centre in Calgary. She also started the Association of Alberta Childcare Entrepreneurs, an advocacy group representing owner-operators. “Smaller centres,” Churcher told the Senate in October 2023, “lack the financial reserves or cash flow to sustain the demands placed upon them by the agreement. Unlike larger centres, they struggle to serve as unpaid financial agents as required under the current terms.”

The usual rationale for prioritizing not-for-profit care is its supposed superior quality. However, given government’s assault on the ability to own or expand a private centre, for-profits are now becoming not-for-profit. So, the same owners offer the same service under a different model. One provider who preferred anonymity said, “They lease back their furniture. They contract out their kitchens. They contract out their transportation… Some of them contract out their ECE staff.” 

Christine Pasmore runs Wee Care, a private centre in Grand Prairie. Any further expansion she undertakes will be not-for-profit. “I hold reservations about the government providing adequate funding to ensure the delivery of quality childcare services,” she explains. “Opting for a not-for-profit model offers us the flexibility to engage in fundraising, such as raffles and casinos, which can bridge financial gaps and support our commitment to quality childcare.” Bridging shortfalls is quite a far cry from “profiting” off “public resources,” the oft-cited concern in committee testimony on Parliament Hill. 

No matter the type of child care she starts, Pasmore points to government ineptitude. “It’s been a difficult process to get the grants. There’s a lot of back and forth where the government does not even understand its own process. A real lack of understanding that things cost money. And that there are real people behind this.”

When for-profit centres simply become not-for-profits, it undermines the reigning orthodoxy in child-care research, which is that not-for-profit child care is of higher quality. But that doesn’t stand up to greater scrutiny. 

Firstly, quality discussions, especially on Parliament Hill, are riddled with conflicts of interest. The overwhelming majority of committee witnesses were publicly funded, either being part of government or a government-funded association—both of which stand to benefit financially from a system that favours public/not-for-profit care. Likewise, labour unions, which would also gain members from unionized staff in a public child-care system, played an outsized role in Parliamentary testimony. 

The quality discussion is also incomplete. In his Parliamentary Committee brief, economist and public system advocate Gordon Cleveland included a chart that shows Quebec’s government considers for-profit care centres to have “inadequate” quality more often than public centres. However, the chart doesn’t tell us why this is so. Is it the for-profit status, or is it that these providers don’t receive the benefit of the provincial subsidy

Indeed, a 2005 report showed “evidence claiming to show a quality difference between for-profit and non-profit in Canada tends to ignore the fact that many provinces discriminate against for-profit child care by denying them grants and subsidies available to non-profit centres. When these factors are taken into account, there is no statistical difference in quality between the two sectors nationwide.”  

The biggest quality difference is not based on the profit motive, but rather is between family and non-family care. A major 2007 National Institute of Child Health and Human Development study in the United States assessed all non-maternal care. It found all centres have the lowest quality of care. “The highest level of positive caregiving was provided by in-home caregivers, including fathers and grandparents, caring for only one child, closely followed by home-based arrangements with relatively few children per adult. The least positive caregiving was found in centre-based care with higher ratios of children to adults,” the study says. 

Despite a $30 billion federal commitment, Canada has not had a robust child care quality discussion. A 2022 Canadian government review confesses: “Unfortunately, [child care] quality has received minimal attention in the Canadian landscape.” 

Canada’s real conundrum is that the desire for accessibility, affordability, and high-quality care is simply impossible. Independent researcher and political columnist Rahim Mohamed says we can’t have all three. “Quebec managed to reconcile low fees with accessibility (all things considered) but sacrificed quality. B.C., so far, has been more deliberate/selective in rolling out its child care program but hasn’t created spaces at a fast-enough pace for the public’s liking.” (British Columbia public daycare advocacy group $10aDay.ca recently advertised that “only 3 percent of families have access to a $10-a-day childcare program.”)

Public system advocates are in a bind. They can have majority public care accessible only to a slim minority. Or they can have a broadly accessible system that they believe is lower quality. Provinces are also in a bind, having signed restrictive agreements. But there is hope. The agreements the provinces signed include a clause about renegotiation in 2026, noting it is “the opportunity to review and course correct, if required.”

For so many families, parents, and caregivers of all kinds, that course correction cannot come soon enough.

Peter Menzies: The government surrenders to reality with rewritten Online News Act—and pleases no one

Commentary

There were some long faces in the news industry last week when Heritage Minister Pascale St-Onge rolled out the final terms of her surrender to reality.

Media executives who once campaigned for the Online News Act with sugar-plum visions of Big Tech cash dancing in their heads were left to deal with some pretty serious lumps of coal. After years of effort to procure what they once fancied would be hundreds of millions of dollars annually from web giants, all St-Onge could bring down the chimney was a bump up in Google’s spend to $100 million.

How much the mother of all search engines was already paying to publishers is unknown, but in-the-know estimates tend to range from $30-$50 million. Splitting the difference at $40 million would mean the industry—newspapers, broadcasters, and online platforms—wound up with $60 million in fresh cash, give or take. 

That’s less than the Lotto Max jackpot Rhonda Malesku of Kamloops and Ruth Bowes of Edmonton shared last summer. A lot of money for Rhonda and Ruth for sure, but for an entire industry it’s a drop in a leaky bucket.

Then there’s the fact the Act resulted in Meta blocking all news links in Canada on Facebook and Instagram. Again, the exact cost is unknown but the social media company had been spending $18 million on journalism supports plus—and here is the killer—Meta estimated it had been sending $230 million a year worth of referrals to news websites. 

Even if Meta is only half right, that still leaves the news industry many tens of millions of dollars worse off. If Meta’s estimate is accurate—and no one has really debunked it—the scenario is a lot uglier.

This is what happens when you make things up. 

The Act was rooted in the make-believe premise that “web giants” were profiting from “stealing” news. Legislation was designed on that basis to force Big Tech to “negotiate” commercial deals and share those profits with all news organizations.

In the end, as Michael Geist has detailed, that charade of “compensation” was dropped as the government, desperately afraid Google would follow Meta’s lead, posted regulations that essentially rewrote the Act to suit the search engine and, as an aside, puzzle lawyers. All that the media were able to salvage from the hustle was a fund they wound up fighting over like street urchins in a soup kitchen.

Here, St-Onge actually did something sensible. Her original plan was to have the fund distributed solely on a per journo basis. In other words, if there are 10,000 journalists, $100 million would turn into $10,000 per journo, never mind whether they are paid $35,000 or $150,000. The problem with that is that one in three Canadian reporters works for CBC, which is not in mortal peril. The next highest is Bell Media, whose parent company made $10 billion last year. Meanwhile, the Toronto Star is hemorrhaging at a rate of $1 million a week, small centres are becoming news deserts, and Postmedia’s stable of zombie newspapers continues to, well, zombie on.

Broadcasters would have consumed 75 percent of the loot and the vast majority of the cash would wind up with companies for whom news is not a primary aspect of their operations.

St-Onge changed that to cap private broadcasters’ windfall at 30 percent, with CBC limited to 7 percent.

That means 63 percent of the money will go to operators in the greatest peril which, for a fund resulting from a need to address industrial poverty, is at least rational.

Still, there was grumbling.

“Well, this is disappointing—sure wasn’t expecting a cap on broadcasters’ access to compensation,” Tandy Yull, vice president of policy and regulatory affairs for the Canadian Association of Broadcasters, posted on LinkedIn.

“Hey, Universe! More needs to be done to support Canadians’ most important providers of news, local radio, and television stations, who are facing significant—even existential—declines in advertising revenue,” she added.

Yull went on to stake broadcasters’ claim to government assistance currently reserved for newspapers and online-only media: the Journalism Labour Tax Credit and the Local Journalism Initiative.

And of course “our democracy demands that we explore these and other options—soon.”

She may not have long to wait.

Broadcasters opened up a fresh lobbying for loot campaign just last month when the Canadian Radio-television and Telecommunications Commission (CRTC) held a hearing to launch the implementation of the Online Streaming Act.

Supposedly about funding Canadian entertainment programming, the concept of a news fund was introduced early and repeated often. 

Commissioners appeared happy to embrace well-worn lines about a news “crisis” that needs  “urgent” attention to prevent—cue the tympany—the death of democracy. And they did so without needing to be persuaded there was any rational reason for creating a fund which, logically, makes no more sense than taxing cinemas to pay for newspapers. Nor were any concerns raised about impacts on entrepreneurship and online innovators.

“Local news is in crisis and requires immediate intervention,” Susan Wheeler of Rogers, which made $7.12 billion last year, told the panel.

“A fundamental outcome of the modernized contribution regime must include new mechanisms to provide long‑term financial support for high‑quality Canadian‑produced broadcast news from credible outlets,” she said, calling for 30 percent of money raised from foreign online streaming companies to be directed to a news fund “accessible by all private TV and radio stations producing news.”

The humiliating squabbling over the remnant scraps of the Online News Act clearly wasn’t the end of the Great Canadian Quest for other people’s money.

So maybe the shakedown of Meta and Google didn’t quite work out. But Spotify, Disney+, and Netflix? They have money. Let’s mug them instead.

It’s not like anything bad could happen. Right?