A major child-care provider in Toronto is cutting staff raises, blaming Ontario’s funding approach to the national $10-a-day program. The Learning Enrichment Foundation (LEF), overseeing 25 centres in the city, informed parents via letter about the decision, citing the funding formula as jeopardizing the sector.

According to the foundation, the current funding fails to cover the necessary wages and expenses for quality child care. This shortfall has led many operators, including LEF, into deficit, prompting tough decisions like wage reductions.

Peter Frampton, executive director, explained that initially raising wages to $30 an hour helped with staffing challenges. However, funding depletion forced LEF to backtrack, reducing wages by $2.32 per hour. Frampton acknowledged the staff’s understanding amidst the difficult situation.

He expressed hope that future adjustments to the funding formula might reverse the wage cuts. Other child-care providers, like the YMCA, have also warned of potential closures unless the funding model reflects actual operational costs rather than just revenue replacement.

The province recently communicated plans for a new funding structure in 2025 but hasn’t disclosed specifics. Child-care centres typically adjust parent fees to cover rising costs, but frozen fees since 2020—mandated by the national plan—haven’t kept pace with current expenses.

Alana Powell from the Association of Early Childhood Educators emphasized the severe impact of wage reductions on ECEs, affecting their ability to cover basic living expenses. She underscored the broader issue of underfunding in child care, where operational costs are often subsidized by low-wage workers.

Despite Ontario setting a wage floor of $23.86 per hour under the $10-a-day program, advocates argue it’s insufficient to address the sector’s needs. Ministry officials have flagged a potential shortfall of 8,500 ECEs by 2026, despite plans to create new child-care spaces.

Ontario has called for increased federal funding to support its efforts under the program. A spokesperson for the federal minister expressed disappointment over the wage cuts and urged Ontario to enhance ECE compensation.

Meanwhile, tensions persist over funding allocations, with Ontario defending its financial support and urging operators to use available resources effectively. The federal government continues to advocate for Ontario to swiftly update its funding model to ensure stability and success in the child-care sector.