Alberta asks daycares to not raise fees in 2023, offers lump-sum cash in return

The Alberta government is asking private daycare operators who receive subsidies to not raise their fees for the next 12 months in exchange for three months of compensation now — and a promise that a new funding deal will come later.

But the head of a daycare advocacy organization says the terms of the offer are vague, the compensation formula is not reflective of reality, and daycare operators would likely lose money by signing on.

It's the latest twist in the ongoing back-and-forth between the federal government, the provincial government and private daycare operators over a funding program that is meant to eventually bring child-care costs down to $10 per day.

So far, the program has cut child-care costs in half for many Alberta parents — but not all daycare spaces currently qualify.

The initial phase of the agreement limited the number of for-profit daycare spaces that would be subsidized. Daycares that opened or expanded after the limit was reached do not get the government funding.

The province has said subsidies will be extended to all daycares in the next phase of the agreement, which is due to start April 1.

A draft plan for that next phase was due to be completed by Dec. 31, but that deadline was missed and negotiations between provincial and federal officials are ongoing.

Daycares that do qualify for subsidies have already agreed to a three-per-cent cap on fee increases in 2023, but now the province is asking them to not raise fees at all.

As compensation, the province is offering a lump-sum payment equivalent to a three-per-cent increase for each licensed, subsidized space for the months of January, February and March.

To get that money, daycare operators must agree to not raise their fees for the entirety of 2023 (and be subject to audits to ensure they are complying.)

Krystal Churcher believes her daycare — and many others — would lose money by accepting the offer.

Details of the compensation

There are three major problems with the offer, in Churcher's view.

First, she says, it's not fair to ask operators to forgo fee increases for a full year while receiving only three months of compensation and not knowing what the funding deal will look like come April.

Second, she believes the compensation will fall short because of the per-licensed-space method of calculation. She says daycares typically have more clients than full-time spaces and fill those spaces with a rotation of children who attend part-time. As a result, she believes the lump sum would work out to less than daycares would make by actually raising fees by three per cent.

And third, she says the three-per-cent cap — which was part of the agreement originally signed in November 2021 — has become burdensome, in itself, given the much higher rate of inflation over the past year.

"It's really hard to stay viable and provide quality centres and quality care for families when you can't increase your fees to meet at least the inflation levels," said Churcher, who runs a daycare in Fort McMurray and heads the Association of Alberta Childcare Entrepreneurs.

The provincial government didn't directly answer questions about these concerns, but in a statement said it "remains fully committed to increasing access to an affordable, inclusive, quality child-care system with private and not-for profit options."

"During this time of high inflation, we are providing nearly $33 million to child-care operators to help them with rising costs in order to keep parent fees stable," Chinenye Anokwuru, press secretary to Alberta Children's Services Minister Mickey Amery, said in an email.

"The Alberta government remains fully committed to increasing the affordability and availability of child care for Alberta families, and the new Affordability Grant Agreement starting in April 2023 will maintain this commitment."

Daycare operators were provided with details of the offer Thursday and have until Feb. 15 to decide if they want to take it.

2-tier funding still an issue

Christine Pasmore runs Wee Care Daycare and Drop-In Centre in Grande Prairie, a busy child-care centre with a long waiting list — 462 kids, at last count.

She said she hasn't had time to even read the province's latest offer, let alone parse the details.

She's still struggling to explain to some parents why she has to charge them $65 per day while others are paying as little as $13 per day to enrol their child at her facility.

Wee Care has 112 spaces but only 82 qualify for the subsidy. The other 30 spaces, which Pasmore opened in October to help meet demand, do not currently receive government funding.

"It's kind of a heartbreaking situation to be in," she said. "A lot of parents can't afford to pay that amount, so they're just left in the dust and they're not able to access daycare anywhere."

Eric Imbeau is on the waiting list for a full-time space at Wee Care and has been unable to find any other licensed daycare spaces in Grande Prairie.

To care for their 1½-year-old son, he and his wife rely on a combination of a day home, which isn't always available, and the drop-in service at Wee Care, for which they must pay the full, unsubsidized fee.

"It's pretty pricey," he said.

Many days, they have no other choice, as his wife works full-time and his oilfield job can take him away at any time.

"I'm on call 24/7, so when the phone rings, I have to go."