Alberta holds out as 8 other provinces sign on to receive $37B under new federal child-care deal

Eight provinces and three territories have signed on to a new federal child-care agreement that will see them receive nearly $37 billion in funding from Ottawa from 2026 through to 2031, while Alberta and Saskatchewan have not.

Alberta estimates its current agreement with the federal government, which is set to expire on April 1, 2026, has already reduced child-care fees for parents by 80 per cent.

The agreement also includes a wage top-up for workers and has included grants to operators who open new child-care spaces. The province estimates it has hired 10,000 additional early-childhood educators and created more than 31,000 new child-care spaces since the agreement began in 2021.

Last month, Alberta rejected an offer from the federal government to extend the agreement through to 2031, saying Ottawa wasn't offering enough money and provided too short of a deadline to sign on.

The federal offer included an extension of the current agreement for five years beyond 2026, with annual three-per-cent increases in funding, starting in 2027.

The Government of Alberta argues that's not enough to sustain the province's child-care system and estimates it would result in a cumulative shortfall of billions of dollars by 2031.

"I'm not sure that provinces and territories [that have signed on] have considered the financial and operational implications of the agreement the way that Alberta has," Jobs, Economy and Trade Minister Matt Jones told CBC News on Thursday.

"For example, the federal offer to Alberta, which was $6 billion over five years, will require Alberta to put in an additional $5 billion over the next five years, which as you can appreciate is a substantial amount of taxpayer money at a time when we're facing significant pressures in health care, education and, frankly, a trade war."

He said the federal government has historically "put in the lion's share" of the funding under Alberta's child-care agreement, which he described as "appropriate, as this was a national program."

"But even this year [under the existing agreement], the Alberta government will have to put in approximately $720 million next to the federal government's roughly $1.2 billion," Jones said.

He added that, "if sufficient funding and the required flexibility are not provided, Alberta's government will be unable to proceed with a renewal and will be forced to transition out of what is, and will be, an unsustainable program."

Jones said Alberta's other concerns — outlined last month in a letter to Jenna Sudds, the federal minister of families, children and social development — still stand, as well.

In that letter, which Jones posted on social media, he said Alberta wants a new deal that steers away from the previous agreement's goal of universal $10-per-day child care, which he described as "unsustainable and not supporting the families who need it most."

"Alberta's desire is to have a fully income-tested system where child care is most affordable for Alberta's lowest-income families, with targeted government funding also utilized to reduce the cost of child care progressively based on household income," he wrote.

Sudds responded though a spokesperson.

"If Minister Jones wants to walk away from a program that helps over 100,000 Alberta families save up to $11,000 per child every year, that's on him. But he can look parents in the eye and explain why he's throwing their savings and child-care stability out the window," her press secretary, Geneviève Lemaire, told CBC News at the time.

"While he's at it, Minister Jones should also explain to parents in Alberta why his government has decided to be the only province to cut subsidies to low-income families."

Disagreement over for-profit child care

Jones also said Alberta wants to move away from another aspect of the deal it signed in 2021, in which the province agreed to use the federal funds to "prioritize not-for-profit" daycare expansion.

The text of that agreement reads: "Alberta commits to creating a minimum of 42,500 not-for-profit spaces over the next five years."

The federal government noted the terms of the deal also say Alberta "may create up to 26,200 for-profit spaces," for a target of 68,700 new spaces, in total, by the end of the agreement in 2026.

So far, however, the province is not on pace to reach the commitment on non-profit spaces or the overall space-creation goal.

Alberta Premier Danielle Smith also said Thursday the province doesn't want to sign on to the new child-care deal because of the "federal ideology" behind it.

"They don't like the private sector," Smith said on CBC's Power & Politics.

"They've been trying to squeeze them out. They've come up with a deal, unfortunately, that has made it very, very difficult for our private operators. We now have 100,000 people on a waiting list. They've got restrictions on us being able to expand those private operators. And as long as that's the position of the government, I'm afraid we just can't work a deal with them."

Smith said the province isn't giving up on a new deal with the federal government, but it won't happen until Prime Minister Justin Trudeau is replaced by the next federal Liberal leader — at the earliest.

"I imagine we'll be very quickly into a general election," Smith said. "And it may well be that we have to wait for the mandate of the next prime minister to be able to start those negotiations, whether it's a Liberal government or a Conservative government. But we're not going to be signing one right now."

What other provinces agreed to

The deals signed by the other eight provinces and three territories include the same three-per-cent funding escalation that had been offered to Alberta.

They are now set to receive a total of $36.8 billion in five years, broken down as follows:

• Ontario: $16.77 billion.
• Quebec: $9.83 billion.
• British Columbia: $5.38 billion.
• Manitoba: $1.9 billion.
• Nova Scotia: $1.05 billion.
• New Brunswick: $876 million.
• Newfoundland and Labrador: $503 million. 
• Prince Edward Island: $199 million.
• Nunavut: $109 million.
• Northwest Territories: $80 million.
• Yukon: $74 million.

Trudeau said Thursday, just days before he is set to leave office, that these deals will ensure the long-term viability of one of his government's flagship policies.

"I am here to tell you all that: we got you," Trudeau said. "Even in the very last days of this government, we will not let Canadians down today and long into the future."

"In the past few weeks, we have been working with our provincial and territorial partners to make sure that families can rely on this system, not just for years to come, but will allow this to lock in, to become something that no government, a year from now, five years from now, 20 years from now, could ever go back on," the prime minister said in Ottawa.

He described child care as a "national building" program and said the agreements will "make sure that more Canadians over the coming years understand that child care is a foundational building block of what it means to be Canadian, like health care, social programs or cheering at a Canadian anthem."