The problems afflicting the federal-provincial governments’ new childcare system were all very predictable. The question now is what can or should they do to fix it.
The objectives of the “Canada-wide Early Learning and Childcare” program were worthy – charge only $10 a day so that more families, particularly low-income families could access it; thereby helping more parents, particularly women, enter or stay in the workforce; thereby supporting more economic growth.
Unfortunately, it hasn’t worked out that way.
In 2021, Chrystia Freeland, former finance minister in the Justin Trudeau government, introduced a $30-billion funding pot to create 250,000 high quality spaces by March 2026. According to the federal government’s own reporting, however, less than half of those spaces materialized.
Not surprisingly, lower prices meant higher demand for spaces, outpacing provincial governments’ ability to make new spaces available. There continues to be a significant shortage of professional childcare workers despite attempts to expand training spots and improve compensation. Federal restrictions on the number of for-profit daycare spots meant many existing facilities could not be included in the program, exacerbating shortages.
Overall, waiting lists have ballooned. In 2025, according to Statistics Canada, nearly a third of parents with a child under six reported that they were on a waiting list, up from just over a quarter two years earlier.
And perhaps most discouraging for program advocates, lower prices caused more middle and higher-income families to flood into the new system, crowding out those more in need.
Ontario’s Auditor General estimated that childcare enrollment among families receiving subsidies had decreased 31 percent, since 2019. In the words of the Globe and Mail, “Ottawa’s price caps have turned what used to be a crisis of affordability into a crisis of availability.”
To top it all off, the C.D. Howe Institute estimated that any added economic growth from getting more women into the workforce – one of the major goals – was “modest” at best. Labour force participation of women in the target group only went up by 3.7 percent.
Uncertainty over funding from Ottawa also undermined the sector’s stability. The federal government had been warned from the beginning that its initial investment would not be sufficient to meet demand but this year’s spring budget did not respond.
Ontario had been nervous about entering into a jointly funded federal-provincial program in the first place after having experienced many instances where the financial rug was pulled out from under it when Ottawa’s spending priorities abruptly changed, leaving the province holding the bag. It feared a repeat. It also objected to the federal government’s attempt to limit funding to non-profit centres.
Ottawa did finally come through last month with an additional $5.4 billion over two years to hopefully stabilize the program. But while helpful, several provinces, including Ontario, will still not be able to meet the $10 a day target without more financial support.
Quality childcare is still a critical support in our economy, particularly for low-income families. So what should be done?
Increased funding will continue to be part of the solution, but given federal and provincial financial pressures, it cannot be the only answer.
The answer – in the Globe’s words, “stop trying to create a universal-one-size-fits-all childcare system that is nearly free for everyone.”
The federal and provincial ministers responsible for childcare need to put their heads together to find additional, non-partisan solutions.
For example, back off the $10 a day fee and use the extra room to direct more revenue to increase training spaces for early childcare workers and raise their compensation. Target subsidies to those families most in need. Introduce an income-tested, refundable tax credit similar to Quebec’s model to help other families afford care. Broaden funding eligibility to include more for-profit centres. Just to name a few.
There are solutions. We have come this far. Let’s find a way.
Janet Ecker is a former Ontario Finance Minister, Minister of Education, Minister of Community and Social Services and Government House Leader in the governments of Premier Mike Harris and Premier Ernie Eves. After her political career, she served as the founding CEO of the Toronto Financial Services Alliance, a public-private partnership dedicated to building Toronto region into an international financial centre. She currently sits on a number of corporate and non-profit boards, agencies and advisory committees.
Ms. Ecker received the Order of Canada for her public service contributions and was recognized as one of the “Most Influential People in the World’s Financial Centres” by Financial Centres International. She also received a “Canada’s Most Powerful Women: Top 100 Award” from the Women’s Executive Network and the Richard Ivey School of Business, among other awards. She is also one of the founders of Equal Voice, a national, multi-partisan organization working to elect more women.
