Ontario parents hoping for affordable child care may face challenges ahead. Recently, Ontario Education Minister Paul Calandra announced $695 million in new federal funding aimed at maintaining the current average daily child-care rate of $19 until the end of next year. However, this amount is insufficient to expand capacity or lower prices significantly.

Calandra expressed concerns about the feasibility of achieving the federal government's $10-a-day child-care program. He stated, "I don’t think, frankly, that we will be in a position to meet the $10-a-day program as set up by the federal government unless they are willing to step up to the plate and add the money that is required to get us to $10 a day."

The funding shortfall is not unexpected. When former Prime Minister Justin Trudeau introduced the $10-a-day plan in 2021, many anticipated that the initiative would struggle to meet its ambitious goals. The Ontario government was notably the last province to sign onto the deal, indicating early skepticism about its viability.

A recent report from Ontario Auditor General Shelley Spence highlighted that the reduction in child-care fees has led to increased demand for licensed child care. However, the supply has not kept pace. By the end of 2024, the province had only added 36,000 new spaces under the program, falling short of the 48,000 target. The Financial Accountability Office of Ontario estimates that the federal plan will be short by approximately 220,000 spaces to meet demand.

Interestingly, the report also found that enrollment among lower-income families has decreased by 31 percent compared to 2019, despite their eligibility for additional fee subsidies. This decline suggests that these families are struggling to secure limited spaces due to increased competition from new parents entering the licensed child-care system.

Negotiations between Ontario and the federal government regarding the extension of the child-care deal until 2031 have encountered obstacles, primarily related to funding. The federal government has proposed $16.8 billion over five years to renew the program, but Ontario officials claim they need an additional $2 billion annually to meet expansion targets and implement the $10-a-day rate.

The latest federal budget has committed to maintaining current child-care funding levels rather than expanding them. Additionally, Ontario is advocating for the inclusion of more for-profit child-care operators in the $10 program, as the original agreement limited their participation to 30 percent. This restriction has left many spaces unfilled, as some for-profit operators do not align with the federal government's ideological preferences.

Currently, Ontario allocates $5.8 billion annually to child care, which includes subsidies, tax credits, and the costs associated with junior kindergarten. The provincial government appears reluctant to subsidize the federal program further.

Despite the challenges, there is potential funding available for the $10-a-day child-care initiative. Advocates suggest that the federal government could reassess its approach to child-care subsidies, particularly through the Canada Child Benefit (CCB). Originally introduced by former Prime Minister Stephen Harper in 2006, the CCB was designed to assist with child-care expenses. It provides up to $7,997 per year for each child under six and $6,748 for those aged six to 17, with amounts adjusted for higher-income families. The CCB represents a significant financial commitment, and its restructuring could play a crucial role in supporting affordable child care in Ontario.