Child-care costs could rise for some Alberta parents as daycares consider leaving fee support program

Some daycare operators in the province are considering opting out of the Alberta Affordability Grant for child-care programs, which is concerning to parents who could see their payments skyrocket in the new year as a result.

The program is a joint arrangement between the federal and provincial governments and is targeting $10-a-day daycare by 2026, dependent on family incomes and other factors.

Under the program, federal funding limits child-care fees for parents by providing grants to operators who are later reimbursed for costs based on a fixed rate set out by the provincial government.

Come Jan. 1, grants to operators are increasing per space which means parents will pay less, however, there are challenges for operators with the funding model forcing some to consider leaving.

Scott Quan, a father of three, received a letter earlier this month from Sunny South Day Care Centre in Lethbridge, Alta., informing parents that it was considering leaving the program come January.

“A lot of uncertainty, a lot of stress just on what is going to happen to us in the future and what we have to do employment-wise,” he says.

• Get local, live and breaking news right to your email inbox. Sign up for our daily newsletter

According to the letter from the owners, Tobi Horon and Bailee Procee, the new contract would be “financially devastating.”

“Transparently, this new agreement presents terms that threaten the very existence of our program,” the letter reads.

“As a result, we are forced to anticipate the very real possibility that we may not be able to sign into this next phase of the grant, which would mean a need to charge parents full, pre-grant fees, effective February.”

For Quan’s family, that translates to a major increase in fees.

“From $600 a month to $3,000 a month which would greatly impact how we parent and how we are able to work,” he says.

“It would boil down to if this grant was not available through our daycare, one of our paychecks would basically be going strictly to daycare so it’s not just financially feasible for us.”

The Association of Alberta Childcare Entrepreneurs, representing some 20,000 daycares across the province, says operators are struggling with several factors in the contract.

“Operators are frustrated, they’re fearful, they’re stressed out. The impact on their businesses, their investments, their personal health the last two years has been a lot,” says association chair Krystal Churcher.

She owns a child-care centre in Fort McMurray and runs another out of a school in Calgary, and says the scheduling of payments also poses a major challenge.

Under the program, parents pay around $15 a day per child at the start of the month and operators submit the claims and are later reimbursed from the grant funding from the government.

“The problem that we’re having is that money isn’t instantly refunded by the government it takes 40 to 45 days,” she says.

“All of that income then is not coming back to your childcare operator for 40 or 45 days. It’s really difficult to cover the overhead of a childcare centre like your rent, your wages, your insurances without access to your revenue.”

The provincial government has provided funding to operators that amounts to a three per cent increase in program fees to help cover increased costs.

However, Churcher says operators are also limited with what they can use the funding for and they don’t take inflation into account.

“We’re in a private business situation that is completely government-controlled and regulated without having engagement over that or consultation or input. It’s very frustrating and I think people are starting to see the impacts the loss of control over the decisions they have,” she says.

“Over the last two years, we’ve seen record high inflation, we’ve seen utility costs skyrocketing, food costs are through the roof. If parents are struggling at home with the cost of groceries, imagine a child-care centre with a food program that hasn’t been able to increase their fees for two years.”

Operators, like Sunny South Day Care Centre, are now considering opting out of the program or making major cutbacks, which according to its letter to parents includes cancelling meal programs and field trips, cutting salaries or laying off staff, or hiring less experienced educators.

The new contract is set to take effect Jan. 1, 2024, with a deadline for operators to sign on by Jan. 31, 2024, leaving operators little time to make difficult choices.

“The biggest issue you’re going to see across the province over the next 15 months is financially, centres are not going to be able to stay open under this program,” says Churcher.

The provincial government allocated $32.8 million in 2023 to operators through a one-time grant to help with inflationary and administrative costs.

There are also wage top-ups, infant care incentives and subsidies for eligible families available.

“Alberta’s government is focused on ensuring life remains affordable for families and businesses. Affordable child care creates opportunities, keeping money in the pockets of parents,” says Ashli Barrett, press secretary for the Minister of Children and Family Services.

“Alberta’s government is also offering a one-time grant early next year for operators who submitted their financial reporting for the 2022-23 Affordability Grant that ended on March 31, 2022. This grant will help cover some of the costs of associated with financial reporting requirements.”

Parents looking for information or have concerns about child-care programs in Alberta can call the Child Care Connect line at 1-844-5165 or email [e-mail].