Last month in this space I wrote about the importance of accessing primary healthcare to business and how we need to rethink our views in general about what is a ‘business’ issue and what is a ‘social’ issue. It is increasingly clear that many of our current challenges intersect – in addition to healthcare, consider the availability of housing or public safety and the topic of this piece – childcare.
Back in Budget 2021, the federal government announced a $30 billion investment to support the expansion of childcare spaces throughout the country – including the much-lauded $10 per day goal. The issues started there with that messaging from the federal government – it created an expectation that everyone would eventually have access to $10 per day daycare. That is not the case – the money is finite while our population grows, and the actual target is an average of $10 per day – meaning some will pay less than that and others will pay more. Daycare operators have reported that this is not understood, and parents are taking out their frustrations on them and their staff members.
The intention of making childcare more accessible was welcomed by the business community – it’s no secret that the workforce is the biggest issue facing the economy and providing support to allow more people to enter the workforce was and is a worthwhile goal. It was up to each province to negotiate a deal with the federal government that suited their needs and New Brunswick signed on to the agreement in December 2021. At that time, we were pleased that the provincial government did not follow suit with Nova Scotia and create an essentially non-profit-only model – but, as is often the case, the devil is in the details, and we are now seeing the effects of those details.
With the federal agreement in place, the provincial government got to work on implementing the deal in the province through regulatory and process changes. The result was Policy 901 – which took effect on 31 January 2023 and a request for proposals was published on the same day.
Daycare operators in the province immediately identified many issues with Policy 901 and we have been helping them to get the message across to government about them ever since, including meetings at the highest levels with former Minister Cardy and deputy ministers. These issues must be addressed quickly, or we will continue to lose out on growth opportunities. When trying to attract employees and investment to the area, accessibility of childcare is a top-of-mind concern for many. As one example – our chamber is regularly contacted by the health authority looking for assistance in securing childcare for physicians they are trying to recruit. We of course do our best, but there is little that can be done as the spots just aren’t available – due in part to Policy 901.
One key issue is that operators have lost the ability to reallocate spaces between preschool and afterschool care based on local needs and the changing marketplace. Operators were offered a one-time chance to reallocate spaces and they have been locked in ever since – this means that if a community increases its need for preschool spaces and an operator otherwise has capacity to accept those children, they can’t if their spaces are currently designated for afterschool kids. The pandemic had an effect here too as some operators in 2021 reallocated spaces from preschool to afterschool due to lower demand and are now stuck with afterschool spaces when changing to preschool spaces could serve more of the community. In fact, on Fredericton’s northside there is currently a vacant preschool location that could be opened tomorrow but remains empty because of this reallocation issue. When we consider how often we hear about individuals not being able to enter or re-enter the workforce (commonly after maternity leave), this is one of the more frustrating instances of policy creating red tape in recent memory.
Another critical hinderance is the designation of spaces throughout the province based on a government algorithm that operators report does not accurately reflect needs. Operators have essentially lost the ability to choose locations based on their own expertise and actual waiting lists – despite taking on 100% of the risk of expanding and opening a new location – which we desperately need more of.
Many families do not understand that most current spaces are “designated” – which equates to “subsidized” by the provincial government and Policy 901 will create fewer of these designated spaces in the future. This will essentially create a two-tiered system in the province – a subsidized stream with parents paying much less and a non-subsidized stream that operators estimate will cost those parents three times as much, which gets us further away from the original intent of the program.
Related to these other issues – operators are also asking for a one-, three- and five-year financial plan to ensure sustainable operations within the proposed funding model. The ability to plan over several years is fundamental to businesses and operators are currently working in an ad hoc system that does not have sufficient predictability. Ultimately it will be families and, in turn, our economy that will pay the price.
Private operators are being sandwiched into a government model that is more suitable for a not-for-profit world while nearly 80% of childcare operations are privately owned centres. The provincial government dictates how much centres can charge for designated (I.e. subsidized spaces) – essentially controlling their revenue stream. At the same time, government also controls wages – which has increased significantly over the previous two years with two wage increases without corresponding support to operators. This means that operators have had a significant increase to their staffing costs without the ability to increase the revenue.
Officials within government are aware of these issues that must be fixed, and we are hopeful that the speed at which this happens is reflectively of the urgency of the situation. We encourage the government to listen to the concerns of operators who are seeing firsthand the deficiencies of Policy 901 and for our elected officials to make this a key priority.
Krista Ross is CEO of the Fredericton Chamber of Commerce, a nationally accredited organization with more than 1,000 members, is an active business organization engaged in policy development and advocacy that affects the competitiveness of our members and the Canadian business environment. The Chamber’s vision is ‘Stronger Community Through Business Prosperity’.
