By Kerry McCuaig, University of Toronto; Michal Perlman, University of Toronto; Nina Howe, Concordia University, and Petr Varmuza, University of Toronto
Five years into Canada’s $10-a-day child care plan, affordability has improved dramatically for families fortunate enough to have a space. However, the families who need care the most are being left behind.
Both the auditor general of Canada and the auditor general of Ontario have warned that the Canada-Wide Early Learning and Child Care (CWELCC) program, while successful in lowering fees, is failing to meet its other commitments — inclusion, quality and equitable access.
The $10-a-day plan was meant to be a nation-building project — one that gives every child, regardless of background, an equal start in life.
But affordability without equity is a hollow victory. If governments fail to correct course, inequities will harden into the system’s design, and the intergenerational cycle of poverty will deepen.
Subsidies down
Low-income families have traditionally been eligible for government subsidies to help pay for care. For the poorest families, the subsidy can cover the entire cost.
Yet since the program began, the number of children receiving subsidies has fallen sharply — Ontario’s auditor general reported a 31 per cent decline, and in Toronto, subsidy use has dropped below 80 per cent
Each time fees fall, more families want low-cost care. But the number of spaces hasn’t kept pace.
Competition intensifies — and more affluent families, who have greater networks and resources, move to the front of the line.
This is a well-documented social pattern known as the Matthew effect: advantage begets more advantage.
The problem is compounded by the fact that CWELCC-funded programs are not required to enrol families receiving subsidies.
By mid-2025, according to reports published on the City of Toronto open data portal, roughly 30 per cent of Toronto’s CWELCC programs — representing over one-third of all infant-to-preschool spaces — had no contract with the city to serve subsidized children.
Meanwhile, more than 16,500 children in Toronto are waitlisted for a space, while nearly one in three publicly funded programs deny them access.
A quiet incentive to underspend
Funding structures further entrench inequity. Fee subsidies are paid from provincial budgets, while CWELCC affordability funding comes from the federal government.
When families stop using subsidies — because spaces are unavailable or eligibility rules too restrictive — provinces and territories save money, while still benefiting politically from federal investments that make care appear more affordable.
Some jurisdictions don’t bother with subtlety: Saskatchewan, Alberta and the Northwest Territories have eliminated subsidy programs altogether.
A fragile truce on funding
On Nov. 10, Ontario announced a one-year extension of its federal child-care deal, maintaining current funding terms while a longer agreement is negotiated. The extension preserves the current fee — roughly $22 a day — but does nothing to address the inequities embedded in the system.
The CWELCC framework rests on five pillars: affordability, access, quality, inclusion and data accountability. In practice, only affordability has advanced.
Even if new funding materialized, money alone wouldn’t fix the problem. Federal and provincial governments control the purse strings, but in Ontario, regional policymakers already have the tools — and the responsibility — to act.
They allocate subsidies, set local priorities and conduct annual program reviews. With stronger direction, they could require all CWELCC-funded programs — both for-profit and non-profit — to:
- Accept subsidized children as a condition of continued funding;
- Meet quality standards, such as those in Toronto’s Assessment for Quality Improvement system; and
- Set targets for equitable access based on local demographics.
In areas identified as child-care deserts, where demand far outstrips supply, service managers could also give priority to neighbourhood families until new facilities are built.
Danger of unchecked for-profit expansion
Equity cannot be achieved by giving for-profit operators a free hand — yet that’s exactly what’s happening across several provinces.
For-profit growth has exceeded the limits set in child-care agreements. These operators naturally expand where profits are fastest — in higher-income communities. The result: rapid growth in affluent areas and stagnation in places where families most need affordable, high-quality care.
Ontario’s auditor general flagged this trend, finding that nearly half of all new licensed spaces were in for-profit centres — despite federal and provincial commitments to prioritize non-profit and public expansion.
Unfettered commercial growth not only weakens public accountability but also deepens the inequities the federal child-care program was meant to eliminate.
A system designed to build a public good cannot rely on private profit as its engine.
Redirect the savings
The one-year CWELCC extension gives Ontario breathing room to get this right. By our calculations, holding the line at a $22 daily fee — rather than dropping to the promised $12 — would free up roughly $100 million in Toronto alone.
Those funds could expand care in low-income neighbourhoods, strengthen program quality, stabilize the educator workforce and rein in for-profit expansion.
Contrary to political fears, this would not cause undue hardship for middle-income families. After applying existing federal and provincial tax benefits, the median Ontario family with two children in care pays approximately $15 per child per day, which is close to the $12 goal.
The greater hardship lies with families who still can’t find a space at all.
Beyond subsidies: making access universal
Expanding subsidies won’t fix structural inequality. Under current rules, parents must prove they are employed, in school or meeting specific “activity” requirements to qualify.
These conditions exclude children whose parents are outside the labour market — precisely those who could benefit most from early education.
These rules should be scrapped. Every child deserves access to quality care, regardless of their parents’ work status.
A choice about values
Over time, Canada should move toward a universal, income-based model — similar to the Canada Child Benefit — where all children qualify for early learning and fees are scaled to family income. Fees based on the family’s ability to pay are well-established in Nordic countries.
This would replace the costly and complex patchwork of subsidies and flat fees with a simpler and fairer system.
The next phase of Canada’s early learning and child-care plan must put equity at its centre — not as an afterthought, but as the measure of success.
Canada has already proven it can make child care affordable. Now it must make it fair.
Kerry McCuaig, Fellow in Early Childhood Policy, Atkinson Centre, Ontario Institute for Studies in Education, University of Toronto; Michal Perlman, Professor of Applied Psychology and Human Development, University of Toronto; Nina Howe, Professor of Early Childhood and Elementary Education, Research Chair in Early Childhood Development and Education, Concordia University, and Petr Varmuza, Assistant Researcher, Perlman Lab, Ontario Institute for the Studies of Education, University of Toronto
This article is republished from The Conversation under a Creative Commons license. Read the original article.
