What goes back comes when it comes to for-profit child care

As someone who has advocated for universal, high-quality child care for over 40 years, I am struck by the similarity of some of today’s debates to those of the past. We’re still debating what role child care companies should play in a publicly funded child care system, how much profit there is for day care owners, whether they’re “women women entrepreneurs” and the ethics of big business… box lobbying in favor of profit in healthcare services.

The federal government’s recent commitment to build a pan-Canadian, not-for-profit early learning and child care system, supported by substantial long-term federal funding, has intensified the debate and raised two central questions: first, what should can governments ensure that public funds are not used to subsidize and increase the profit margin of existing for-profit daycares? Second, how does Canada avoid the rapid growth of for-profit care that has occurred in other countries when public funding with few limits was available? These two elements are essential in determining whether a universal, high quality and equitable child care system will become a reality for Canadians.

It should be noted that, thanks in large part to COVID-19, the policy and policy environment for child care in Canada is quite different than it has been in the past, with many more issues . The most recent round of the for-profit child care debate was sparked by the rollout of a long-awaited promise to build a quality child care system across Canada, backed by a funding commitment very important long-term audience.

Child care services across Canada are now eagerly awaiting substantial public funding for the first time. New federal funding transferred to provinces/territories is expected to reach at least $9.2 billion per year by 2025-26, with each jurisdiction developing its own system based on common principles, bilateral agreements and action plans developed with Ottawa. Importantly, the first-ever federal commitment to keep child care in the nonprofit sphere, set out in 2021 federal law budgetis included in federal/provincial/territorial agreements.

Added to this important and historic pan-Canadian initiative is a second relevant development. Over the past two decades or so, child care – along with other care services such as health care and long-term care, as well as housing – has become a desirable acquisition for “financialization” companies. Thus, private equity firms are now aggressively seeking to buy out centers as “profitable assets”. Dutch newspaper Financial Dagblad observed that: “Investors are tightening their grip on childcare” as large international companies buy up chains or small-scale childcare centers, so some childcare chains are now mammoth At scale. The fact that donor profitability is, in many cases, largely guaranteed by public funding and that risk capital moves easily between countries is well documented. We never imagined how profoundly this phenomenon affected the delivery of child care services in some countries when Canadian advocates were content to deal with the incursion of large American child care corporations. like KinderCare in the 1970s or even ABC Learning in Australia in the 1990s.

A third important factor relevant to the current debate about for-profit child care is the twenty or thirty years of lessons learned from research and experience about best and worst practices in child care policy. . Childcare experts can now cite extensive international research to highlight the pitfalls of relying on the for-profit sector, which is demonstrably less likely to provide affordable, accessible, quality and equitable services, pay decent wages staff or to offer affordable parental fees as benefits. prime. Today there is solid knowledge on what contributes to the worst childcare situations: childcare provision in which parents’ fees are high, educators’ salaries and recognition are low, and the quality is questionable. These situations have developed mainly in jurisdictions using market models of childcare with weak public management of funding. This means that children benefit from poor quality child care or that parents who are “less profitable” miss out on services, while some or a large part of the public financing of child care turns into profits, leaving parents, child care staff, children and taxpayers the losers. It is difficult to say that this is a efficient way spend public money.

With this in mind, it is easy to understand why the current Canadian campaign launched by the for-profit sector has focused on securing commitments from the provincial government to reduce public accountability and public management when the first stage of new, more affordable child care system is lifting off the ground. In Alberta, daycare owners demanded more “flexibility on fee increases” (keeping parent fee increases at 3% is ‘intrusive’) while ‘private industry is good for parents and children as competition drives quality’. The message of the Ontario campaign – in conjunction with an international public relations firm – is that women entrepreneurs who own small businesses are “sounding the alarm…about the level of government micromanagement currently proposed as a condition of their continued participation. to the $10/day System”. This campaign attracted public and media attention by reporting that for-profit operators (which provide about 30% of full-time child care in Ontario) would refuse to join the new child care program, depriving thus parents of promised fee reductions or even their childcare space, as the threat of center closures looms.

In response, the Ontario government “relaxed the operator worries about bureaucratic incursions into his businessrewriting the guidelines made public when Ontario joined the federal program last spring. Rather than strengthening the cost control framework as outlined in its OK with Ottawa, the Ontario government eliminated elements originally intended to strengthen accountability for federal funds. Changes include: no cap on profits, not requiring an audit, reducing the oversight role of municipalities (which are mandated local service managers) to determine “reasonable” mortgage and rental costs. In addition, the use of center quality assessment tools by municipalities to determine public funding discretion has been prohibited by the provincial government.

This accountability deficit goes against the spirit of the pan-Canadian agreement to build an accessible, affordable and high-quality child care system, one of the elements of which, while public funding of growing exponentially, must include accountability for public funds. But accountability doesn’t just apply to nonprofit and for-profit daycares on the ground. Accountability is also an obligation that must extend to provinces and territories, each of which has negotiated an agreement and action plan detailing the policies and delivery conditions that shape their child care system by evolution for which they will receive substantial new federal funding.

Overall, the available data tells us that boosting the for-profit child care sector – both by accelerating the realization of profits from public funds and by continuing to support the expansion of its supply as demand increases – will only continue the failed child care market that Canada has always known. This will reduce the ability to take advantage of the potential economic and social benefits of early learning and child care or meet the pan-Canadian principles established for the new program – affordability, accessibility, quality and inclusion.

The formula for a quality, accessible and equitable child care system is not found in for-profit child care. For-profit owners’ demands for less liability, more profit and expansion must be resisted. At the same time, governments must develop and implement proactive plans to expand public and nonprofit services. This will require governments to take action to support and develop a skilled child care workforce, which is the cornerstone of a quality child care system now and in the future.

Ultimately, how the issue of for-profit child care is addressed will determine whether Canada builds a child care system capable of achieving the ambitious goals shared by so many.

Editor’s Note: This post originally appeared on Child Care Canada website.

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