(Promised) Changes to child care in New Brunswick: The big picture and the fine print

Earlier this month, the Government of New Brunswick released an action plan that promises significant changes to infant and preschool child care in the province.

The plan hinges on Early Learning Centres, a new provincial designation that daycares will be able to apply for. In exchange for adhering to the policies and practices that come with this designation, daycares will have access to increased funding — as will many families who send their children to these Early Learning Centres. Existing funding programs will remain in place for daycares that do not become Early Learning Centres and the families who use them.

Many of the announced changes are based on funding formulas and sector-specific operational concerns. It is complex information, particularly for those who do not work within or advocate for the sector. In response, this post explains what the biggest changes are, what the election means for the plan’s rollout, and what the New Brunswick Women’s Council is going to be keeping an eye on.

If you’d like a primer on why child care is a women’s equality issue and challenging to address before diving into this post, read this article.

Action plan on child care

First off, it should be noted that the government’s action plan addresses child care solely for infants and preschoolers. This is because the action plan is tied to a funding agreement with the federal government that does not include before or afterschool care for school age children.

As mentioned above, the plan is based on the new Early Learning Centre designation. Daycares applying for the designation will be assessed against an eligibility criteria and must agree to abide by additional policies. Government’s goal is for every daycare in the province to become an Early Learning Centre.

Designated daycares will have access to new funds, including ongoing operating funds on a per space, per day basis. Currently, the only government funding they can apply for is to support wage top ups and the creation of new rural, infant, extended hours, and minority language child care spaces (these funds will continue to exist and be available to all daycares).

For financial support to families, the action plan uses the same type of subsidy model as the existing Daycare Assistance Program but with enhancements. Both programs provide subsidies on a sliding scale determined by annual family income: a lower income means a larger subsidy, a higher income means a smaller subsidy.

The Early Learning Centre’s sliding scale subsidy program doesn’t have a firm income cut off for eligibility and offers more generous rates. Subsidies will be 100% for families with gross incomes of $37 500 or less a year; for families above that level, subsidies will go up to $36.90/day for infants and $31.20/day for preschoolers depending on gross annual family income. Under the Daycare Assistance Program, no family is guaranteed free daycare and maximum subsidy amounts are $28.50/day for infants and $24.25/day for preschoolers based on net annual family income.

Government has also committed that no family will pay more than 20% of its annual gross income for infant and preschool child care in Early Learning Centres — anything above that is covered by government. The existing Daycare Assistance Program does not include a similar cap.

While government has not provided a grid (like this grid for the Daycare Assistance Program) for the Early Learning Centre subsidy rates, it has shared comparative examples of support under both subsidy programs. Every example scenario indicates that families will see higher subsidies under the Early Learning Centre.

Election 2018

Government’s action plan stems from a bilateral funding agreement with the federal government that extends to 2020.

While government has already identified the first two Early Learning Centres that will have access to increased funding starting in March 2018, provincial rollout of the plan will happen between September 2018 and March 2019 — during and immediately after the provincial election. Should the post-election government want to change details of the action plan, the bilateral agreement would need to be amended; this would require the consent of the federal government.

What should stay on the radar:

Wages for workers in the child care sector

Government has announced that it intends to increase wages for trained staff to $19/hour over four years starting in 2019–2020. The increases will be available to workers in all daycares and will also apply to those working with school age children.

While we commend government for recognizing that wages must be addressed in order to move child care forward, we have to point out that the timeline and increases will ensure that five fiscal years from now early learning and child care educators in New Brunswick will finally have wages just above the 2017 Canadian average for the sector — and these wages are about a dollar less than what equitable pay for this work looked like six years ago according to the New Brunswick Coalition for Pay Equity.

These increases were not included in the action plan because they are not part of bilateral funding agreement, as per the federal government’s criteria. With wages falling outside of the agreement and an election in fall 2018, the increases are essentially an election platform commitment.

Fees

Early Learning Centres will have to agree to adhere to a Low Fee Policy and a Market Fee Threshold Policy that control the rate at which Early Learning Centres can increase fees.

Despite these policies, a no daycare will be ineligible to become an Early Learning Centre because of high fees. Instead, the daycare would be restricted in increasing its fees until the market average increases enough that the daycare’s fees are closer to it. To avoid a rash of fee increases in anticipation of these policies, daycares applying for the designation must maintain the rates they were charging as of December 1, 2017.

These policies have the potential to stabilize fees in Early Learning Centres immediately and standardize them over time.

Rollout of Early Learning Centres

Because families’ access to increased subsidies is dependent on access to an Early Learning Centre, we want to be sure that rollout of this program does not disadvantage parents in specific demographics, communities, or regions.

We’ll be eager, for instance, to see that there is an equitable rollout between urban and rural daycares, daycares offering the English and French curriculum, and not-for-profit and private daycares.

Exclusion of school-age children in subsidy and 20 per cent cap calculations

It is worth noting that the cost of before and after school care for school age children is not taken into account in the calculations of Early Learning Centre subsidies nor is it counted toward the 20% cap. While this kind of child care is outside of the scope of the action plan and is significant less costly than care for infants and preschoolers, it is still a child care expense that impacts families.

Creation of infant spaces

Infants (0–23 months) are the most expensive group of children for daycares to provide care for because of regulations relating to staff and space. They require the highest staff to child ratio of any age group and, currently, spaces for infants 15 months and under also require twice the floor space allotment required for infants 16 months and older and preschoolers require. The result is that many daycares offer limited, if any, infant spaces — particularly for infants 15 month and under.

While there is new funding for infant care in the Early Learning Centre model, it does not provide incentives that encourage the creation of 0–15 months spaces specifically.

Governance models

In New Brunswick, daycares are 70% private — the inverse of the national average of 70% not-for-profit and 30% private.

Many child care advocates want to see child care transform into a publicly managed service or an almost exclusively not-for-profit sector. In 2016, a provincial task force on child care recommended just that when it advised government to cease issuing permits for private daycares and help existing private daycares transition to not-for-profits.

While the action plan frequently references the task force’s work, it does not follow the recommendation to move toward a not-for-profit sector.

The Early Learning Centre model does little to encourage a shift toward a not-for-profit child care sector. The only incentive for daycares to become not-for-profit is the possibility of becoming a Centre of Excellence. Under the plan, one Early Learning Centre per school district will be designated as a Centre of Excellence — like a teaching hospital, but for child care and early learning. Early Learning Centres must be not-for-profit or willing to become not-for-profit in order to become a Centre of Excellence. With only seven Centre of Excellence in the province, this incentive is not a strong one.

Bottom line

Transforming the child care sector is a daunting task. Changes will affect the bottom lines and viability of organizations and businesses; the wages and employment satisfaction of staff; and the availability, affordability, and quality of services.

The action plan is careful to address concerns of both daycare operators and families through increased financial support for each group and increased quality being constantly reinforced as goal. By leaving existing programs intact and making the Early Learning Centre designation a voluntary pursuit that is open to both not-for-profit and private daycares, government is not adding additional compulsory regulatory burdens on the sector — it leaves the promise of operating dollars and pressure from families to do the convincing.

Government may feel that this approach is its best bet to advance much needed change in a way that can succeed within the context of our province. The changes, if they fully roll out, will certainly have positive effects on the financial sustainability of daycares and affordability for parents. We are eager to see if accessibility and quality improve over time, as well as if sector wages increase. With true transformation of the child care requiring a shift toward a not-for-profit sector, it remains to be seen if the action plan is the first step in a long game to get us there or if government missed a critical opportunity to incentivize the non-profit model.