The Canada-Wide Early Learning and Child Care plan (CWELCC), the federal initiative to create 250,000 new, affordable child care spaces across Canada and to bring the average cost to families to roughly $10 per day by 2026, has sparked widespread public discussion—from social media to playgroups and daycare centres. While the program is not without flaws, many parents and advocates praise its goal of making child care more affordable and equitable for more families. Legislation that would commit the federal government to long-term funding for the system has been moving through Parliament and appears likely to be enacted, but the rollout is facing significant challenges, including a continuing shortage of spaces and reports of daycare closures by operators who can’t balance their books.
“Supply is still insufficient to meet the urgent demand for affordable child care spaces,” says Morna Ballantyne, executive director of Child Care Now, an organization that advocates for publicly funded child care. “The early learning and child care sector is undergoing major change.”
Families fortunate enough to secure subsidized places and to receive fee rebates are estimated to save thousands of dollars per year. Estimates vary by province—for example, savings of up to $6,780 annually per child in Nova Scotia and up to $9,390 per child in British Columbia have been cited. If a participating daycare withdraws from the program or closes altogether, those families may suddenly face higher fees and limited alternatives.
How $10-a-day daycare works
The CWELCC framework aims to provide affordable, inclusive child care across Canada by combining federal funding with provincial and territorial agreements. Provinces and territories negotiated funding arrangements and rolled out changes in stages. Early adopters froze their fees in March 2022 and parents began receiving refunds through province-specific child care fee subsidy programs. Participating daycares agreed to progressively reduce their fees with the stated goal of reaching an average of $10 per day by 2026.
The program is administered through provincial and territorial partners, and details such as eligibility, subsidy amounts and exact timelines differ across jurisdictions. That variation means families’ experiences vary depending on where they live, and operators must navigate differing reporting, funding and regulatory requirements in their region.
Why some daycares are pulling out of the program
Despite the program’s intent, some operators across multiple provinces say the funding framework limits the fees they can charge while failing to provide enough operating support to meet rising costs. Daycares that joined the program early received funding levels tied to their revenue at the time of entry, but inflation and rising operating costs have eroded those margins. Many operators report that the modest top-ups they’ve received have not kept pace with inflation, leaving them with budget shortfalls and, in some cases, significant debt.
In Alberta, a coalition of operators staged rolling closures to highlight funding and cash-flow problems, prompting provincial officials to announce adjustments to funding and payments for childcare providers. In Ontario, the YMCA—the province’s largest licensed childcare provider—has reported substantial annual losses per infant in care under the current funding model, and providers say they had hoped for a revised formula to address the gap.
Another major pressure point is staffing. Many licensed programs, especially in large cities with higher living costs, are operating below capacity because they cannot recruit or retain enough qualified early childhood educators (ECEs). “Qualified educators are leaving the sector because of the very low compensation paid, and it is very difficult to find or recruit replacements,” Ballantyne says. The staffing shortage is a leading reason for both temporary and permanent program closures and a major obstacle to expanding supply.
What families can do if their daycare pulls out
When a daycare withdraws from the subsidized program or closes, families often have limited time to respond. Municipal rules in some places require only short notice—Toronto, for example, requires 60 days’ notice to the city in addition to immediate notification of affected families. That short lead time can leave parents scrambling.
Options for families include paying higher private fees at the same centre, having a parent reduce work hours or leave the labour force, or exploring alternatives to licensed daycare. Short- and long-term alternatives can include home-based daycare, hiring a nanny (or sharing a nanny with another family), arranging care with relatives, or relying on babysitters. In many urban areas, the going rate for nannies and babysitters is substantially higher than subsidized childcare and averages around the tens of dollars per hour, making these options far more expensive than the $10-a-day target.
The national child care plan was framed as both a social and economic priority. Affordable child care supports parents’ economic security, boosts labour-force participation—especially for mothers—and helps families stay connected to paid work. “Many studies have shown, and many parents have confirmed, that lack of access to affordable child care undermines the economic security of families, and lowers the earnings of mothers in particular,” Ballantyne notes. A subsidized $10-a-day system could significantly help working parents, but it will only deliver those benefits if the funding model is sustainable for the programs providing care.
Read more about family finances:
- Canada’s $10-a-day daycare program: A guide for families
- How much does it cost to raise a child in Canada?
- Best credit cards for families
- Is an RESP worth it? Yes, even if only for the government grants
- Ages 0 to 6: Teaching kids and toddlers about money