Some Alberta childcare centres risk closing amid rising costs and fixed fees: operator
Posted Dec 30, 2023 08:26:18 AM.
Last Updated Jan 2, 2024 10:00:58 AM.
Some daycare operators say they’re struggling to keep their doors open mainly due to the Alberta government’s new payment model and a fee cap.
The province’s recent increase to the affordability grant is set to reduce childcare costs for parents effective Jan. 1.
However, one Calgary daycare operator, whom CityNews has agreed to keep anonymous, tells us they are on the brink of closure due to rising food costs, higher rents and increased business tax.
They feel their hands are tied as they can’t increase their parent portion of the fees due to the contract with the Alberta government.
Krystal Churcher, the chair of the Association of Alberta Childcare Entrepreneurs, which represents almost 20,000 daycares in Alberta, says daycares need to sign the new contracts by Jan. 31 to qualify for extended grants and subsidies, but it will lead to more losses for them.
“The $10-a-day childcare program. Well, it sounds really good in the headlines. And it’s absolutely a wonderful thing for families. It’s very, very difficult for your childcare operators,” she told CityNews.
“Inflation has been so high daycare operators have had their fees frozen for two years. We came out of COVID with very compassionate, low fees most of us and we signed into an agreement really without understanding the long-term impact of that agreement.”
Watch: Alberta expands childcare affordability grant
The Alberta government gave daycares that signed the contracts a three percent Cost Increase Replacement Funding for the last two years and that will increase to six per cent in 2024.
But Churcher says that’s of little help considering the rate of inflation and the new payment plan where the daycare will have to claim the government part of the fees after 40 days.
“I don’t know how operationally anyone can stay open moving forward. There is no way you can pay your rent and your wages and everything with no access to your revenue for 40 to 45 days,” she said.
“So for January, for example, in the past, we would have 100 per cent of our childcare fees paid to your operator on the first of January. Now we get a little bit from what’s leftover from parents on the first. We have to wait till the first week in February when we can now submit a claim to the government to pay us back.”
She says operators then have to wait for five to 10 business days to receive the funds and then would have to carry the cost of the program for 40 to 45 days.
Read More: Alberta parents will see lower childcare fees in 2024, thanks to grant increase: Minister
Churcher says to ease the burden on Alberta daycares, the government should consider opting for a parent payment model.
Albertans would receive the grant and subsidy money in their accounts on the first of each month, and then they could pay the full fee to the daycare centres.
“Alberta’s government is focused on ensuring life remains affordable for families and businesses. Affordable child care creates opportunities, keeping money in the pockets of parents,” Minister of Children and Family Services press secretary Ashli Barrett said in an email to CityNews.
“We have provided funding to operators that amounts to a three per cent increase in program fees to help cover increased costs of doing business. This will ensure fee increases are not passed on to parents.
“To further support operators while reducing parent fees, we’ve been replacing the revenue operators previously received from parents with the Affordability Grant,” she explained. “Through this grant, operators receive the same amount of money monthly from government that they would from parents. Operators also received approximately $32.8 million in 2023 through a one-time grant assisting with inflationary and administrative costs.
“Operators continue to receive funding to support wage top-ups, Infant Care Incentives (children 0 to 18 months), subsidies for eligible families and other supports such as professional development funding.
“Alberta’s government is also offering a one-time grant early next year for operators who submitted their financial reporting for the 2022-23 Affordability Grant that ended on March 31, 2022,” Barrett said. “This grant will help cover some of the costs of associated with financial reporting requirements. Child care operators have until the end of January 2024 to sign their affordability grant agreements. All operators signed affordability grant agreements in 2023.”
The province says parents who are looking for information or have concerns about child care programs in their community can call the toll-free Child Care Connect line at 1-844-5165 or email email@example.com for support and assistance.