Chapter 4: Funding Our Best Future

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Full day learning for four and five-year olds should be part of a comprehensive early childhood education and child care system in Ontario. [We must:] 

• Allocate permanent base funding to support a comprehensive early learning and child care system that is accountable, sustainable and flexible
• Allocate sustainable funds to mitigate any financial impact upon the current child care system.

Regional Municipality of Niagara, March 2009

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Recommendations:

19. The Province should:
    • adopt a three-year time frame, beginning in September 2010, to implement a two-year full (school) day Early Learning Program prior to Grade 1, for every child who turns 4 by December 31;
    • provide sufficient funding for operations and staffing levels for the Early Learning Program for 4- and 5-year-olds to support the recommendations in this report;
    • allocate equitably across all regions and school boards, including boards that now offer full-day learning;
    • provide sufficient funding to school boards to cover occupancy and related costs for the operation of extended day/year programming for children from 4 to 12 years old;
    • modify child care fee subsidy eligibility to facilitate flexible enrollment options and remove parents’ work requirement for eligibility so that more children can benefit, especially the most disadvantaged children;
    • maintain the current 75 per cent target for French-language elementary schools to have French-language programs for 0- to 3-year-olds by 2011–12;
    • transfer to municipal authorities funding for Best Start Child and Family Centres in a single envelope that includes all existing transfers for programs/resources that will be consolidated under Best Start Child and Family Centres, resources associated with regulation and oversight, plus all child care savings generated from implementation of the Early Learning Program;
    • negotiate transitional funding, as necessary, to support program reorganization through Early Years Service Plans;
    • secure continued support for Best Start child care spaces now funded by the federal government;
    • undertake immediate discussions with the federal government to ensure children of First Nations are not disadvantaged by the implementation of full-day learning.

Estimating Capital Costs

To make room for full-day early learning and Best Start Child and Family Centres, a number of elementary schools will require renovations. We have a good start. About 1,500, or more than one-third, of Ontario’s 4,000 elementary schools could accommodate full-day learning with no or minor modifications. Funding has already been allocated for full-day learning in most new school construction both planned and in development.

The remaining schools would require capital support as follows:⁵⁵

• new purpose-built classrooms for full-day learning: approximately 2,500 classrooms in 1,400 schools
• renovation of approximately 1,200 surplus classrooms in 950 schools
• renovation of approximately 1,100 classrooms in 780 schools used for Kindergarten but not purpose built

My best estimate of capital costs would be an annualized cost of about $130million.⁵⁶ Ongoing review by the provincial government will be required.

To reduce costs, service planning should factor in surplus capacity in surrounding schools, not just in individual schools. Taking a family of schools approach (e.g., revising school boundaries and shared/transferred space between boards) would significantly decrease construction costs.

Space in schools used by Parenting and Family Literacy Centres or purpose-built, renovated, or leased space now used by child care or other family programs is not included in the calculations. It is essential that this space be protected for the continued operation of early years programming and the development of Best Start Child and Family Centres. The estimates also reserve space for special school programming.⁵⁷

With a proposed three-year implementation time frame for the full-day Early Learning Program:

• year 1 could include newly opened schools and those able to utilize existing space (approximately 35% of schools) and include some attention to low-income neighborhoods;
• year 2 could include newly opened schools and renovated surplus classrooms (approximately 30% of schools);
• year 3 could include newly opened schools, new classroom construction, and the renovation of rooms currently used for 4- and 5-year olds (remaining 35% of schools).

While construction may lag behind the demand for space in schools in which to deliver full-day learning, community service planning can apply ingenuity to secure temporary, shared, and off-site space to accommodate need.

Estimating the Resources Required for Full-Day Learning

I estimate that the incremental staffing and operational costs (facilities maintenance, administrative overhead, program materials, language and special needs supports, and transportation) of the Early Learning Program at full implementation would range from $790 million to $990 million.

Parent Fees – Savings for Ontario Families

The introduction of full-day learning and the reorganization and consolidation of services create cost-efficiencies to allow a more affordable parent fee for additional extended day requirements if needed. Parents who now use full-time licensed child care can expect significant savings.

Under the new system, fees for 4- and 5-year-old children attending full-year, extended day programming would average $6,750 annually ($27/day).For children from 6 to 8 years old attending the year-round Extended Day Primary program, the cost would be $5,200 annually ($20/day). The differential reflects the variation in staffing requirements for younger and older children.The after-tax cost⁵⁹ to parents would be about $5,000 per child, or about 13 per cent of the net income of a family earning the provincial median pre-tax wage of $55,723. Details are provided in the endnotes.⁶⁰Child care fee subsidies will remain essential for low-income families.

UNICEF sets 10 per cent to 15 per cent of net family income as an affordability benchmark for how much parents should pay for child care.Full-day learning would help most parents reach that benchmark. This would represent a significant achievement for Ontario.

Costs have been calculated on programs operating 11 hours per day, 50 weeks per year.

School boards would cover (already built into the costing noted earlier):

• full-year occupancy costs;
• professional development;
• staffing and supervision costs during the school day/year;
• administration;
• program costs during the school year.

Parent fees would cover:

• lunch and snacks;
• extended day/year staffing and supervision costs;
• program costs for the summer program.

Municipal authorities would continue to administer the fee subsidy program. Eligibility for fee subsidies should be modified to facilitate flexible enrolment options and should not be tied to parents’ labour force participation, thus allowing more children an opportunity to participate. This would also support the government’s poverty reduction goals.

Funding for Best Start Child and Family Centres

Funding for Best Start Child and Family Centres will largely be found in there-engineering and consolidation of existing programs and resources. Municipal authorities would maintain their current contribution levels. Provincial funds should be transferred to municipal
authorities in a single, consolidated envelope and include all existing transfers plus:

• all child care savings generated from the implementation of the Early Learning Program;⁶¹
• all public transfers/resources from other programs transferred to municipal authorities to create the Best Start Child and Family Centres;
• resources associated with regulation and oversight.

Funding sustainability must include:

• a consistent, stable, and indexed, multi-year funding envelope based on an equitable formula that reflects the local costs of child and family services;
• appropriate capital funding to meet local needs.

Federal funding that now supports Best Start child care spaces is scheduled to end in early 2010. This support needs to be maintained as part of the effective implementation of full-day learning. The Province should make it clear to its municipal partners that it will secure continued support from the federal government for the original Best Start funding base or replace federal funding with provincial resources to ensure stability.

Some additional transition funding may be required to make the journey from service fragmentation to a child and family service system a success. Program reorganization will involve adjustments in labour and resource transfers. Transitional funding should be negotiated as part of Early Years Service Plans and multiyear service agreements. Once implementation targets have been reached, funds would roll into children related budgets of municipal authorities to support expanded access to Best Start Child and Family Centres.When services are organized to reflect what families want and need, we will also have a better idea about the levels of new investment required for expansion.

Aboriginal Funding

The federal government is financially responsible for the education of First Nations people residing on reserve. Aboriginal leaders and practitioners were clear that they expect the federal government to ensure that what Ontario provides to “its people” should have an “equal but different expression on reserve”. But Aboriginal leaders point to the outdated Band Operated Funding Formula that will not provide the funding necessary to undertake renovations, school additions, or replacements necessary to accommodate full-day learning in on-reserve schools.

Aboriginal leaders remain deeply frustrated with federal-provincial jurisdictional squabbling that they believe is too often a proxy for intentional or unintentional inaction and are adamant and “skeptical that the federal government will live up to its obligations”. In this regard, it is critical that Ontario continue to press the federal government to provide adequate levels of funding for First Nations education.

Full-day learning could also have a negative financial impact on First Nations with their school board invoicing for children going to off-reserve schools. First Nations are concerned that full-day learning may result intuition arrears. Grants for Student Needs grow annually, while reimbursement from Indian and Northern Affairs Canada has not kept pace. Some school boards reserve the right to deny students attendance at their schools if the First Nation from which students come falls into arrears. First Nations leaders are alarmed by any situation that may deny children the right to attend school. It is essential that these concerns be addressed prior to the implementation of full-day learning.

Recognizing the Pioneers

For the past decade, French-language boards have prioritized their funding to offer full-time programming to 13,500 4- and 5-year-olds. Seventeen English-language school boards chose to use their grants to extend full-day,everyday programming to some of their schools. This achievement should be recognized, and boards that have led the way should not be penalized financially.

During year 1 of implementation, boards with full-day learning should meet the programming benchmarks laid out in this report. Subsequent funding should be used to expand the Early Learning Program into schools that do not have it. After a school board has fully implemented the Early Learning Program, it should be allowed to use any additional early learning allocations to restore resources channelled from other programs.

The Ministry of Education’s goal of child care for children from 0 to3 years old in 75 per cent of French-language schools deserves support. It is fully consistent with the development of Best Start Child and Family Centres outlined in this report. The ministry should continue its negotiations with the federal Official Languages in Education Program to cover the capital costs. Consideration should first be given to communities with the greatest need for French-language supports.

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Letter of Transmittal

Chapter 1: An Early Years Vision for Ontario

Chapter 2: A Brief Review of the Evidence

Chapter 3: Full-Day Learning: Leaving the Patchwork Behind

Chapter 4: Funding Our Best Future

Chapter 5: From Words to Action

Acknowledging the "We" of Authorship

Recommendations

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Footnotes

55 The Ministry of Education does not provide space specifications. School board guidelines for both new and renovated classrooms generally include direct access to outdoor play areas, in-room or adjacent washrooms, food preparation and storage areas, a low sink accessible to children, cubbies, and equipment storage. Newly constructed Kindergarten classrooms average 1,000 square feet.

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56 Capital costs annualized over 25 years would total approximately $1.7billion.

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57 The model reserves some classrooms for special school programming based on enrolment in the school:

• Less than 249 students in the school, 1 classroom is reserved
• From 250 to 449 students, 2 classrooms
• 450 or more students, 3 classrooms

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58 Calculations of staffing cost are based on current teacher collective agreements and average annual ECE salaries of $47,000, with benefits totalling24 per cent.

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59 Program managers should ensure that parents are fully aware of the opportunities to recoup fees paid through the federal Child Care Expense Deduction (CCED). Analysis indicates that Ontario parents are not making full use of the CCED, which provides tax exemptions of $7,000 for children under 6and $4,000 for children 7 to 16 years old. As well, the CCED has not been adjusted in over a decade. Its $7,000 ceiling does not address the high fees in infant and toddler care. The Province should urge the federal government to bring its tax policies in line with the actual costs of non-parental childcare.

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60 Calculating Parent Fees for Extended Day/Year Programming for Children 4 to 8 Years Old

Extended day/year Early Learning Program: $6,700 annually/$27 daily

Extended day/year Extended Day Primary program, children 6 to 8: $5,200annually/$20 daily

Family 1 with One Child Under Six

	Two Parents With Subsidy	One Parent With Subsidy	Two Parents Without Subsidy	One Parent Without Subsidy
Median pre-tax wage	$55,723	$29,809	$55,723	$29,809
Cost 1 child	$6,700	$6,700	$6,700	$6,700
Income tested fee	$6,717	$981	$0	$0
Subsidy	$0	$5,719	$0	$0
Parents pay	$6,700	$981	$6,700	$6,700
CCED reimburses	$1,414	$206	$1,414	$1,474
Net parent fee	$5,303	$775	$5,303	$5,226
% of “full fee”	79%	12%	78%	78%
% of pre-tax income	9.5%	3%	9%	18%
% of net income	13.6%	3.4%	13.6%	29.0%

Family 2 with Two Children: One Under Six, One Over Six

	Two Parents With Subsidy	One Parent With Subsidy	Two Parents Without Subsidy	One Parent Without Subsidy
Median pre-tax wage	$55,723	$29,809	$55,723	$29,809
Cost 2 children	$11,900	$11,900	$11,900	$11,900
Income tested fee	$6,717	$981	$0	$0
Subsidy	$5,183	$10,919	$0	$0
Parents pay	$6,717	$981	$11,900	$11,900
CCED reimburses	$1,414	$206	$2,316	$2,316
CCED reimburses	$1,414	$206	$2,316	$2,316
Net parent fee	$5,303	$775	$9,584	$9,584
% of “full fee"	45%	7%	81%	81%
% of pre-tax income	10%	3%	17%	32%
% of net income	13.6%	3.4%	27.1%	64.5%

Note: Family incomes are based on the 2006 Census, median pre-tax family income; pre-tax incomes are used for the purpose of calculating “income tested” child care fees.

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61 Savings will come from lower fees for 4- to 8-year-olds. Fewer parents will require fee subsidies, thus freeing up subsidy funding for more disadvantaged families. Wage grants for ECEs working with children from age 4 to 12 will remain with municipal authorities. The salaries of ECEs working in schools will be covered by school boards.

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