Toronto

Here's what you could be paying for child care in Toronto after Ontario's latest cuts

Toronto families that currently have subsidized child-care spaces could be on the hook for thousands of dollars in extra costs due to proposed changes by the provincial government.

6,166 subsidized spaces could be eliminated, an internal city memo says

Daycare operators say the loss of subsidized spaces could drive up fees for families that pay full costs, and even force some centres to close entirely. (Charles Contant/CBC)

Toronto families that have subsidized child care spaces could be on the hook for thousands of dollars in extra costs due to proposed changes by the provincial government.

The City of Toronto estimates that cuts and policy changes could lead to the loss of 6,166 subsidized spaces due to an $84.8 million funding shortfall. The city's numbers show 31,979 children currently receive a child care fee subsidy.

The projected losses were included in an internal memo obtained by CBC Toronto on Thursday.

While Toronto Mayor John Tory has characterized the changes as "dramatic cutbacks" to a necessary service, Ontario's Progressive Conservatives argue that the cuts are aimed at reducing administrative costs.

The Tories are also pointing to the province's new Childcare Access and Relief from Expenses (CARE) tax credit, which was introduced in the spring budget. The benefit will allow families to keep more of their earnings and allow them to choose child care that best suits their needs, according to the PCs.

A spokesperson for Education Minister Lisa Thompson says the changes are primarily aimed at reducing inefficiency. (Chris Young/Canadian Press)

As the province and City of Toronto square off over the impact of the cuts and changes, CBC Toronto has calculated how families will be affected under the new regime, should they lose one of the subsidized spaces expected to be cut — based not only on the figures in the city memo but also on the federal and provincial tax credits those families would be eligible to receive.

The following calculations are based on families with one preschool child and one infant.

Child care for two children at those ages currently costs $35,430 per year, per the city's estimates.

Families earning $20K

Families earning a combined income of $20,000 or less per year qualify for subsidized child care spaces at no cost.

If the spaces were to be eliminated under the proposed changes, the family would be eligible for a provincial tax credit amounting to 75 per cent of eligible expenses, or $12,000 in total.

Eligible expenses are capped at $8,000 annually per child, a figure set by the federal government.

That would leave a family earning $20,000 per year on the hook for $23,430 in annual child care fees if they were to lose their subsidized spaces.

Families earning $45.5K

Two-child families earning a combined income of $45,500 per year pay $3,650 for subsidized child care spaces.

If the spaces were to be eliminated, the family would be eligible for a 55 per cent credit through CARE, and an additional 19 per cent through the federal Child Care Expense Deduction.

That would leave a family earning $45,500 with a bill of $23,590 in annual child care fees — more than six times their current expenses.

'These are not efficiencies, these are dramatic cutbacks,' Mayor John Tory says. (Evan Mitsui/CBC)

Families earning $95K

Families earning a combined income of $95,000 per year currently pay $18,500 per year for two subsidized child care spaces.

Under the proposed changes, those families would be eligible for a 31 per cent CARE credit and a 23 per cent credit through the federal Child Care Expense Deduction.

Again, these deductions only apply to the $8,000 per child eligible expense limit.

If the family lost access to subsidized spaces, it would face a $26,790 annual child care bill — about 45 per cent higher than its existing costs.

Families earning $150K

Families that earn more than $150,000 per year would not be directly affected by the loss of subsidized spaces, since they do not currently qualify under Toronto's guidelines.

Families in this income bracket also do not qualify for the CARE credit, though they are eligible for a 28-per-cent credit through the Child Care Expense Deduction.

These families would remain on the hook for $30,950 in annual child-care fees for two children.

However, managers of child care centres say the loss of subsidized spaces are vital to cover their own operating costs. They say the loss of those spaces will drive up costs even for families who pay full fees.

Amy O’Neil, a daycare director, warns that fees could go up even for families that don't access subsidies. (Martin Trainor/CBC)

Operators warn of a ripple effect

"For centres like mine, that has predominantly full-fee families, those parent fees do not cover the true cost of operating child care, and those fees will hike," said Amy O'Neil, the director of Treetop Children's Centre in midtown Toronto.

Operators of daycares that rely more heavily on subsidized funds say they could be at risk of closing should the changes go through, since their clients will not be able to afford full fees.

"It will affect the viability of centres, especially standalone centres," said Margaret Udo, the manager of Little Prints Daycare.

If her facility went into a deficit, she said the outlook would be grim.

"We'll have to close down."

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