Confusion And Anger: Explaining The Ultimatum Given To N.S. Daycare Owners
HALIFAX–It’s a confusing and stressful time for privately owned daycare operators in Nova Scotia. These entrepreneurs have just two months to decide what the future of their daycare will look like under a new funding model and the provincial government is giving them just three options.
The options were laid out by the provincial government last week during a one-hour video call. Many daycare operators were left reeling from the amount of business-altering information given out.
Joe Kinsman, who co-owns’ Becky’s Daycare with his wife Naomi, attended that call. He says he had a feeling early on he wasn’t going to like what the government had to say.
“I knew the minute they told us we weren’t allowed to record the session; I knew it wasn’t good news,” said Kinsman.
Essentially, for-profit daycares now have three broad options to choose from: remain a private business under strict funding guidelines controlled by the province, become a non-profit, or go it alone outside the system without any government funding.
Details Scarce Despite Tight Deadline
The provincial government is offering operators $15,000 to seek professional advice on which option is best for them.
As Kinsman notes, not only do they have a looming deadline (March 18), but the government hasn’t given them any specific details regarding finances or logistics.
“Throughout the meeting, anytime anyone asked a question the general answer was, ‘we’re still drafting, we’re still preparing, we’re still writing,’” said Kinsman.
“They’re essentially telling us we have three options but they’re also telling us none of the three options have any of the policy or anything attached to them yet.”
These immense changes are coming on the heels of Nova Scotia signing onto the federal government’s Canada-wide Early Learning and Child Care System.
The feds are providing $605-million over five years with the expectation Nova Scotia reaches certain criteria. Most important is a dramatic reduction in parents’ fees. By 2025-26, the goal is them reduced to just $10 per day.
The new funding program will also provide 9,500 new non-profit childcare spaces across the province.
“In Nova Scotia, what we’re trying to do is build a new, transformational, early learning and childcare system for our children and families,” said Janet Lynn Huntington, a senior executive with Nova Scotia’s Department of Education and Early Childhood Development.
“For us, it’s about providing more affordable, accessible, high quality, and inclusive childcare.”
What, Exactly, Would New Funding Cover?
Out of the three options, Option A is most like the current model used for private daycare operators: relying on government funding and parents’ fees. But, according to a document given to operators last week, the funding terms will be “strict.”
The government is creating a central organization that will set parent’s fees and new funding formula. And, according to the document “Funding is tied to the actual cost of operating child care spaces (cost of care)…”
This wording is what worries Kinsman. Does “cost of operating a child care space” include business expenses like his four office employees or debt? Because of that vagueness, Kinsman still doesn’t know. And that means he is uncertain if he can make a profit under Option A.
“The first $18,000 we make a month goes to pay our mortgage,” he says.
Huntington says more information on the financial structure will be available once the government completes its review of wages for early childhood educators.
“We have announced already that we are doing a compensation review for early childhood educators this year,” she says. “That work is ongoing now. Once that compensation review is made available, that will impact the funding.”
Handing Over Your Business For ‘Pennies On The Dollar’
Option B is for privately-owned daycares to transition to a non-profit entity. In this scenario, the government will contract the business to deliver childcare services under the new, “strict’’ terms and conditions. Or the operator can join a non-profit already in place, in which case the owner and staff become employees of the non-profit organization.
But the keyword here is “non-profit.” Operators like Kinsman are wondering how that would work given the amount of money, debt, and resources, they poured into their business for years.
And the payout for giving up their for-profit system is just 60 percent of their 2021-22 grant, which Kinsman considers a pittance.
“Definitely not a fair market value assessment of the business and paid accordingly,” he says.
Then there is the question of what would happen to owners who are not trained to be early childcare educators. Neither Joe nor Naomi has such an education, so what would their roles be under a non-profit system?
“There are a lot of daycare owners who are not ECEs. So, for those people, we would be handing over our business for pennies on the dollar,” said Kinsman.
The Nuclear Option?
Option C could be nicknamed the nuclear option and is what Kinsman calls “the worst for everybody.”
If operators refuse to choose A or B they can still operate on their own. However, they will be completely cut off from any government funding, meaning they will likely rely 100 percent on parent fees.
Becky’s Daycare’s fees range from $35-$40 per day per child. Kinsman estimates he would have to raise fees by $15-20 if he chose Option C.
“It’s so backwards because Option C is the exact opposite of what the province wants for everybody,” says Kinsman. “The province wants affordable childcare for everybody, but they know if we had to choose Option C that we would have to increase rates.”
Kinsman wonders if Option C creates a two-tier system. If parents can’t find available space at a government-run or non-profit centre, would they have no choice but to use an independent daycare at an inflated price?
Province Says New System Will Be ‘Transformational’
Kinsman and other operators have expressed their anger over the situation publicly. They believe the government is all but forcing them out of their businesses with these three options.
But Huntington, speaking on behalf of the provincial government, says the opposite is true.
“We worked very closely with the government of Canada…to ensure that the for-profit childcare providers that we value and rely on in Nova Scotia would have an option to be part of this once-in-a-lifetime…transformational journey,” she said.
“We believe there is a role, and we value the role of our for-profit providers in our system.”
The opposition Liberal Party in Nova Scotia is among those expressing concern with how the process has played out.
In a written statement, Derek Mombourquette, Liberal Critic for Education and Early Childhood Development, called it “unclear, rushed, and incomplete.”
“Thousands of children across Nova Scotia play, grow, and make friends at a private daycare every day. They are valued by hard-working owners and their ECEs who’ve devoted their livelihood caring for our province’s children,” he wrote.
“When this government came into power, they had an opportunity to ensure the needs of this sector were met in their implementation of this plan. But the options they’ve been given by this government leave more questions than answers.”
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].