Ministry of Education
Early Years and Child Care Division
315 Front Street West, 11th Floor
Toronto ON M5V 3A4
TO: Consolidated Municipal Service Managers (CMSMs) and District Social Services Administration Boards (DSSABs)
FROM: Holly Moran, Assistant Deputy Minister Early Years and Child Care Division
DATE: November 26, 2024
SUBJECT: Ontario Child Care and Early Years Funding Guidelines
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Thank you for your ongoing partnership as we continue to invest and make strides in our work together to deliver affordable, accessible and high-quality child care to Ontario’s families.
I am pleased to share the Ontario Child Care and Early Years Funding Guidelines (“the guidelines”) to support municipal planning for 2025 and beyond. Note: these guidelines include and build on the CWELCC Cost-Based Funding Guideline first released on August 1, 2024, to cover broader provincial child care and early years funding.
Effective January 1, 2025, the guidelines have been organized into a chapter-based structure, which provides content by theme to help improve clarity, flow and overall ease of use. Thesechapters include all relevant content from the previous 2024 Ontario Child Care and EarlyON Child and Family Centres Service Management and Funding Guideline and the 2024 Canada-wide Early Learning and Child Care Guideline, and have been updated to:
· Reflect the new, cost-based funding approach and streamline sections that are now redundant; and
· Reflect the integration of routine child care funding in respect of children aged 0 to 5 into the CWELCC system through the new funding approach, and the impact to non-CWELCC-enrolled-licensees.
The changes in the guidelines are primarily structural, for better organization and simplification, and include limited substantive changes. Please see the Ontario Child Care and Early Years Funding Guidelines: Foreword for further details regarding the changes.
Investments for 2025
Investments from the Government of Ontario and the Government of Canada in the child care and early years system will total about $5.8B for 2025, representing an increase of about $1.6B over 2024. Investments for 2025 include the following:
· $4.61B in Cost-based funding to support operating costs for licensees participating in CWELCC for the delivery of child care to CWELCC-eligible children;
· $0.15B in Start-up Grant funding to support capital costs related to the creation of affordable child care spaces for CWELCC-eligible children;
· $0.76B in Local Priorities funding to support operating costs largely outside of the CWELCC system, including fee subsidies and Special Needs Resourcing;
· $0.16B in EarlyON Child and Family Centre funding;
· $0.02B in Indigenous-led funding; and
· $0.08B in Administrative funding to support CMSMs/DSSABs with their administrative capacity to support the early years and child care sector.
Updates for 2025
The following outlines the key changes being introduced in the guidelines:
· A more flexible General Operating Expense funding line which consolidates many former stand-alone funding lines. This is to streamline flexibility funding, allow CMSMs/DSSABs to focus on local needs and reduce administrative burden.
· Fee subsidy, Ontario Works and Special Needs Resourcing (SNR) service targets will be unchanged for 2025. However, penalties related to missing these targets will not be applied for the year in recognition of the significant change underway. The ministry will consult with CMSMs/DSSABs on future service targets.
· Small updates to the CWELCC Cost-Based Funding Guideline are included to provide additional clarity, as per an October 22, 2024 memo from the ministry.
· To reflect the smaller ‘base’ for SNR spending outside of cost-based funding, SNR spending requirements have changed from a minimum of 4.1% of child care allocations (2024) to 8.5% of the ‘Local Priorities – Flexibility Funding’ allocations (2025). Note: this higher percentage equates to the same overall spending level across the province.
· The order of operations for wage supports has been clarified, as per an August 1, 2024 memo from the ministry.
· The order of operations for cost-sharing requirements has been clarified.
· Reporting requirements related to service data for all funding programs have been combined into one reference Chapter, and the requirement for an interim report has been removed for 2025.
Please see Ontario Child Care and Early Years Funding Guidelines: Foreword for further details and additional changes.
Upcoming changes to Ontario Regulation 137/15 regarding base fee reduction
To support the transition to $10 per day average fees by the end of 2025-26, families with children in programs enrolled in the CWELCC system will see child care base fees capped at $22 per day effective January 1, 2025.
Regulatory amendments to O. Reg. 137/15 under the Child Care and Early Years Act, 2014 (CCEYA) are required to operationalize this change to base fees and the ministry consulted on these regulatory amendments on the Regulatory Registry from August to October 2024. More information on the next parent fee reduction will be shared in the coming weeks.
Next Steps
A. Space Recalibration
The investments listed above have been allocated to CMSMs/DSSABs accounting for current directed growth targets and may be adjusted through the recalibration of CWELCC space targets for 2025 and 2026, which is currently in progress. More information will follow at a later date.
B. 2025 Funding Allocations Technical Paper
The 2025 Funding Allocations Technical Paper, which describes the formulae and criteria used to calculate funding allocations to CMSMs/DSSABs, will be posted online shortly along with the guidelines.
C. Templates and other licensee-level data information
In an effort to standardize reporting, the ministry will be consulting with CMSMs/DSSABs in the coming months on templates, including the Licensee’s Standardized Financial Report, the Cost Review Report Back, and the Request for release of Cost-Based Funding Allocation Holdback.
Further, the ministry plans to consult on the collection of comprehensive site-level data, including inputs and assumptions used in the cost-based funding allocation and actual eligible costs. It is anticipated that these data will be used to monitor and evaluate the performance of cost-based funding and determine potential future adjustments to the benchmarks.
D. Additional funding
Further information and updates on new funding programs for the Early Learning and Child Care Infrastructure Fund and the Innovation Fund (workforce strategy funding) will be provided at a later date.
The ministry recognizes the scope of change underway and sincerely appreciates your partnership as we work together to build a sustainable system that supports the needs of children and their families.
Sincerely,
Original signed by:
Holly Moran
Assistant Deputy Minister
Early Years and Child Care Division
cc: Matthew DesRosiers, Director, Funding Branch
Katie Williams, Director, Early Years Branch
Karen Puhlmann, Director, Child Care Branch