Albertans in the process of setting up new child-care facilities say they’ve had the rug pulled out from under them as the Alberta government abruptly informed them last week they would not qualify for grants under the federal-provincial child-care agreement.
“I am devastated,” said Arshdeep Kaur, who is in the process of renovating a building she purchased in Calgary and planned to open in July as a new daycare named Sparkling Kids.
Kaur moved to Canada from India in 2011 and began working in early childhood education the following year. She said she always dreamed of opening a daycare of her own and initially planned to do it once her own children were a little older.
But she says her plans changed two years ago when her then two-year-old daughter was diagnosed with leukemia. While going through the treatment process, she had lots of time to think.
“That’s when I decided, no, this is the right time to start my own daycare,” Kaur said.
Her family back home in India sold their farm to help finance her dream.
After hunting for months for a building to lease, she found nothing suitable for a daycare. She ended up purchasing a building, herself, and set about renovating it into a child-care facility.
She says she’s now sunk hundreds of thousands of dollars into the venture — all on the understanding that she, like most daycare facility operators in Alberta, would be eligible to participate in the federal-provincial funding agreement that’s been in place since 2021.
But last Thursday, everything changed. That’s when she says she received an email from the province saying Alberta was nearing the limit of new, for-profit spaces that can qualify under the five-year agreement it signed with Ottawa, so her daycare would not qualify for the government grants.
Without those funds, the price parents would have to pay at her daycare could be three to four times higher than the flat rate of $326 per month offered at qualifying child-care facilities.
Kaur said that throughout all the back and forth with government officials she’s had to get the daycare to this point, amid all the permits and paperwork, it was never even suggested to her that the funding might not be available once she opens.
“The government has not ever told me in the past year that it’s going to be capped and going to be stopped at some point,” she said.
“And now I have almost a million-dollar debt on myself.”
Cheryl Montgomery was all set to open a new daycare in the town of Nanton when she got the news that she, too, wouldn’t qualify for the government funding.
“There was disappointment. There was shock. There was, I guess, a level of panic,” she said.
“We’ve invested a lot into this already, including a signed lease for a year.”
Montgomery’s facility, Little Ropers Learning, would have space for 22 children. She was waiting on a final licensing inspection before officially opening and already had a list of would-be staff and parents interested in enrolling their kids.
But now, she’s not sure how to proceed without having access to the government grants that were a key part of her business plan.
She has informed parents that, without those grants, they’d have to pay the full rate of $1,100 per month, per child, and she’s not sure she’d have enough clients willing to pay that price.
Montgomery said she had no communication with the province that would even suggest she might not qualify for funding until she was suddenly informed last week that she was ineligible.
She’s been in touch with other operators in similar situations and says some are now worried about bankruptcy.
“It’s a scary situation to be in,” Montgomery said.
“Financially, we’ve all invested so much of our time, of our money. We now have these centres that are pretty much ready to open tomorrow and now we’ve just all been crushed by the news that we don’t qualify.”
Under the agreement it signed with the federal government in 2021, Alberta pledged to use nearly $4 billion in federal funds to “prioritize not-for-profit” daycare expansion.
The text of that agreement reads: “Alberta commits to creating a minimum of 42,500 not-for-profit spaces over the next five years.”
The terms of the deal also say Alberta “may create up to 26,200 for-profit spaces,” for a target of 68,700 new spaces, in total, by the end of the agreement in 2026.
Seven provinces and all three territories have signed on to new federal agreements through 2031, while Ontario has reached an agreement in principle. Alberta and Saskatchewan have not reached new agreements with Ottawa.
As of March, the province says roughly 19,500 for-profit spaces have been created under the federal-provincial program, and approximately 3,000 additional spaces have been allocated to programs with previously approved space-creation grants.
Montgomery says the province informed her it will no longer qualify new facilities for funding except in a handful of communities where demand for child care is especially high, which doesn’t include Nanton.
Demetrios Nicolaides is the new minister responsible for child care in Alberta, after a cabinet shuffle last week.
He told reporters Wednesday the province needs to ensure “adequate access to child-care spaces” in areas where there is the highest demand.
“We’re providing funding to areas where it’s needed the most to help alleviate demand,” he said. “So it’s largely driven by demand pressure.”
Nicolaides added that he’s new to the role and sorting out these issues will be a top priority for him.
“I think I’ve been minister of child care for maybe about three to four days,” he said.
“So, one of the first things that I’ll be doing very shortly here is reaching out to many of those operators, advocacy organizations, umbrella groups and chatting with them in a little more detail to try and get the best possible understanding of the pain points, challenges, concerns, so that we can work together to address them. So, I would just ask them to hang tight, sit by the phone and we’ll be giving them a call shortly and look forward to chatting.”
Montgomery says she’s been trying to get a hold of anyone with the Alberta government since receiving the news last week that she won’t qualify for funding and has been met with silence.
“I’ve phoned, I’ve emailed … and I’ve received nothing back,” she said.
“There’s zero communication from the government to me, personally.”
In a written statement to CBC News, Nicolaides said he understands the situation is “disappointing for those hardworking entrepreneurs opening new programs without the same access to funding as their peers in the sector.”
“Alberta continues to push for more flexibility, in the current agreement as well as the next, because providers and parents deserve better,” he said. “We will continue good-faith negotiations with the federal government for a well-funded early learning and child-care agreement that is free of arbitrary restrictions, treats all providers equitably and targets supports to families most in need.”
With her Calgary daycare still under construction, Kaur worries she may have to sell her own home to cover her debts if something doesn’t change.
She doubts anyone will be willing to buy the facility she purchased, now that it’s been nearly converted into a daycare facility — especially if new operators continue to be ineligible for government funding.
“We have invested everything. Everything we have,” she said.
“It might break us.”
