Federal Support for Child care

The Government of Canada supports child care through direct support and tax measures for families and through a notional allocation of the Canada Social Transfer (CST) to provinces and territories. These funds are transferred on an equal per capita basis. Provincial and territorial governments have the responsibility to design and deliver programs and are accountable to their citizens and legislatures for outcomes achieved and dollars spent.

Since 2004-05, the CST has been the main federal transfer program providing financial support to provinces and territories for post-secondary education, social assistance, and social services, including early childhood development and early learning and child care (prior to 2004-05, funding was transferred through the Canada Health and Social Transfers (CHST)). Since 2007-08 the CST has been notionally allocated to identify the federal contributions to each of these areas: 10 per cent of the CST is notionally allocated for support for children, 31 per cent for post-secondary education, while the other 59 per cent is notionally allocated for other social programs.

Total CST levels are set in legislation to grow by three per cent annually. As a result of the automatic escalator, CST transfers notionally allocated for children will be over $1.2 billion in 2012-13.

Universal Child Care Plan (2006 and 2007)

The Universal Child Care Plan, announced in Budget 2006, was comprised of two elements:

  1. Universal Child Care Benefit (UCCB): provides direct support to parents through monthly payments of $100 for every child under the age of 6, effective July 1, 2006. In 2012-13, the UCCB is estimated to provide nearly $2.7 billion to Canadian parents through monthly payments.
  2. Increased support for child care spaces: In addition to a 25 per cent investment tax credit for businesses that create new child care spaces in the workplace, Budget 2007 fulfilled the commitment to provide $250 million annually for the development of child care spaces in provinces and territories. In 2007-08, this $250 million investment was provided directly to provinces and territories on an equal per capita basis and, beginning in 2008-09, was incorporated into the CST.
Child Care Spaces Initiative 2007
($ millions)
Total
Newfoundland and Labrador 3.9
Prince Edward Island 1.1
Nova Scotia 7.1
New Brunswick 5.7
Quebec 58.5
Ontario 97.5
Manitoba 9.0
Saskatchewan 7.5
Alberta 25.9
British Columbia 33.1
Yukon 0.2
Northwest Territories 0.3
Nunavut 0.2
TOTAL 250.0
Note: Based on equal per capita allocation. Totals may not add due to rounding.

The UCCB is delivered by the Canada Revenue Agency on behalf of Human Resources and Skills Development Canada. The CST is administered by the Department of Finance.

Early Learning and Child Care Initiative (2005)

In addition to notional funding for support for children through the CST, the 2005 Budget committed funding to support the Early Learning and Child Care (ELCC) initiative across the country. Under this initiative, funding of $700 million over 2004-05 and 2005-06 was provided to provinces and territories.

With the introduction of the Universal Child Care Plan, the Government of Canada announced in Budget 2006 that it would phase out the ELCC agreements with provinces and territories at the end of March 2007. This was consistent with the provisions of the ELCC agreements with provinces and territories, which allowed for their termination upon one year’s notice by either party. To support the transition, the Government provided $650 million in 2006-07 to provincial and territorial governments; these funds were distributed on an equal per capita basis.

Early Learning and Child Care 2005
($ millions)
Trust

   
2004-05 2005-06 Sub-Total 2006-07 Total
Newfoundland and Labrador 3.2 8.0 11.3 10.3 21.5
Prince Edward Island 0.9 2.2 3.0 2.8 5.8
Nova Scotia 5.9 14.6 20.4 18.7 39.2
New Brunswick 4.7 11.7 16.4 15.0 31.4
Quebec 47.2 117.8 165.0 152.7 317.8
Ontario 77.6 194.3 271.9 252.9 524.8
Manitoba 7.3 18.3 25.6 23.7 49.3
Saskatchewan 6.2 15.5 21.7 19.9 41.6
Alberta 20.0 50.3 70.4 66.0 136.3
British Columbia 26.3 65.8 92.0 85.9 178.0
Yukon 0.2 0.5 0.7 0.6 1.3
Northwest Territories 0.3 0.7 0.9 0.9 1.8
Nunavut 0.2 0.5 0.7 0.6 1.3
TOTAL 200.0 500.0 700.0 650.0 1,350.0
Note: Based on equal per capita allocation. Funding of $700 million for 2004-05 and 2005-06 was paid into a third-party trust and accounted for by the Government of Canada in 2004-05. Totals may not add due to rounding.

Early Learning and Child Care Framework Agreement (2003)

Building upon the early childhood development commitments made by First Ministers in 2000, Budget 2003 set aside $900 million over five years (2003-04 to 2007-08) in increased federal support to provinces and territories to improve access to provincially and territorially regulated early learning and child care programs and services.

On March 13, 2003, federal/provincial/territorial Social Services Ministers reached a framework agreement in which governments committed to report to Canadians on progress achieved in improving access to early learning and child care programs and services.

In addition, the 2004 Budget provided an increase in early learning and child care funding of $75 million annually in both 2004-05 and 2005-06. Under this framework agreement, early learning and child care support amounted to $225 million in 2005-06, $300 million in 2006-07, and $350 million in 2007-08.

The Government also provided an additional $35 million over five years to build on federal early learning and child care programs for First Nations children, primarily on reserves. Budget 2004 provided a subsequent increase of $10 million over four years (2004-05 to 2007-08), bringing the Government of Canada's total support to $45 million.

Early Childhood Development Agreement (2000)

Four key areas of support were identified in the September 2000 Early Childhood Development (ECD) Agreement: healthy pregnancy, birth and infancy; parenting and family support; early childhood development, learning and care; and community support. Under this Agreement, governments committed to report on investments and their progress in expanding early childhood development programs and services within the four areas for action, using a shared framework of comparable indicators.

The Government of Canada committed to an investment of $2.2 billion over five years (2001-02 to 2005-06) in Budget 2001 to provinces and territories to improve and expand early childhood development programs and services.

Budget 2003 extended the Government’s funding commitment of $500 million annually after 2005-06 for an additional two years (2006-07 and 2007-08).

The Government also provided $320 million over five years (2003-04 to 2007-08) for early childhood development programming for First Nations and other Aboriginal children.

Other Useful Links

Early Childhood Development Agreement (2000) and funding profile
Early Learning and Child Care Framework Agreement (2003) and funding profile
Early Learning and Child Care Initiative Agreements (2005)

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