Ontario needs to change course on child care. The Canada-wide Early Learning and Child Care (CWELCC) program underperforms, treats families unequally, and simply doesn’t meet their diverse care needs. Frankly, the province has other options to better serve families excluded from the federal program.

The CWELCC program is extremely expensive. Although federal funding rises annually, Ontario has carried over most of the federal funding from the early years of the five-year, $10.2 billion agreement into the latter years. In a mid-term evaluation, the province acknowledged that if it continues as-is into 2026-27, the program’s estimated shortfall would hit almost $2 billion.

Perhaps these colossal amounts would be OK if the program worked. But it doesn’t. Ontario is failing to meet its space-creation targets. The provincial auditor general found that Ontario came 25 percent short of its target for new spaces by December 2024. (The problem isn’t unique to Ontario, though, as the federal auditor general has confirmed.) The provincial and federal governments share the blame for this. The federal government insists on favouring only non-profit child care providers. Meanwhile, Ontario agreed to tie one hand behind its back by capping the proportion of child care businesses receiving CWELCC funding at 30 percent of the child care sector.

Even with new spaces, a large portion of Ontario CWELCC spots are vacant or inoperable. The auditor found that 27 percent of CWELCC spaces were empty or not in operation in 2023. In fact, more than four in 10 centres in the program operated at or below 80 percent capacity that year.

Worst of all, CWELCC is inequitable. It reduces fees for a minority of Ontario children lucky enough to have a spot in the program, estimated to be only about a third of children under age six. According to the auditor, the province will likely fail to achieve the $10-a-day average fee by March 2026. Reaching this target would require 15,000 more lower-income children to receive Ontario’s full subsidy. Don’t expect that to happen. Enrollment among “typically lower-income families” has fallen 31 percent compared to 2019 data. Why? Tragically, wealthier families are snagging funded spots at the expense of low-income families.

So, what can Ontario do?

The first step is to beef up the Ontario Childcare Access and Relief from Expenses (CARE) Tax Credit—a refundable tax credit for up to 75 percent of child care expenses both inside and outside CWELCC.

The CARE tax credit is losing potency due to inflation and rising household incomes. So, Ontario should index it to inflation. Then the province needs to increase the amount of annual household income at which credit claw backs begin. Right now, claw backs start at a household income of $20,000. At that level, even a single parent working a full-time, minimum wage job doesn’t get the maximum benefit. A much more generous CARE credit would help many more families, especially those with lower incomes shut out of a CWELCC space. But it wouldn’t fix the unfair, expensive CWELCC mess. For that, Ontario needs the fortitude to challenge the status quo. Until then, the province should help the families that the program is failing.

• Peter Jon Mitchell is family program director at Cardus